Opinion: AI Training Fair Use Just Met Its First Appeals Court Test

AI training fair use has finally faced an appeals court, and the verdict should sober the industry. On 30 September the Third Circuit upheld a ruling for Thomson Reuters against Ross Intelligence. This is opinion, but the facts are plain.

Ross copied Westlaw headnotes to build a rival legal search tool. Thomson Reuters sued in 2020. The lower court found the copying was not transformative. It said Ross took the headnotes to make a competing product easier to build. The appeals court has now affirmed that outcome. Its full reasoning was still sealed at the time of writing.

Why AI training fair use matters

This is the first US appellate decision on the question. Dozens of lawsuits against AI developers are still pending. Every one of them will cite this case.

Let me be careful. The ruling is narrow. Ross built a non-generative tool that competed directly with its source. Big chatbot makers will argue their models are different. They will say the models learn patterns, not passages. Courts may agree in some cases.

Yet the direction is clear. Copying protected material to build a competitor is a weak fair-use story. That principle does not depend on the size of the model.

What honest firms should do next

The lesson is simple. License what you train on. Pay the writers, editors and publishers whose work makes your product valuable. Many firms already do this in part. The rest are gambling that judges will rescue them.

Ross shut down in 2021, citing legal costs. That is a warning about how expensive the gamble can be. Small start-ups cannot afford it. Giants can, and that is exactly why the rules matter. A legal regime that only the richest can survive is no free market.

Freethinkers should care because knowledge is a commons only when creators can eat. Ideas need authors. Authors need income. A society that lets machines absorb everyone’s work without consent will soon have fewer people willing to write.

This also connects to our argument that AI must obey existing law. Copyright is existing law. No new statute is needed for firms to respect it.

The fight is far from over. Appeals, en banc requests and new cases will follow. But the era of assuming that scraping is automatically fair has ended.

Fact basis: Claims Journal and Law360 reports of 30 September 2026 on Thomson Reuters v. Ross Intelligence. The judgment’s reasoning was reported as sealed. This column is opinion. Read the Claims Journal report.