Third Circuit Affirmed Ruling in AI Copyright Case
The appeals court upheld a judgment against Ross Intelligence for using copyrighted content to train an AI legal tool.
Updated on Oct. 13, 2026 in Artificial Intelligence
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The Third Circuit Court of Appeals has affirmed a summary judgment ruling against Ross Intelligence for copyright infringement. The court determined that the company improperly used protectable Westlaw headnotes to build its AI-driven legal research database.
Why it matters
This appellate decision clarifies that AI developers cannot bypass copyright protections by claiming fair use when they use copyrighted material to build direct market competitors. It establishes a significant legal precedent for how intellectual property is handled in the training of artificial intelligence systems.
Ross Intelligence built its database using 25,000 bulk memos to train a legal research tool. The court examined four factors of fair use and concluded that the fourth factor, concerning market effect, clearly favored Thomson Reuters.
The players
Third Circuit Court of Appeals
This federal court hears appeals from district courts within its jurisdiction, which includes Pennsylvania, New Jersey, Delaware, and the Virgin Islands.
Thomson Reuters
A multinational media and information conglomerate that owns Westlaw, a widely used subscription-based legal research service.
Ross Intelligence
A startup company that developed an artificial intelligence platform designed to provide automated legal research capabilities to attorneys.
The details
The court rejected defenses including innocent infringement and merger, finding that Ross Intelligence's appropriation of Westlaw content for a competing product was not fair use. Thomson Reuters had previously denied a licensing request for its database due to the direct competitive nature of the two firms.
Timeline
The lower court issued its original summary judgment opinion in 2023.
A revised underlying opinion was released in February 2025.
The Third Circuit Court of Appeals issued its appellate ruling in October 2026.
The Tech Race
This ruling establishes a critical application of the fair use doctrine to the emerging era of large-scale artificial intelligence training. It signals a move away from the assumption that AI development inherently qualifies as transformative work under established copyright frameworks.
This ruling may limit the types of proprietary datasets that AI startups can access without costly licensing agreements. For legal professionals, this preserves the value of curated research platforms and may affect the future pricing and availability of competing AI-driven search tools.
The takeaway
This case demonstrates that the legal protections for original research and database compilations remain robust even against modern AI development. Companies building new tools should prioritize licensing agreements rather than relying on the broad fair use defense for copyrighted training data.
Further reading
For more background on the intersection of law and machine learning, visit the Artificial Intelligence section.
Source note: This article includes information reported by Maryland Daily Record.
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