ASTM v. UpCodes<\/a><\/em>, arguing that under that precedent, the court should summarily reverse based on fair use. He said ROSS had built a legal search platform in 2015 by adapting headnotes into questions and using them to create training materials for a system that could connect natural-language legal questions to judicial opinions.<\/p>\nBut Judge Restrepo immediately redirected the argument to the fourth fair-use factor, asking Davies to address the effect of the use on the market. Davies responded that the copyrighted work at issue was the headnote itself and that there was no market for a single headnote or for headnotes as AI training material.<\/p>\n
Judge Bove pressed him on whether there was, or could be, a market for AI training. Davies argued that ROSS\u2019s use was too specific to define a market around it. ROSS did not merely take headnotes as raw data, he said, but built training memos that included questions and multiple answers, some right and some wrong, to train the model.<\/p>\n
To let Thomson Reuters claim a lost market for that use, he argued, would be circular because any copyright owner could say it would have licensed the very use later claimed to be fair.<\/p>\n
The judges repeatedly questioned Davies on how, from the user\u2019s perspective, ROSS\u2019s product differed from Westlaw. Judge Bove asked why ROSS\u2019s system was transformative \u201cas opposed to just a different type of legal search engine.\u201d<\/p>\n
When Davies focused on the internal technology, Judge Restrepo noted that ROSS was nevertheless a direct competitor to Westlaw, and Judge Montgomery-Reeves asked whether the product was aimed at serving as a commercial substitute.<\/p>\n
Davies acknowledged that ROSS competed with Westlaw, but said copyright law was not designed to protect incumbents from competition. He described ROSS\u2019s product as one in which a user asked a natural-language legal question and received a stream of answers in the form of quotations from judicial opinions. Because the output came from court opinions rather than generated text, he said, there was \u201cno risk of hallucinations.\u201d<\/p>\n
Judge Bove continued to press for a factual description of the product, at one point telling Davies there was \u201ca lot of dancing going on\u201d and that he was trying to understand what ROSS planned to do and why it was materially different from Westlaw.<\/p>\n
\u201cCould you please describe to me what Ross\u2019s proposed engine would have looked like, and the differences, and why it was so transformative from what happens when I log into Westlaw in the morning?\u201d Judge Bove asked.<\/p>\n
Davies responded that, from a user perspective, both products helped users find cases, but that ROSS operated differently internally because it used deep-learning techniques to teach the system the semantic relationships of legal language.<\/p>\n
\u201cThe question has legal language in it, and what we have taught this machine now is how to think like a lawyer,\u201d Davies said.<\/p>\n
The panel also questioned Davies on the copyrightability of the headnotes themselves. Judge Montgomery-Reeves asked why headnotes that condensed and reformulated judicial language were not sufficiently original to qualify for copyright protection.<\/p>\n
Davies argued that judicial opinions belong to the public and that the differences between the opinions and the headnotes were too slight to support protection. The judges, however, probed whether the selection and condensation of opinion language reflected editorial judgment.<\/p>\n
Judge Bove focused on one example in which West\u2019s editor had excerpted and condensed language from an opinion. Even if the headnote closely tracked the opinion, he suggested, the editor still made judgments about what was salient and what to include. Davies maintained that West\u2019s editorial instructions were designed to remove creativity and track the language of the opinion as closely as possible.<\/p>\n
Davies argued that ROSS should prevail on the second and third fair-use factors because the headnotes were factual and because ROSS copied only a small fraction of Westlaw\u2019s total headnotes. He said ROSS used only 0.08% of Westlaw\u2019s 28 million headnotes.<\/p>\n
\u201cWe took so little,\u201d He said. \u201cWe just took 0.08% is all we copied of 28 million headnotes.\u201d<\/p>\n
When Judge Montgomery-Reeves asked what result should follow if Thomson Reuters were ahead on factors one and four, while ROSS prevailed on factors two and three, Davies said ROSS should still win. Judge Restrepo pressed him: \u201cIf you take 2 and 3 and they take 1 and 4, you win?\u201d Davies answered that fair use is a multi-factor test.<\/p>\n
Judge Bove also asked Davies about Thomson Reuters\u2019 allegations of bad faith, including communications involving Dentons and efforts by ROSS to obtain Westlaw material. (The transcript does not elaborate on how Dentons was implicated and I could find no reference to that in the parties\u2019 redacted briefs.)<\/p>\n
Davies said ROSS had paid for the original database and for the memos and that any license issues should be addressed in separate contract claims, not the fair-use analysis. He cited cases for the proposition that copyright is not reserved for the \u201cwell-behaved\u201d and argued that even if there were bad-faith evidence, it should not defeat fair use.<\/p>\n
\u2018A Classic Case of Substitution\u2019<\/h3>\n
Arguing for Thomson Reuters, Cendali began by addressing the scope of the appeal. She said the district court had granted summary judgment on 2,834 headnotes, of which Judge Stephanos Bibas had found 2,430 protectable and infringed. She said the court need not go beyond that set of headnotes, although she also argued that headnotes are categorically copyrightable under long-established precedent.<\/p>\n
Cendali then turned to fair use, framing the case as one of substitution. Citing Supreme Court authority, she said substitution is \u201ccopyright\u2019s bete noire\u201d and \u201cthis is a classic case of substitution\u201d in that ROSS built and marketed a product to replace Westlaw.<\/p>\n
She pointed to ROSS marketing materials that, according to Thomson Reuters, urged users to \u201cchoose ROSS or Westlaw,\u201d and said that was a quintessential example of a substitute product.<\/p>\n
