The “fair use” doctrine under the US Copyright Act of 1976 allows for copyrighted materials to be used for purposes like criticism, journalism, and research.
Whether something is deemed fair use depends on several factors, including how transformative it is, how much of the work is used, and whether the reproduction alters the market value of the original.
It’s the keystone of the AI industry’s legal defense in a litany of ongoing lawsuits filed by rightsholders, who are accusing tech companies of unlawfully using their intellectual property to train their AI models.
OpenAI CEO Sam Altman has long maintained that the AI race would be “over” if this key provision of copyright law were ever overturned. After all, with legal precedent, AI companies like OpenAI could finally be held accountable for shamelessly crawling the entire web, including vast swathes of copyrighted materials, to shovel into the maws of their AI models.
Now, the legal system is starting to show signs that the defense could be on thin ice. Last week, a US appeals court upheld a ruling that AI legal research company Ross Intelligence had broken copyright law by training its legal search engine on materials taken from Thomson Reuters’ Westlaw legal research platform and database.
Ross shut down in 2021, shortly after the lawsuit was filed, citing mounting financial strains caused by the litigation.
The decision by the Third Circuit court of appeals — a first-of-its-kid ruling, per Reuters — marks a pivotal, albeit heavily nuanced, moment in the ongoing fight between AI companies and rights holders, who accuse the former of unfairly taking advantage of their work.
There have been dozens of other lawsuits like it, filed by authors, comedians, the music industry, influential newspapers, and even Encyclopedia Britannica. For years now, the pressure has been mounting as more and more rights holders cry foul, accusing AI companies of plundering their work.
How influential the latest appeals court ruling will be is debatable. The court found that Ross had effectively copy-pasted Thomson Reuters’ “headnotes,” or brief editorial summaries of legal issues, verbatim for its legal search engine, a practice that isn’t difficult to separate from fair use.
“Ross took the headnotes to make it easier to develop a competing legal research tool,” a Delaware federal court judge wrote in the original ruling last year. “So Ross’s use is not transformative.”
In fact, as Copyright Lately‘s Aaron Moss points out, even the AI industry called the latest ruling a win, with tech industry group Chamber of Progress senior director of AI Adam Eisgrau tweeting that the ruling “implicitly confirms that highly transformative gen AI training to produce a hugely multi-purpose model with substantial public benefit is likely fair use!”
“Judging by all the victory laps, you might think everyone had read a different opinion,” Moss wrote. “They hadn’t.”
The vestiges of Ross have already vowed to take the lawsuit to the Supreme Court. Even then, whether yet another decision in favor of Thomson Reuters could settle a major legal battle that’s been brewing for years is a tossup.
Moss argued that the case isn’t the “best vehicle for a sweeping ruling on generative AI.”
“It reached the Third Circuit on interlocutory review, damages remain unresolved, Ross no longer exists, and its AI wasn’t generative,” he concluded.
But rights holders have plenty of other prongs still in the fire.
“There are cleaner cases for deciding the future of generative AI training, and a couple of them are already on the calendar,” Moss noted.
For instance, a hearing for a separate lawsuit filed by Concord Music Group — which accuses Anthropic of unlawfully using thousands of copyrighted song lyrics to train its Claude AI model — is scheduled for later this month.
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