Report: Thomson Reuters Wins AI Copyright ‘Fair Use’ Ruling Against One-Time Competitor

From Reuters:

A federal judge in Delaware on Tuesday said that a former competitor of Thomson Reuters was not permitted by U.S. copyright law to copy the information and technology company’s content to build a competing artificial intelligence-based legal platform.

U.S. Circuit Judge Stephanos Bibas’ decision against defunct legal-research firm Ross Intelligence marks the first U.S. ruling on the closely watched question of fair use in AI-related copyright litigation.

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Bibas reconsidered his previous decision that determining fair use should be left to a jury at a trial on Thomson Reuters’ copyright infringement claims against Ross. “I studied the case materials more closely and realized that my prior summary-judgment ruling had not gone far enough,” Bibas said on Tuesday.

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More From WIRED:

Notably, Judge Bibas ruled in Thomson Reuters’ favor on the question of fair use. The fair use doctrine is a key component of how AI companies are seeking to defend themselves against claims that they used copyrighted materials illegally. The idea underpinning fair use is that sometimes it’s legally permissible to use copyrighted works without permission—for example, to create parody works, or in noncommercial research or news production. When determining whether fair use applies, courts use a four-factor test, looking at the reason behind the work, the nature of the work (whether it’s poetry, nonfiction, private letters, et cetera), the amount of copyrighted work used, and how the use impacts the market value of the original. Thomson Reuters prevailed on two of the four factors, but Bibas described the fourth as the most important, and ruled that Ross “meant to compete with Westlaw by developing a market substitute.”

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…this ruling is a blow to AI companies, according to Cornell University professor of digital and internet law James Grimmelmann: “If this decision is followed elsewhere, it’s really bad for the generative AI companies.” Grimmelmann believes that Bibas’ judgement suggests that much of the case law that generative AI companies are citing to argue fair use is “irrelevant.”

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From The Verge:

Similar lawsuits against OpenAI, Microsoft, and other AI giants are currently winding their way through the courts, and they could come down to similar questions about whether or not the AI tools can claim a “fair use” defense of using copyrighted material.

However, as the judge noted, this case involved “non-generative” AI, not a generative AI tool like an LLM. Ross shut down in 2021, calling the lawsuit “spurious” but saying it was unable to raise enough funding to keep going while caught up in a legal battle.

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Resources

Direct to Full Text of Summary Judgment (23 pages; PDF; via CourtListener)

Direct to Complete Case Docket (via CourtListener)

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