Thomson Reuters Wins AI Copyright 'Fair Use' Ruling Against One-Time Competitor

In a significant victory for AI development and intellectual property rights, Thomson Reuters has won a partial summary judgment in its long-running copyright infringement lawsuit against ROSS Intelligence. The ruling, issued by 3rd U.S. Circuit Court of Appeals Judge Stephanos Bibas, sitting by designation in the U.S. District Court in Delaware, found that ROSS infringed on Westlaw's copyrighted headnotes when it used them to train its AI-powered legal research platform.

The court specifically rejected ROSS's fair use defense, stating that ROSS was using Thomson Reuters' headnotes as AI data to create a legal research tool to compete with Westlaw. The ruling focused heavily on the fair use analysis, examining the four statutory factors. While two of the factors favored ROSS, the two most important factors – the purpose and character of the use and the effect on the potential market for the original work – favored Thomson Reuters.

The ruling has significant implications for the broader AI industry, particularly legal AI companies, in terms of copyright protection and fair use. The court's decision sets a precedent for how courts may interpret the fair use doctrine in the context of AI-powered tools that use copyrighted materials for training and development. AI companies must now be more cautious when using copyrighted materials, especially if the AI product competes directly with the copyright holder's business.

AI companies should conduct a thorough fair use analysis before using copyrighted materials, considering the four statutory factors and weighing the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work. If an AI company determines that its use of copyrighted material is not fair, it should seek a license from the copyright holder or create original content to minimize the risk of copyright infringement.

In conclusion, the Thomson Reuters v. ROSS Intelligence ruling serves as a reminder for AI companies to respect copyright laws and ensure compliance when using copyrighted materials in their AI models. By conducting thorough fair use analyses, seeking licenses when necessary, creating original content, and staying informed about legal developments, AI companies can help ensure compliance with copyright laws and minimize the risk of infringement claims.