Third Circuit Rules Against Fair Use for AI Training on Westlaw Headnotes
The Third Circuit ruled ROSS Intelligence’s use of Westlaw headnotes for AI training was not fair use.
Why it matters: This landmark ruling clarifies legal limits on AI training with copyrighted content, affecting AI developers and content owners. It signals the need for licenses when using protected materials in AI development, especially in competitive markets.
- On Sept. 29, 2026, the Third Circuit rejected fair use for ROSS Intelligence’s AI training with Westlaw headnotes.
- ROSS copied thousands of Thomson Reuters’ headnotes to create training materials for its competing legal research AI.
- Three of four fair use factors weighed against ROSS: commercial use, excessive copying, and harmful market effect.
- The decision is the first federal appellate ruling addressing AI training data’s fair use and binds the Third Circuit jurisdiction (DE, NJ, PA, Virgin Islands).
On September 29, 2026, the U.S. Court of Appeals for the Third Circuit issued a groundbreaking decision in Thomson Reuters v. ROSS Intelligence, ruling that ROSS’s use of Westlaw headnotes to train its AI legal research platform did not qualify as fair use. The court found that ROSS had copied thousands of copyrighted headnotes without sufficient transformation or permission.
The court focused on key fair use factors, determining that ROSS’s use was commercial and minimally transformative, the amount of copied material was excessive, and the use harmed Westlaw’s existing and emerging markets. These findings led to rejecting fair use protections for ROSS.
Judge Tamika Montgomery-Reeves summarized the court’s stance: "Under ROSS’s framing, this case appears to concern the future of AI legal technology. In truth, this is no more than an ordinary copyright case." This signals that traditional copyright principles still govern AI training data use.
This ruling is the first federal appellate court decision to directly address copyright fair use in the context of AI training, providing important legal clarity. It binds the Third Circuit jurisdiction, which encompasses Delaware, New Jersey, Pennsylvania, and the Virgin Islands.
For AI developers, the ruling underscores the risks of using copyrighted materials without licenses, especially when developing products competitive to the original content providers. Content owners receive a clear judicial endorsement to protect their intellectual property rights against unlicensed AI training.
However, the court did not resolve broader questions related to training generative AI systems, leaving some uncertainty for future cases in other jurisdictions.
By the numbers:
- September 29, 2026 — Date of the Third Circuit ruling
- Thousands — Number of Westlaw headnotes copied by ROSS Intelligence
- 4 — Number of fair use factors considered; 3 weighed against ROSS
Yes, but: While this ruling clarifies AI training limits in the Third Circuit, it leaves open questions about generative AI fair use and other jurisdictions' approaches.
What's next: Expect heightened scrutiny of AI training data practices and possible similar lawsuits in other circuits, potentially prompting legislative updates.