Using someone else’s “creative spark” to start a competing business violates copyright law, the panel found.
PHILADELPHIA (CN) — The Third Circuit rejected an artificial intelligence company’s fair use defense after it trained its AI on a competitor’s product, finding that the training constituted copyright infringement — and potentially setting a historic precedent for artificial intelligence.
Thomson Reuters sued ROSS Intelligence, a now-defunct AI startup, in 2020, claiming that ROSS took briefing notes – brief descriptions of important legal issues that appear before court opinions – from its Westlaw database, using a third party called LegalEase Solutions to access them after Westlaw denied ROSS access.
ROSS then used that data “not for legal research purposes, but to launch a competing product” by training its artificial intelligence on Westlaw’s notes, Reuters said in its complaint.
In 2025, a federal judge in Philadelphia granted partial summary judgment to Reuters and denied the same to ROSS, finding that Westlaw’s briefing notes were copyrighted and that their use by ROSS without authorization violated copyright law.
While ROSS argued that the briefing notes were too similar to their respective non-copyrighted judicial opinions to qualify for copyright protection, the lower court held that Westlaw’s selection and arrangement of the notes constituted a “creative spark” akin to a sculptor chiseling a block of rough marble.
That spark made Westlaw’s non-textual notes original works, and therefore copyrightable, the lower court ruled. Additionally, because ROSS’s use of the summaries was not sufficiently transformative and did not contribute to competition in the startup market with Westlaw, fair use did not apply.
ROSS appealed and sent the case back to a Third Circuit panel in June 2026.
After months of deliberations, U.S. Circuit Judge Tamika Montgomery-Reeves – appointed by Joe Biden – upheld the federal court’s ruling on behalf of the panel, breaking down the issue into its simplest legal concepts.
“In the context of ROSS, this case appears to be about the future of AI legal technology,” Reeves wrote for the panel on Wednesday. “But appearances can be deceiving. In reality, this is just an ordinary copyright case.”
In reviewing the originality of Westlaw’s notes, Montgomery-Reeves acknowledged that Reuters editors had demonstrated sufficient creative spark to secure legal protections.
“Each general note was required to convey sufficient factual context and reasoning to stand alone without reference to the opinion or any other general note, while still accurately reflecting the corresponding opinion passage,” Montgomery-Reeves wrote. “Because these decisions show the minimum required ‘creative spark,’ the summaries are original.”
Similarly, the panel reexamined ROSS’s fair use defense, reaching conclusions similar to those of the lower court.
Describing ROSS’s use of notes as “untransformative at best,” Montgomery-Reeves noted that the startup’s use of notes for AI training only served as different means to achieve the same goal as Reuters.
“ROSS has taken the intermediate step of using the summaries to train an AI program, which arguably presents a slight degree of usability difference,” Montgomery-Reeves wrote. “But undisputed evidence demonstrates that ROSS used the summaries to train an AI program to benefit its legal research platform.”
Additionally, the panel reasoned that ROSS’s use of the summaries would negatively impact Westlaw’s value in the market for legal research platforms, as well as its value in the potential derivative market for licenses to train AI – thereby refuting ROSS’s fair use argument.
“The undisputed evidence shows that the Thomson Reuters materials possess a creative spark and that ROSS aspired to be a direct competitor by using them for a very similar purpose,” Montgomery-Reeves wrote. “We therefore believe that the Thomson Reuters materials are protected by copyright and that the use of ROSS is not fair.”
U.S. Circuit Judge L. Felipe Restrepo, a Barack Obama appointee, and U.S. Circuit Judge Emil J. Bove III, a Donald Trump appointee, agreed with Montgomery-Reeves.
Representatives for Thomson Reuters and ROSS Intelligence could not be reached for comment.
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