Judge Bove asked Cendali to identify the relevant market for the fourth factor, noting that the parties appeared \u201cworlds apart\u201d on that question.<\/p>\n
Cendali identified three forms of market harm: harm from ROSS\u2019s product competing as a substitute for Westlaw, harm to Thomson Reuters\u2019 ability to use its own headnotes exclusively to train its own AI products, and harm to a potential market for licensing headnotes for AI training by other AI companies.<\/p>\n
Cendali disputed ROSS\u2019s suggestion that Thomson Reuters had not used its headnotes for AI. She said Thomson Reuters had trained on its own headnotes years before ROSS was founded and that Westlaw\u2019s use of AI and natural-language search predated ROSS. She also pointed to amicus briefing by Lexis as evidence that other legal research providers were developing AI products during the same period.<\/p>\n
\u201cSo as much as they try to cast themselves as tremendous innovators, they really were latecomers,\u201d Cendali argued.<\/p>\n
Judge Montgomery-Reeves drew an analogy to the 3rd Circuit\u2019s Video Pipeline<\/em> case involving Disney trailers, asking whether the absence of a stand-alone market for the copied material defeated a market-harm argument.<\/p>\nIt did not, Cendali said. She argued that, as in Video Pipeline<\/em>, copied content could still harm the value of a broader platform even if it was not separately sold on its own.<\/p>\nOn the first fair-use factor, Cendali argued that ROSS\u2019s use was not transformative because it used Westlaw headnotes to build a competing legal research tool. Training was merely the means to an end, she said, and under the Supreme Court\u2019s Warhol<\/em> decision, the proper inquiry focuses on the purpose of the use. Here, both products served the same purpose: helping users conduct legal research.<\/p>\nJudge Bove asked what the record showed about the nature of ROSS\u2019s training and technology. Cendali responded that the product ultimately returned cases and quotes, which she said was similar to what Westlaw did. She distinguished the case from disputes involving gen AI systems that produce new text, saying ROSS\u2019s product was a legal research system for finding court opinions in response to legal topics.<\/p>\n
Cendali also argued that ROSS took the \u201cheart\u201d of Westlaw\u2019s work, even if the number of headnotes copied was small compared with Westlaw\u2019s overall database. She said Westlaw\u2019s editorial enhancements, including headnotes and the Key Number System, are what differentiate it from a bare collection of cases. ROSS, she said, took the question-and-answer pairs created through that editorial work rather than creating its own from the underlying opinions.<\/p>\n
The panel also explored the relevance of cases involving intermediate copying, such as Sega<\/em>, Sony<\/em> and Google v. Oracle<\/em>. Cendali argued that those cases did not help ROSS because they involved copying necessary to understand functional computer code or achieve compatibility. Here, she said, ROSS had access to the public judicial opinions and did not need to copy Westlaw\u2019s headnotes to build its system.<\/p>\nRebuttal: Not Merely \u2018AI\u2019 As A Label<\/h3>\n
In rebuttal, Davies returned to the technology, emphasizing that ROSS was not merely invoking \u201cAI\u201d as a label. He said the system used deep neural-network technology similar in kind to the systems later associated with ChatGPT and Anthropic, although he acknowledged that ROSS\u2019s product was not generative AI.<\/p>\n
In response to Judge Montgomery-Reeves, he agreed that ROSS did not write briefs or generate legal answers, but instead returned quotes from judicial opinions.<\/p>\n
Davies also challenged Thomson Reuters\u2019 market-harm evidence, arguing that the record lacked concrete proof that ROSS harmed Westlaw\u2019s market. Judge Bove reminded him that, under precedent, ROSS bore the burden on fair use, including factor four.<\/p>\n
Davies acknowledged the burden but argued that Thomson Reuters was better positioned to produce evidence such as subscriber numbers and customer data. He said the record included evidence that some users left ROSS and returned to Westlaw.<\/p>\n
The argument ended with an exchange over whether the intermediate-copying cases were meaningfully analogous. Judge Bove noted that in Sega<\/em> and Sony<\/em>, the copying was necessary because humans could not read object code, whereas ROSS employees could read the judicial opinions and create their own training materials from them.<\/p>\nDavies responded that there is no strict necessity requirement for fair use and that ROSS had a legitimate purpose in building a new legal research technology under time pressure as a startup.<\/p>\n
As the argument wrapped up, Judge Bove framed the issue more broadly, telling Davies, \u201cI think this case is about balancing what we have and where are the red lines.\u201d<\/p>\n
\u201cIt\u2019s all about balancing,\u201d Davies agreed, \u201cas all copyright cases are, Your Honor.\u201d<\/p>\n
The court did not indicate when it would rule.<\/p>\n","protected":false},"excerpt":{"rendered":"
The closely watched copyright litigation between Thomson Reuters and ROSS Intelligence returned to the spotlight this month as a three-judge panel of the 3rd U.S. Circuit Court of Appeals heard arguments over whether ROSS\u2019s use of Westlaw headnotes to train its legal research system was protected by fair use. At oral argument June 11 in […]<\/p>\n","protected":false},"author":3,"featured_media":155462,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-155461","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawsite"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/xira.com\/p\/wp-content\/uploads\/2026\/06\/TR-ROSS-Featured-Image-1024x576-ukmlp0.png?fit=1024%2C576&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/155461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=155461"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/155461\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media\/155462"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=155461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=155461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=155461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}