Thomson Reuters Scores Appeals Court Win In Closely-Watched ‘Fair Use’ Copyright Case — Defendant’s Copying Was ‘Highly Commercial and Minimally Transformative’

Thomson Reuters’ Bengaluru office. Photo Credit: Rameshng

After more than half a decade of litigation, Thomson Reuters has scored an appeals court win in its “fair use” copyright infringement dispute with a now-defunct company called Ross Intelligence.

The U.S. Court of Appeals for the Third Circuit made that victory official in a judgment yesterday; unsurprisingly, Reuters was quick to cover the development – but not the opinion itself, which only became publicly available this afternoon.

Turning the clock back to 2020 for a moment, the initial complaint centered on the plaintiff’s Westlaw legal research database.

According to the suit, Ross allegedly pulled from that database (via a third-party service provider) to create a law-focused AI search engine. As such, the latter incorporated protected elements (referring to headnotes, or legal opinion summaries) that Thomson Reuters had opted against licensing – a reality that evidently didn’t sit right with the conglomerate.

Fast forward to February 2025, when, we previously broke down in detail, Judge Stephanos Bibas granted the filing party’s summary judgment motion. In brief, he found the legal text to be copyrightable, deemed Ross’s use non-transformative, and therefore sided with Thomson Reuters on the aforementioned fair use front.

That ruling set the stage for Ross’s newly resolved appeal. And because music industry companies, organizations, and professionals are embroiled in a number of AI infringement clashes revolving around the same all-important fair use question, it didn’t come as a surprise when the RIAA and the NMPA urged the appellate court to uphold the decision.

Spanning over 30 pages, the organizations’ amicus brief zeroed in on a couple key arguments, both decidedly significant from the precedent perspective: Copying protected materials cannot be transformative if one does so “to achieve the same purpose as those materials,” and doing so “to generate market substitutes can never be fair use.”

Of course, the positions are relevant in ongoing disputes with Suno, Udio, and other gen AI platforms – even if the Thomson Reuters v. Ross showdown technically involved non-gen-AI uses.

(In handing down the summary judgment determination, Judge Bibas stressed the non-generative nature of Ross’s product and underscored evidence demonstrating “actual copying” of most of the Westlaw headnotes in question.)

Fast forward once more, this time to June 2026, when the litigants made their arguments before a three-judge appeals panel. As noted, these judges recently upheld the district court ruling, handing Thomson Reuters another win and, as Ross reportedly ceased operating in 2021, presumably ending the legal battle.

Nevertheless, the case’s conclusion seems unlikely to resolve mounting fair use questions in the AI arena.

In keeping with the above-noted non-generative nature of the alleged infringement, the appellate court emphasized that as framed by Ross, “this case appears to concern the future of AI legal technology.

“But appearances can be deceiving. In truth, this is no more than an ordinary copyright case; we must determine whether Thomson Reuters’s materials are sufficiently original for copyright protection and whether ROSS’s use of those materials was fair,” Circuit Judge Tamika Montgomery-Reeves proceeded.

Consequently, beyond its in-depth analysis of said materials’ protectability, the decision doesn’t quite provide a definitive fair use answer regarding machine outputs that pull from massive datasets.

However, as both litigants “use the headnotes to create and optimize a legal-research platform that helps users find responsive legal material,” Ross shared “the same ultimate purpose as Thomson Reuters’s use, making ROSS’s use minimally transformative, at best,” per the legal text.

More interestingly, with gen AI partnerships continuing to materialize in the music world – and with some of these companies still staring down copyright suits – the court further touched on the idea that Ross’s conduct could have disrupted Thomson Reuters’ licensing opportunities.

“By copying the headnotes for use as training data without Thomson Reuters’s authorization, ROSS usurped Thomson Reuters’s opportunity to enter that derivative market and license its headnotes for that purpose,” the appeals court wrote. “The market harm caused by ROSS’s use weighs against fair use.”

What about the same conduct’s alleged impact on the value of Thomson Reuters’ headnotes?

Well, in “copying the headnotes and using them to build its own competing legal-research platform, ROSS appropriated the headnotes’ value for finding and analyzing judicial opinions and diminished their value as a draw for users to Thomson Reuters’s legal-research platform,” per the text.

Could this idea also apply to gen AI music platforms’ allegedly unauthorized training? Moreover, are those platforms actually looking to replace existing services? On the other hand, might one argue that certain AI-powered music generators are doing the opposite of diminishing IP’s value by providing presumably huge licensing payments to rightsholders?

Stated differently, the fresh opinion seemingly raises at least as many questions as it answers, and time will tell how the findings factor into ongoing artificial intelligence copyright confrontations.