Third Circuit holds ROSS's use of Westlaw headnotes to build an AI legal research tool was not fair use

On 29 September 2026, the US Court of Appeals for the Third Circuit held that ROSS Intelligence’s use of Westlaw headnotes to build an AI legal research tool was not fair use, affirming a partial summary judgment for Thomson Reuters. It is a federal appellate ruling on copyright liability for material used to build an AI system, although the court distinguished AI models that can generate original expression.

What happened

The case, Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc. (No. 25-2153), reached the court on an interlocutory appeal from the District of Delaware. The panel, in an opinion by Judge Montgomery-Reeves, addressed the two questions certified for appeal. It held that the 2,243 headnotes at issue are original and protected by copyright. On fair use, it found that ROSS’s use was commercial and “minimally transformative, at best,” that using the headnotes to train the AI was an intermediate step that “arguably presents a slight degree of difference in use” but left ROSS’s use with “the same ultimate purpose” as Thomson Reuters’s, and that ROSS “usurped Thomson Reuters’s opportunity to enter that derivative market.” Three of the four fair use factors weighed against ROSS. The court did not decide whether the West Key Number System is original, finding that ROSS had forfeited the issue.

In a footnote, the court distinguished generative AI cases, including Bartz v. Anthropic, noting that “ROSS’s AI platform cannot generate original expression.” According to LawSites, the opinion was issued under seal and released shortly after, the case now returns to the district court, and ROSS has said it will seek reconsideration by the full Third Circuit and, ultimately, Supreme Court review.

Why it matters

The ruling adds appellate authority on a question central to intellectual property exposure for AI developers and for businesses that build AI tools on third-party content: whether copying protected material to train a system is excused as fair use. Its weight on harm to a potential derivative market for the copied material is relevant to how risk teams and insurers assess that exposure. See What Is AI Insurance? and the AI Risk Timeline.

What is not yet clear

Whether the full court or the Supreme Court will review the decision, and how far courts will extend its reasoning to generative AI, which the opinion distinguished in a footnote.