On February 11, 2025, the U.S. District Court for the District of Delaware delivered a landmark decision in Thomson Reuters Enterprise Centre GmbH v. Ross Intelligence Inc., ruling that the use of copyrighted materials to train AI models does not qualify as fair use. This ruling represents a significant development in the ongoing legal debate over AI and intellectual property rights.
Background of the Case
Thomson Reuters, the owner of the legal research platform Westlaw, provides users with legal texts, statutes, and editorial content such as headnotes that summarize key aspects of cases. Westlaw also employs a proprietary classification system called the ‘Key Number System’ to organize legal materials.
Ross Intelligence, an AI-powered legal research platform, sought to develop a competing tool and initially attempted to license Westlaw’s data for training purposes. When Reuters declined, Ross turned to a third-party company, LegalEase, which compiled ‘Bulk Memos’—legal questions and answers based on Westlaw’s headnotes. Ross then used these memos to train its AI system.
Reuters filed a lawsuit in May 2020, alleging copyright infringement, arguing that Ross used proprietary Westlaw content without authorization to build its AI-driven research tool.
Court Ruling and Rejection of Fair Use
Judge Stephanos Bibas granted Reuters’ motion for partial summary judgment, rejecting Ross’s fair use defense. The court applied the four-factor test under U.S. copyright law:
- Purpose and Character of the Use: The court found Ross’s use to be commercial and non-transformative. Ross used Reuters’ copyrighted material to create a directly competing product, and the AI training process did not add a new or distinct purpose.
- Nature of the Copyrighted Work: This factor slightly favored Ross, as the Westlaw headnotes, while creative, contain factual elements.
- Amount and Substantiality of the Work Used: The court ruled in Ross’s favor on this factor since the headnotes were only used in training and not displayed to end-users.
- Market Effect: The ruling heavily favored Reuters, as Ross’s tool directly competed with Westlaw, threatening its market share. The court emphasized that Ross could have developed its AI training data independently or through licensed sources.
Given the emphasis on the fourth factor, the court ruled against Ross, stating that fair use does not protect the unauthorized use of copyrighted content for AI training.
Implications for AI and Copyright Law
This ruling is a major victory for copyright holders, affirming their rights over proprietary content and potentially opening new licensing revenue streams. On the flip side, AI developers now face stricter limitations on sourcing training data, emphasizing the need to either use non-copyrighted works or obtain proper licensing agreements.
However, this decision is not the final word on AI copyright disputes. Judge Bibas explicitly noted that Ross’s system was not a generative AI tool but rather a legal search engine. Future cases involving generative AI may see courts take a different stance, particularly on the transformative use factor.
As AI continues to evolve, the legal landscape will likely shift. This case sets a precedent but leaves open questions about how courts will treat AI-generated content moving forward. For now, AI companies should tread carefully, ensuring their training data complies with copyright laws to avoid similar litigation battles.