US appeals court upholds Thomson Reuters' win in AI training lawsuit

A US appeals court on Tuesday upheld a ruling for information services company Thomson Reuters in its copyright dispute with former legal-research rival Ross Intelligence over Ross' alleged misuse of copyrighted material to train an AI-powered legal search engine. The Philadelphia-based 3rd US Circuit Court of Appeals rejected Ross' argument that its search engine made fair use of material from Thomson Reuters' Westlaw platform. This ruling is the first of its kind by a US appeals court in a wave of high-stakes copyright cases over AI training. The appeals court's reasoning for its decision is currently sealed. Thomson Reuters is the parent company of Reuters News. Thomson Reuters' 2020 lawsuit accused legal research company Ross Intelligence of copying Westlaw's 'headnotes,' which summarize points of law in court opinions, and misusing thousands of them to train its competing AI-based legal search engine. Ross shut down its platform in 2021, citing the costs of Thomson Reuters' litigation. Authors, news outlets, music labels and others have filed dozens of lawsuits against tech companies over the unauthorized use of copyrighted works to train AI systems. Ross allegedly used Thomson Reuters' headnotes to train its search engine to identify relevant court opinions in response to user queries. The company argued that its AI training made fair use of the headnotes, raising a pivotal defense for legal disputes over AI training. Tech companies have argued that generative AI systems make fair use of the copyrighted material they are trained on by transforming it into something new, while copyright owners say the companies use their work to generate competing content that threatens their livelihoods. A federal judge in Delaware federal court rejected Ross' fair use defense last year, prompting Ross' appeal. The judge stated, 'Ross took the headnotes to make it easier to develop a competing legal research tool. So Ross’s use is not transformative.'