Thomson Reuters has won the appellate stage of a lawsuit that has dragged on for six years. The U.S. Court of Appeals for the Third Circuit ruled in an opinion unsealed on September 30, 2026, that defunct ROSS Intelligence's use of Westlaw legal headnotes was not fair use. As reported by Reuters, this is the first ruling by a U.S. appeals court on fair use in the context of artificial intelligence (AI) training. The decision concludes the appellate stage of a case that began in 2020.

The Substance of the Ruling

The opinion was adopted unanimously by a three-judge panel; it was written by Judge Tamika Montgomery-Reeves. Reviewing ROSS's use of the headnotes, the court deemed it "non-transformative": the company used protected materials to build a similar product competing directly with Westlaw.

Ross's use of the headnotes to create a similar competing product is not transformative. — From the U.S. Court of Appeals for the Third Circuit opinion (Reuters)

Transformative use is one of the central criteria in fair use analysis: if a use gives a work new meaning, message, or purpose, it is considered transformative. The court found that ROSS failed this test — the company used the headnotes to build its own competing search system, operating in the same market as the original material.

The court also rejected ROSS's second defense: the company had argued that headnotes are not protected by copyright at all. The court did not accept this claim — the disputed headnotes were recognized as protected works. As a result, both of ROSS's legal pillars — the fair use defense and the non-protectability claim — were denied by the court.

As noted in the opinion, ROSS's position was considered in two directions: first, the company defended its use as fair use; second, it claimed that the headnotes themselves were not subject to copyright. The panel rejected both claims. The unanimous decision shows the appeal concluded without disagreement — all three judges joined the opinion's text, written by Judge Tamika Montgomery-Reeves.

As emphasized in the opinion, market relations were at the heart of the dispute: ROSS created a product competing with Westlaw in the same market — the market for legal research services. This circumstance was the basis for evaluating the use as non-transformative.

How the Opinion Was Unsealed

The appeals court decision was initially issued under seal and unsealed on September 30, 2026. Reuters analyzed the details of the decision based on the released opinion text — which is why the court's reasoning became public at the end of September. The unsealed opinion details each of the court's key findings — the lack of transformative use, the protectability of the headnotes, and the distinction from generative AI disputes.

The unsealing date — September 30, 2026 — is recorded as the date the decision became public. Reuters and Bloomberg Law then covered the case: both publications confirmed the court's main findings — the rejection of transformative use, the protectability of the headnotes, and the separation of the case from generative AI disputes.

Bloomberg Law covered the ruling independently, quoting the court's assessment of the case: the Third Circuit called the dispute "nothing more than an ordinary copyright case." As the publication noted, the court issued this ruling not as a judgment on the future of AI technologies, but as a resolution of a specific copyright dispute.

This case is not a ruling on the future of AI technologies — it is an ordinary copyright case, nothing more. — Bloomberg Law

This position precisely defines the ruling's scope: the court did not establish a broad technological principle but gave a legal assessment of a specific set of facts. The opinion therefore primarily concerns the ROSS case itself.

Distinguishing Generative AI Disputes

In the opinion, the court deliberately separated this case from ongoing copyright disputes around generative AI systems. In one note, the court recorded that concerns raised by the U.S. Department of Justice (DOJ) in the copyright case against OpenAI "do not apply here." In other words, the court viewed the ROSS case as a standalone matter, distinct from the broader ongoing debates over training generative models.

According to Reuters, this very distinction is one of the factors that made the ruling significant: an appeals court considered the fair use question in the context of AI training for the first time — but resolved it within deliberately narrow bounds, apart from the major open questions on generative AI.

The practical meaning of this distinction is that the court did not place the ROSS case alongside instances of training large language models on vast open texts. The note in the opinion was written precisely for this purpose: the DOJ's concerns in the OpenAI case do not relate to the facts of this case. Thus, the appeals court on the one hand recorded the first position on fair use in AI training, and on the other deliberately kept it within narrow bounds.

Case History

Thomson Reuters sued ROSS Intelligence in 2020. According to the complaint, ROSS copied thousands of Westlaw headnotes and used them to train a competing AI-based legal search system. Westlaw is a legal research platform owned by Thomson Reuters; headnotes are short annotations summarizing the key legal points of court decisions.

Unable to bear litigation costs, ROSS shut down its platform in 2021. Nevertheless, the case did not stop: the District of Delaware ruled in favor of Thomson Reuters, and the Third Circuit Court of Appeals upheld that ruling in 2026. The legal battle thus continued after the company's closure and reached its conclusion at the appellate stage.

The chronology looks like this: when the lawsuit was filed in 2020, ROSS was still an active company. A year later — in 2021 — the company was forced to shut down its platform under the pressure of litigation costs. Even so, the case was not closed: the District of Delaware heard the claim and ruled in favor of Thomson Reuters. In 2026, the Third Circuit reviewed the ruling and left it standing. With the appellate opinion's unsealing on September 30, the main stages of the case were concluded.

The Parties and the Subject of the Dispute

Thomson Reuters is an international information company that operates the Westlaw legal research service. ROSS Intelligence was a company active in legal research that, as Reuters defines it, has now ceased operations.

The subject of the dispute is thousands of headnotes. These annotations concisely summarize key legal rules extracted from court decisions and help lawyers quickly find the decisions they need. According to the lawsuit, ROSS copied these very annotations and used them to train its own AI-based search system — creating a product competing with Westlaw itself. The court found this very circumstance — using protected material for a competing product — to be outside the scope of fair use.

The complaint states that ROSS copied the headnotes directly — that is, the dispute was not about independently created similar texts but about copies of Westlaw annotations themselves. The court heard the case on the same basis: protected material was taken, used to build a competing product, and this use was not found to be transformative.

On the Fair Use Doctrine

Fair use is a doctrine of U.S. copyright law that in some cases permits the use of protected works without the author's permission. In the assessment, the purpose and character of the use — particularly its transformative nature — play a central role. In the ROSS case, the court relied precisely on this criterion: ROSS used the headnotes not to create new meaning or purpose, but to build a system competing with the existing product in the same market. The use was therefore not found to be transformative. This is the first application of this doctrine at the appellate level in the context of training AI systems.

Limits of the Ruling

The ruling affirmed the District of Delaware's conclusion at the appellate stage — that is, the lower court's decision in favor of Thomson Reuters was left standing. The court itself presented the opinion not as a general judgment on the future of AI, but as a decision on a specific case.

Also, because the court separated the ROSS case from ongoing generative AI disputes, this opinion does not directly answer the major open questions. The court itself noted this limit in its remarks — the DOJ's concerns in the OpenAI case "do not apply here."

Another limit of the ruling is its subject: the dispute was not about generative AI models, but about a set of annotations collected for a specific legal search system. The court's "ordinary copyright case" assessment and its note separating it from generative AI disputes both reinforce this limit. The opinion should therefore be read not as a broad technological principle, but as an appellate ruling on a single specific dispute.