Artificial intelligence is changing how businesses create, search, and compete, but a recent federal appeals court decision shows that innovation does not automatically override intellectual property rights. On September 29, 2026, the U.S. Court of Appeals for the Third Circuit upheld a ruling against Ross Intelligence in a copyright dispute involving Thomson Reuters and its Westlaw legal research platform. Ross had used thousands of Westlaw headnotes, which are editorial summaries of legal points, while developing an AI-powered legal research product. The court concluded that Ross’s use was not protected by the fair use doctrine. The decision is especially significant because it is the first U.S. appellate ruling to address fair use in the context of AI training.
So, what does this mean in plain English? Copyright law generally gives creators and businesses certain exclusive rights over original works, but the fair use doctrine can allow limited use of copyrighted material in certain circumstances. Fair use is not a blanket exception for companies simply because they are using technology or artificial intelligence. In this case, the Third Circuit found that Ross’s use of Thomson Reuters’ copyrighted headnotes was not sufficiently transformative, meaning Ross was using the material in a way that served a competing commercial purpose rather than creating a fundamentally different use. The court also determined that the Westlaw headnotes contained enough original expression to qualify for copyright protection.
The decision has implications far beyond legal research. Imagine a company building an AI tool that analyzes photographs, books, music, videos, software, or other copyrighted works. The fact that the material is being processed by an AI system does not automatically make the underlying copyright issues disappear. Pop culture provides an easy way to understand the concern: if someone created an AI system using protected characters, artwork, music, or other creative works to build a competing commercial product, the important question would not simply be whether “AI made it.” Businesses may need to consider where their training data came from, whether they have permission to use it, whether licenses are available, and whether their use could create copyright infringement or other intellectual property risks.
For startups and established companies alike, the case is also a reminder that an AI strategy should include an intellectual property strategy. Companies developing AI products should carefully document their data sources, review licensing agreements, understand copyright ownership, and consider how intellectual property rights could affect future investment, partnerships, licensing deals, or acquisitions. Businesses that own valuable content should also consider how copyright registration, contracts, licensing programs, and other IP protection strategies can help safeguard their assets. The Thomson Reuters v. Ross decision does not answer every question surrounding generative AI and copyright, and different facts can produce different legal outcomes. Still, it highlights a practical lesson for businesses: using AI does not eliminate the need to respect intellectual property rights.
Building an AI Strategy Means Building an IP Strategy
The Thomson Reuters v. Ross decision reinforces an important point for companies developing or deploying artificial intelligence: innovation does not operate outside existing intellectual property law. Businesses that rely on copyrighted material to train, refine, or support AI systems should carefully evaluate where that content comes from, what rights they have to use it, and whether licensing, contractual permissions, or other safeguards may be necessary. At the same time, companies that own valuable content should consider how copyright registration, licensing programs, and contractual protections can help preserve the value of their intellectual property as AI technologies continue to evolve.
At Omni Legal Group, our Los Angeles intellectual property attorneys advise startups, technology companies, software developers, content owners, creators, and established businesses on copyright law, AI-related intellectual property issues, licensing agreements, technology transactions, and broader IP strategy. We help clients evaluate legal risk, structure agreements, protect valuable content, and develop practical strategies that support innovation without overlooking the rights of others.
The legal questions surrounding AI will continue to evolve, but one principle is already clear: businesses should understand their intellectual property rights and obligations before building valuable products around someone else’s content.
Contact Omni Legal Group today to schedule a confidential strategy session with one of our copyright lawyers in Los Angeles. Call 855.433.2226 to speak with our legal team about AI training, copyright ownership, licensing, fair use, and strategies for protecting your business as artificial intelligence continues to reshape the marketplace.
