AI company tells appeals court decision in legal research copyright case will have 'sweeping consequences' for innovation

PHILADELPHIA (CN) — A defunct artificial intelligence company aimed at aiding legal research told a federal appeals court Monday that the future of AI development in the U.S. depends upon whether it decides to reverse a lower court’s ruling in a copyright dispute brought by Thomson Reuters in 2020.

In a brief filed in the Third Circuit Monday, ROSS Intelligence said a lower court improperly ruled that its use of legal research platform Westlaw’s “headnotes” to train an AI legal search engine was not fair use, and that the court also improperly determined that the headnotes are copyrightable work. Westlaw is owned by Thomson Reuters.

ROSS Intelligence claims in its new brief that its use of the headnotes — short descriptions of important issues of law that appear before judicial opinions — was “quintessential fair use.”

“It radically promoted scientific progress without impacting any market for those headnotes because no such market existed,” the AI company says in its brief. “ROSS also served the public good — it increased access to justice and sparked innovation in a market that lacked competition.”

Furthermore, the company argues the headnotes shouldn’t be copyrightable, because they are “verbatim or close-to-verbatim quotes from uncopyrightable judicial opinions.”

“Concluding that headnotes are original would effectively give West a monopoly over the law, which, as courts have recognized, belongs to no one,” ROSS said in its brief.

While U.S. Circuit Court Judge Stephanos Bibas — sitting by designation in the U.S. District Court for Delaware — initially denied both Thomson Reuters’ and ROSS’ motions for summary judgment regarding the questions of copyright and fair use of the headnotes, opting to send those questions to a jury, he later revised his 2023 opinion.

Writing in February 2025, Bibas said that the headnotes are, in fact, original. They are a compilation, selected and arranged by Thomson Reuters, and each is also an individual and copyrightable work, the judge said. He compared the headnote writer’s editorial judgment to “that of a sculptor.”

“A block of raw marble, like a judicial opinion, is not copyrightable. Yet a sculptor creates a sculpture by choosing what to cut away and what to leave in place. That sculpture is copyrightable,” the judge wrote.

“Identifying which words matter and chiseling away the surrounding mass expresses the editor’s idea about what the important point of law from the opinion is. That editorial expression has enough ‘creative spark’ to be original,” he continued.

Even the headnotes that quote a judicial work verbatim have original value, according to Bibas.

Additionally, Bibas denied ROSS’ motion for summary judgment on fair use. By using Westlaw’s headnotes in a commercial and non-transformative manner that could compete with Westlaw, Bibas wrote, ROSS encroached on Thomson Reuters’ market using its own product.

In May, however, the judge decided to grant ROSS’ motion for interlocutory appeal, saying that while he was confident in his February opinion, allowing the appeals court to resolve two controlling questions of law would “change the shape of the trial — and possibly avoid a copyright trial altogether.”

Those questions are: How much “creative spark” is required to meet the legal threshold of originality, and does Ross have a fair-use defense.

“This is the first U.S. appeal to consider the intersection of copyright law and AI. The decision will have sweeping consequences for AI innovation,” ROSS Intelligence co-founder Andrew Arruda told Courthouse News in an emailed statement.

In its Monday brief, ROSS told the appellate court that its search engine uses the same fundamental technology as any other AI model and that tech requires “vast quantities” of data for training purposes.

“This is a chance for the appellate court to help secure the American lead in AI development — a lead in innovation critical to our economic success and national security," Arruda said.

A representative for Thomson Reuters could not immediately be reached for comment.

In its complaint, the company asserted that ROSS’ roundabout use of Westlaw’s headnotes — through a third party called LegalEase Solutions — occurred after it had explicitly denied ROSS access on the basis that it doesn’t give competitors access to its products.

“ROSS illicitly and surreptitiously used a then-Westlaw licensee to acquire access to and copy Plaintiff’s valuable content,” Thomson Reuters wrote in its complaint. “ROSS did so, not for the purposes of legal research, but to rush out a competing product without having to spend the resources, creative energy, and time to create it itself. The net result is that Plaintiffs are now being put in the unfair position of having to compete with a product that they unknowingly helped create.”

Follow @JacksonHeals