A federal court ruling last week delivered a significant setback to AI companies using copyrighted material for training, as US District Judge Stephanos Bibas sided with Thomson Reuters in its lawsuit against Ross Intelligence. The ruling marks the first major decision on AI-related copyright disputes, setting a precedent that could impact multiple ongoing cases.
Thomson Reuters sued Ross Intelligence in 2020, alleging that the AI startup improperly reproduced material from its legal research platform, Westlaw, to train its models. Ross, which sought to compete with Westlaw, shut down in 2021 due to litigation costs.
In his decision, Judge Bibas dismissed all of Ross’s defenses, ruling that the company had violated copyright law. “None of Ross’s possible defenses holds water. I reject them all,” Bibas wrote.
The key legal issue in the case centered on fair use, which allows limited use of copyrighted content without permission under specific circumstances, such as research or news reporting. Courts consider four factors when determining fair use:
- Purpose of the use
- Nature of the original work
- Amount of material used
- Impact on the market value of the copyrighted work
Judge Bibas ruled that Ross failed on the fourth factor, stating that the company intended to compete with Westlaw by developing a market substitute.
Legal experts say the ruling could have far-reaching consequences for AI companies that rely on copyrighted data for training. James Grimmelmann, a professor of digital and internet law at Cornell University, described the decision as a major setback for the AI industry.
“If this decision is followed elsewhere, it’s really bad for the generative AI companies,” Grimmelmann told Wired, noting that the ruling could undermine existing fair use precedents that AI firms have relied upon.
The decision is part of a broader legal debate, with dozens of similar lawsuits currently active in the U.S., Canada, the UK, and China. As courts continue to address AI and copyright law, this ruling could shape future cases and regulatory policies surrounding artificial intelligence.
