Third Circuit upholds Thomson Reuters win in AI training lawsuit

The U.S. Court of Appeals for the Third Circuit affirmed Thomson Reuters Enterprise Centre GmbH's victory over Ross Intelligence, Inc. in a copyright dispute that will shape how AI companies can train models on proprietary legal materials Reuters.

On September 30, 2026, the Philadelphia-based appellate court unsealed its opinion upholding the U.S. District Court for the District of Delaware's ruling that Ross's copying of Thomson Reuters's Westlaw headnotes—editorial summaries of case law—was not a lawful fair use, even though the company used them to build a competing AI-based legal research tool Stanford Law School Fair Use Index.

The Core Ruling

The Third Circuit rejected Ross's argument that the headnotes lacked copyright protection. Instead, the court found that "Thomson Reuters' materials possess a creative spark, and ROSS aspired to be a direct competitor by using them for a highly similar purpose" Reuters. This language, reported in the unsealed opinion, frames the dispute as a straightforward copyright claim: a company copying a competitor's curated creative work to build a product serving the same market.

Why This Matters for AI Training

The decision directly constrains one common strategy in AI development: training on existing copyrighted databases and collections without licensing. Ross had argued that its use of the headnotes was transformative and fell within fair use protections. The Third Circuit disagreed, holding that copying creative editorial materials for a competitive product does not transform the use enough to overcome copyright claims.

The case represents a concrete enforcement outcome in the larger debate over what training data AI companies can legally use. Unlike hypothetical rulings or regulatory guidance, this is a final appellate judgment that companies building legal AI tools—or similar products trained on proprietary databases—must now navigate Bloomberg Law.

No Criminal Sanction, but Civil Liability

This is a civil copyright case, not a criminal matter. No regulatory sanctions, criminal sentences, or specific damages amounts are reported in the appellate decision. However, the ruling itself stands as binding precedent in the Third Circuit—covering Delaware, New Jersey, and Pennsylvania—and may influence fair use analysis in other districts.

The court described the underlying dispute as "no more than an ordinary copyright case," emphasizing that the novel issue was the application of established copyright principles to AI training, not the creation of new law Bloomberg Law.