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Federal appeals court rules ROSS's AI training on Westlaw headnotes was not fair use

The Third Circuit upheld a ruling that ROSS Intelligence infringed Thomson Reuters' copyrights by training a legal research tool on Westlaw headnotes, the first US appellate fair-use ruling on AI training, though the court said it was not deciding questions about generative AI.

Evidence: 5 sources · 2 official records · 3 independent reports · 3 open questions

By Happened in AI Editors

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What happened

  • On 29 September, the US Court of Appeals for the Third Circuit affirmed a ruling for Thomson Reuters in Thomson Reuters v. ROSS Intelligence (No. 25-2153).
  • The panel held that Westlaw's headnotes are protected by copyright and that ROSS's use of them to train an AI legal research tool was not fair use.
  • The court found the use commercial and only minimally transformative, and said it harmed Westlaw's market and a developing market for licensing content as AI training data.
  • The opinion was first issued under seal, and the case returns to the district court in Delaware for remaining issues, including damages.

Why it matters

It is the first federal appeals court decision on whether training an AI system on copyrighted material is fair use, and the court's recognition of a market for AI training licenses is likely to be cited in the many pending cases against AI developers.

What is confirmed and what is claimed

Confirmed

  • The Third Circuit affirmed the district court's rulings that the headnotes are copyrightable and that ROSS's use was not fair use (Association of American Publishers statement; analyses by Ballard Spahr, Authors Alliance, and IPWatchdog). 1234
  • The appeal came from a February 2025 ruling by Judge Stephanos Bibas, a Third Circuit judge sitting by designation as the trial judge in the District of Delaware.
  • The court distinguished ROSS's tool, which returned passages from existing judicial opinions, from systems that generate new expression, and did not decide the generative AI question (Ballard Spahr; King & Spalding). 3

Claimed, not independently verified

  • Publishers' groups, including the Association of American Publishers, describe the ruling as an important precedent for licensing; critics such as Authors Alliance argue the court got key copyright doctrines wrong. 14

Thomson Reuters sued ROSS Intelligence in 2020, saying the startup had used Westlaw's headnotes, the short summaries of legal points that editors attach to court opinions, to build a competing AI legal search tool. ROSS argued that its use was fair use. The trial court disagreed in February 2025 and allowed an early appeal on the central questions. The Third Circuit has now agreed with the trial court on both.

Context

US fair use is decided case by case using four factors, including the purpose of the use and its effect on the market for the original work. The panel found ROSS's use commercial and only slightly transformative, and it counted harm not only to Westlaw itself but to a market for licensing material as AI training data. That second point matters well beyond this case: AI developers in other suits argue that no such market should be considered.

The court was also careful about its limits. ROSS's system returned existing passages from judicial opinions rather than generating new text, and the opinion says it was not deciding how fair use applies to generative AI. District courts in California reached different conclusions about book training in 2025 cases against Anthropic and Meta, and those courts are not bound by the Third Circuit. Our AI and copyright explainer sets out the separate legal questions.

What to watch

Whether ROSS seeks further review; the release of a fuller public version of the opinion; and how lawyers for news publishers, authors, and music companies cite the licensing-market reasoning in pending cases.

What we don’t know yet

  • How much other courts hearing cases against generative AI developers will rely on the decision.
  • Whether ROSS will seek rehearing or ask the Supreme Court to review the case.
  • The outcome of the remaining district court issues, including whether some copyrights have expired and how much ROSS owes.

Evidence and sources

  1. Primary announcement Association of American Publishers Welcomes the Third Circuit Decision in Favor of Plaintiff in Thomson Reuters v. ROSS Intelligence Association of American Publishers ·
  2. Independent reporting Third Circuit Affirms Revised Fair Use Ruling Against ROSS' AI Legal Research Platform in Sealed Opinion IPWatchdog ·
  3. Independent reporting Third Circuit Addresses Fair Use in AI Training, But Leaves Generative AI Questions Unresolved Ballard Spahr
  4. Independent reporting Third Circuit affirms in Thomson Reuters v. ROSS: The Court Gets Merger Wrong and Does a Disservice to Fair Use Authors Alliance ·
  5. Document or data Thomson Reuters Enterprise Centre GmbH v. Ross Intelligence Inc. Stanford Copyright and Fair Use Center