Third Circuit upholds Thomson Reuters' win over Ross Intelligence, rejecting AI training fair use defense

What happened: On 29 September 2026, the US Court of Appeals for the Third Circuit affirmed a Delaware district court's partial summary judgment for Thomson Reuters, holding that defunct legal-research company Ross Intelligence infringed copyright by using thousands of Westlaw's editorial headnotes to train its AI-powered legal search engine. The three-judge panel (opinion by Circuit Judge Tamika Montgomery-Reeves) rejected Ross's fair use defense under Section 107: the use was highly commercial and minimally transformative because both companies used the headnotes for the same purpose -- helping researchers find judicial opinions -- and Ross's tool retrieved existing legal texts rather than generating new content. The court's full reasoning is currently sealed. Ross shut down its platform in 2021, citing the cost of this litigation.

Why it matters to creators: Reuters describes this as the first ruling by a US appeals court in the wave of copyright cases over AI training. For creators, the key signal is that direct commercial competition weighs heavily against fair use, and the court adopted a narrow reading of 'transformative use' -- feeding protected material into an intermediate database for machine learning is not automatically transformative.

What is not yet known: The sealed reasoning limits what other courts can take from the decision, and the Third Circuit explicitly distinguished Ross's retrieval tool from foundation models that generate new content, so the ruling offers limited guidance for the generative-AI cases (authors, news, music) still pending.