Thomson Reuters wins Third Circuit appeal as court rules ROSS AI training was not fair use

What the Third Circuit decided

In an opinion filed on 29 September 2026, the Third Circuit affirmed the District of Delaware's partial summary judgment in Thomson Reuters v. ROSS Intelligence. Judge Montgomery-Reeves wrote for a panel with Judges Restrepo and Bove. The appeal came up on two certified questions: whether Westlaw headnotes are original, and whether ROSS's use of them was fair. The court answered yes to the first and no to the second.

The opinion says ROSS hired LegalEase Solutions to write about 25,000 training memos, built from Westlaw headnotes, to teach its search engine which court passages answer a legal question. The trial court found that 2,243 headnotes were copied. ROSS ran ads comparing itself directly with Westlaw at similar prices, and some law firms switched.

How the court weighed fair use

On the first factor, the court found that ROSS used the headnotes for the same ultimate purpose as Thomson Reuters, a legal research platform, making the use minimally transformative at best and highly commercial. The second factor, the nature of the work, weighed slightly for ROSS. The third weighed against it because ROSS copied the headnotes in full without a transformative purpose.

On the fourth factor, the court found that a market for licensing headnotes as AI training data is rapidly developing, that Thomson Reuters already uses headnotes to train its own AI search products, and that ROSS usurped its chance to license them. The court rejected ROSS's arguments that the ruling would halt AI development or harm national security, noting that ROSS gave no evidence for either.

Why it matters for AI copyright cases

This is a federal appeals court ruling against fair use for AI training data, so lawyers in other cases will cite it. But the court drew a clear line. It said ROSS's AI was not generative and only returned existing passages. In a footnote it distinguished the Justice Department's statement of interest in the OpenAI litigation, which argues that training large language models that generate original responses is transformative. Developers of generative models will argue that the ruling does not reach them. Rightholders will point to the court's recognition of a market for licensing training data.

What to watch next

This was an interlocutory appeal, so the remaining claims stay before the District Court. Whether ROSS will seek further review is not stated in the opinion. The court did not decide whether the Westlaw Key Number System is original, because ROSS forfeited that issue. Rulings on generative AI training in other courts are tracked under AI Policy & Regulation.

Questions people ask

Did the Third Circuit rule that AI training is never fair use?

No. It ruled on ROSS's specific use of 2,243 Westlaw headnotes to build a competing, non-generative legal search tool, and it distinguished generative large language models.

Why was ROSS's use not transformative?

The court found that ROSS used the headnotes for the same ultimate purpose as Thomson Reuters, building a legal research platform, so the use was minimally transformative at best.

What did the court say about a market for AI training data?

It found that the market for licensing headnotes as AI training data is rapidly developing and that ROSS's unlicensed copying usurped Thomson Reuters's chance to enter it.

Sources

1. Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc., No. 25-2153, Opinion of the Court (US Court of Appeals for the Third Circuit, 29 Sep 2026)