17 U.S.C. § 107 Archives

Headnote to self: Third Circuit rejects fair use defense for AI training

The US Court of Appeals for the Third Circuit affirmed a grant of partial summary judgment in favor of Thomson Reuters, finding that Westlaw’s editorial headnotes were copyrightable and that use of those headnotes to train an artificial intelligence (AI) legal-research platform did not constitute fair use. Characterizing the dispute as “no more than an ordinary copyright case,” the Court emphasized that its decision did not resolve broader questions concerning generative AI training. Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc., Case No. 25-2153 (3d Cir. Sept. 29, 2026) (Restrepo, Montgomery-Reeves, Bove, JJ.)

Thomson Reuters operates Westlaw, a legal-research platform that provides judicial opinions accompanied by editor-written headnotes summarizing key points of law. Although judicial opinions are not copyrightable, Thomson Reuters claimed copyright protection in the headnotes, which its editors prepare under detailed guidelines requiring them to identify and summarize significant legal principles in concise standalone statements.

ROSS developed a non-generative-AI legal-research platform designed to respond to users’ legal questions by identifying relevant passages from about 10 million judicial opinions. To train its platform, ROSS retained LegalEase Solutions to prepare about 25,000 memoranda, each containing a legal question and four to six responsive judicial opinions. LegalEase used thousands of Westlaw headnotes to formulate the questions. ROSS intended to compete directly with Westlaw and marketed its platform at comparable prices.

Thomson Reuters sued ROSS for copyright infringement. The district court granted partial summary judgment, finding that 2,243 headnotes identified by Thomson Reuters’ expert were sufficiently original to warrant copyright protection and that ROSS’s use of those headnotes was not fair use. The district court certified the originality and fair use issues for interlocutory appeal.

The Third Circuit first addressed copyrightability. Applying the “extremely low” originality threshold established in the Supreme Court’s 1991 Feist Publications, Inc. v. Rural Telephone Service Co. decision, the Third Circuit concluded that the headnotes contained sufficient creativity because editors exercised judgment in selecting which legal principles to summarize and how to express them. The Third Circuit rejected ROSS’s argument that copyright protection would effectively grant Thomson Reuters a monopoly over the law, explaining that judicial opinions remained freely available. The Court also rejected ROSS’s merger doctrine argument, finding that the underlying legal principles could be expressed in many ways.

Turning to fair use, the Third Circuit considered the four statutory factors under 17 U.S.C. § 107:

As to the purpose and character of the use, the Court found ROSS’s use commercial and, at most, minimally transformative because both platforms served the same purpose, which was helping users locate relevant legal materials. Although ROSS used the headnotes to train its AI platform rather than displaying them, it could have relied on freely available judicial opinions instead. This factor weighed against fair use.
The nature of the copyrighted work weighed slightly in ROSS’s favor because the headnotes primarily conveyed factual information and legal principles. The Court noted, however, that this factor generally carries limited weight.
The amount and substantiality of the portion used weighed against fair use [...]

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Publisher’s Fair Use Defense Dries Up

The US Court of Appeals for the Ninth Circuit overturned a district court’s summary judgment, rejecting an accused publisher’s argument that their use of copyrighted photos embedded in articles was fair use under the Copyright Act. McGucken v. Pub Ocean Ltd., Case No. 21-55854 (9th Cir. Aug. 3, 2022) (Ikuta, Nguyen, Owens, JJ.)

Elliot McGucken captured and edited photographs of an ephemeral lake that formed on the desert floor in Death Valley. He posted his photos to Instagram and licensed them to several websites that ran articles about the lake. Pub Ocean posted an article about the lake with some digression on loosely related topics. It used 12 of McGucken’s photos, among others, without seeking or receiving a license. McGucken filed suit for copyright infringement. The district court sua sponte granted summary judgment for Pub Ocean, concluding that it was entitled to a fair use defense. McGucken appealed.

The Ninth Circuit reversed after applying the four-factor test in determining whether fair use applies:

The purpose and character of the use
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for or value of the copyrighted work.

Factor 1: The Purpose and Character of the Use

The Ninth Circuit explained that the question under the first factor is whether the infringing work is transformative and whether it is commercial. Higher transformation in new works means the other factors, including commercialism, are less significant. For-profit news articles are generally considered commercial uses. The Court explained that a work conveying factual information does not transform a copyrighted work when it uses a “clear, visual recording” of the infringing work’s subject.

The Ninth Circuit found that Pub Ocean’s article used the photos for the exact purpose for which they were taken—to depict the lake. The Court disagreed that the article was transformative when Pub Ocean merely “recontextualiz[ed] or repackage[ed] [ ] one work into another.” The Court also disagreed with Pub Ocean’s argument that the fair use defense was strengthened by its purpose of news reporting (one example of fair use listed in 17 U.S.C. § 107). The Court explained that the category of news reporting alone is not sufficient to sustain a per se finding of fair use. The Court also noted that Pub Ocean’s minor cropping and arrangement of photos in the article’s text, even if considered marginal transformation, was too weak to favor fair use.

Factor 2: The Nature of the Copyrighted Work

Under the second factor, the question is the extent to which the copyrighted work is creative and whether it is unpublished. The Ninth Circuit found that McGucken’s photos were creative because they were the product of many technical and artistic decisions. The Court also explained that the publication of the photos on Instagram and in articles failed to weigh in favor of fair use. Citing Dr. Seuss, the Court explained that “while [...]

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Headnote to self: Third Circuit rejects fair use defense for AI training

Publisher’s Fair Use Defense Dries Up

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