{ "attribution": { "source": "legal.exploreworldai.com", "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca3-25-2153-2026-09-30", "cite_as": "NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca3-25-2153-2026-09-30)", "license": "https://legal.exploreworldai.com/revision", "version": "legal-2026-10-06", "fingerprint": "ewai:se:cbc925", "proof": "sha256:5b59b2c738ee16e4416686ef39e02521a673bee2c4faf4bdb31104e6166bed5b", "jurisdiction": "se", "lang": "en", "publisher": "NovaCopilot by ExploreWorld Legal", "terms": "https://legal.exploreworldai.com/om" }, "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor", "contact": "stig@valkiv.com" }, "item": { "schema_version": "1.0.0", "id": "us:ca3-25-2153-2026-09-30", "jurisdiction": "us", "lang": "en", "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor", "contact": "stig@valkiv.com" }, "sections": [ { "title": "UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT", "paragraphs": [] }, { "title": "No. 25-2153", "paragraphs": [] }, { "title": "THOMSON REUTERS ENTERPRISE CENTRE GMBH;", "paragraphs": [] }, { "title": "WEST PUBLISHING CORP", "paragraphs": [ "para_5", "para_6" ] }, { "title": "Appellant", "paragraphs": [ "para_8", "para_9" ] }, { "title": "Judge Stephanos Bibas,* No. 1:20-cv-00613", "paragraphs": [ "para_11" ] }, { "title": "Circuit Judges", "paragraphs": [] }, { "title": "Argued: June 11, 2026; Filed: Sept. 29, 2026", "paragraphs": [ "para_14" ] }, { "title": "OPINION OF THE COURT", "paragraphs": [ "para_16" ] }, { "title": "Artificial intelligence (“AI”) is a powerful machine learn-", "paragraphs": [ "para_18", "para_19", "para_20", "para_21", "para_22" ] }, { "title": "2", "paragraphs": [ "para_24" ] }, { "title": "Center GmbH (“Thomson Reuters”), charges a new competitor", "paragraphs": [ "para_26", "para_27", "para_28" ] }, { "title": "But new technology is often at the forefront of our copyright", "paragraphs": [ "para_30", "para_31", "para_32" ] }, { "title": "1986). Stripped to its essence, this interlocutory appeal asks us", "paragraphs": [ "para_34" ] }, { "title": "Under ROSS’s framing, this case appears to concern the", "paragraphs": [ "para_36", "para_37", "para_38", "para_39" ] }, { "title": "ROSS’s use of those materials was fair. The undisputed evi-", "paragraphs": [ "para_41", "para_42", "para_43" ] }, { "title": "Thomson Reuters’s materials are copyrightable and that", "paragraphs": [] }, { "title": "ROSS’s use was not fair. Thus, we will affirm the District", "paragraphs": [] }, { "title": "Court’s order granting Thomson Reuters partial summary", "paragraphs": [ "para_47" ] }, { "title": "I. FACTS & PROCEDURAL HISTORY", "paragraphs": [] }, { "title": "This story begins with our country’s founding. As the", "paragraphs": [] }, { "title": "United States took its first steps as an independent nation, it", "paragraphs": [] }, { "title": "3", "paragraphs": [ "para_52", "para_53", "para_54", "para_55", "para_56", "para_57" ] }, { "title": "Later, Thomson Reuters created Westlaw, an online legal-", "paragraphs": [ "para_59", "para_60", "para_61", "para_62", "para_63", "para_64", "para_65", "para_66" ] }, { "title": "6510. In Westlaw’s user interface, the headnotes sit above the", "paragraphs": [ "para_68", "para_69", "para_70", "para_71", "para_72", "para_73" ] }, { "title": "When drafting headnotes, Thomson Reuters’s editors must", "paragraphs": [ "para_75", "para_76", "para_77", "para_78" ] }, { "title": "4", "paragraphs": [ "para_80", "para_81", "para_82", "para_83", "para_84", "para_85" ] }, { "title": "Thomson Reuters owns a registered copyright in Westlaw", "paragraphs": [ "para_87", "para_88", "para_89", "para_90", "para_91", "para_92", "para_93", "para_94", "para_95", "para_96" ] }, { "title": "Toronto computer science students who entered an IBM com-", "paragraphs": [ "para_98", "para_99", "para_100", "para_101", "para_102" ] }, { "title": "5", "paragraphs": [ "para_104" ] }, { "title": "AI legal-research platform.1", "paragraphs": [] }, { "title": "ROSS then created an AI legal search engine that would", "paragraphs": [ "para_107", "para_108", "para_109", "para_110", "para_111", "para_112", "para_113" ] }, { "title": "For ROSS’s AI legal search engine to work, the AI program", "paragraphs": [ "para_115", "para_116", "para_117" ] }, { "title": "AI training memoranda. LegalEase wrote approximately", "paragraphs": [] }, { "title": "25,000 legal memos, each of which presented a legal question", "paragraphs": [ "para_120", "para_121", "para_122" ] }, { "title": "1 AI here refers to machine learning technology in which a soft-", "paragraphs": [ "para_124" ] }, { "title": "The program is given data which contains examples of inputs", "paragraphs": [ "para_126", "para_127", "para_128", "para_129" ] }, { "title": "6", "paragraphs": [ "para_131", "para_132", "para_133", "para_134" ] }, { "title": "A great passage was completely responsive; a good passage", "paragraphs": [ "para_136", "para_137", "para_138", "para_139", "para_140", "para_141", "para_142", "para_143", "para_144" ] }, { "title": "ROSS did not hide its intention that this for-profit AI plat-", "paragraphs": [ "para_146", "para_147" ] }, { "title": "App. 4519. ROSS executives hoped ROSS would serve as a", "paragraphs": [ "para_149", "para_150" ] }, { "title": "Upon learning of ROSS’s actions, Thomson Reuters sued", "paragraphs": [] }, { "title": "ROSS, alleging copyright infringement and tortious", "paragraphs": [] }, { "title": "2 For purposes of this appeal, ROSS is not challenging (1) that", "paragraphs": [] }, { "title": "LegalEase and Morae Global’s actions are attributable to", "paragraphs": [] }, { "title": "ROSS and (2) that LegalEase and Morae Global copied", "paragraphs": [ "para_156" ] }, { "title": "7", "paragraphs": [ "para_158", "para_159", "para_160", "para_161", "para_162", "para_163", "para_164", "para_165", "para_166" ] }, { "title": "II. JURISDICTION AND STANDARD OF REVIEW", "paragraphs": [] }, { "title": "The District Court had jurisdiction under 28 U.S.C. §§", "paragraphs": [] }, { "title": "1331, 1338. We have jurisdiction to hear this interlocutory ap-", "paragraphs": [ "para_170" ] }, { "title": "3 An expert for ROSS stated that the memo questions corre-", "paragraphs": [ "para_172", "para_173", "para_174", "para_175", "para_176", "para_177", "para_178", "para_179" ] }, { "title": "4 ROSS never challenged the originality of the Key Number", "paragraphs": [] }, { "title": "System in any of its briefing, despite its inclusion in the certi-", "paragraphs": [ "para_182" ] }, { "title": "8", "paragraphs": [ "para_184", "para_185", "para_186", "para_187" ] }, { "title": "We review a grant of summary judgment de novo. TD Bank", "paragraphs": [] }, { "title": "N.A. v. Hill, 928 F.3d 259, 270 (3d Cir. 2019). Summary judg-", "paragraphs": [ "para_190", "para_191", "para_192", "para_193", "para_194", "para_195" ] }, { "title": "III. ANALYSIS", "paragraphs": [] }, { "title": "Our Constitution empowers Congress “to promote the pro-", "paragraphs": [ "para_198", "para_199", "para_200", "para_201", "para_202", "para_203", "para_204", "para_205" ] }, { "title": "Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598", "paragraphs": [ "para_207", "para_208" ] }, { "title": "9", "paragraphs": [] }, { "title": "But the Copyright Act does not focus solely on encouraging", "paragraphs": [ "para_211" ] }, { "title": "Stated differently, it “reflects a balance of competing claims", "paragraphs": [ "para_213", "para_214", "para_215", "para_216" ] }, { "title": "422 U.S. 151, 156 (1975)). That “balancing act between crea-", "paragraphs": [ "para_218", "para_219", "para_220" ] }, { "title": "To establish a claim of copyright infringement, one must", "paragraphs": [ "para_222", "para_223", "para_224" ] }, { "title": "2026) (citing Whelan Assocs., 797 F.2d at 1231). But one can", "paragraphs": [ "para_226" ] }, { "title": "U.S.C. § 102(a). Even if these elements are satisfied, the “fair", "paragraphs": [ "para_228", "para_229", "para_230", "para_231", "para_232", "para_233", "para_234", "para_235" ] }, { "title": "10", "paragraphs": [] }, { "title": "A. Originality5", "paragraphs": [] }, { "title": "We begin with originality. “Copyright protection sub-", "paragraphs": [ "para_239" ] }, { "title": "This is an “extremely low” bar, as works need only be “inde-", "paragraphs": [ "para_241", "para_242", "para_243" ] }, { "title": "Serv. Co., 499 U.S. 340, 345–46 (1991). Although “the vast", "paragraphs": [ "para_245", "para_246", "para_247" ] }, { "title": "(holding that the alphabetical arrangement of a phonebook", "paragraphs": [ "para_249" ] }, { "title": "All 2,243 independently created headnotes at issue in this", "paragraphs": [ "para_251", "para_252", "para_253", "para_254" ] }, { "title": "Westlaw’s drafting criteria. Each headnote had to convey", "paragraphs": [ "para_256" ] }, { "title": "5 The District Court mused that even headnotes that quoted ju-", "paragraphs": [ "para_258", "para_259", "para_260", "para_261", "para_262" ] }, { "title": "11", "paragraphs": [ "para_264", "para_265", "para_266", "para_267", "para_268", "para_269", "para_270" ] }, { "title": "In Callaghan v. Myers, 128 U.S. 617 (1888), the Court held", "paragraphs": [ "para_272", "para_273", "para_274", "para_275" ] }, { "title": "Over a century later, the Court applied this principle to work", "paragraphs": [ "para_277" ] }, { "title": "Callaghan “upheld the reporter’s copyright interest in several", "paragraphs": [ "para_279", "para_280", "para_281", "para_282", "para_283" ] }, { "title": "ROSS offers three counters. First, ROSS argues that rec-", "paragraphs": [ "para_285", "para_286" ] }, { "title": "Opening Br. 22. Not so. Headnotes are not law; judicial opin-", "paragraphs": [ "para_288", "para_289" ] }, { "title": "12", "paragraphs": [] }, { "title": "Second, ROSS argues the headnotes are not copyrightable", "paragraphs": [ "para_292", "para_293", "para_294", "para_295", "para_296" ] }, { "title": "Inc., 931 F.3d 215, 222 (3d Cir. 2019) (quoting Educ. Testing", "paragraphs": [] }, { "title": "Servs. v. Katzman, 793 F.2d 533, 539 (3d Cir. 1986)). But the", "paragraphs": [ "para_299", "para_300", "para_301", "para_302", "para_303", "para_304", "para_305", "para_306", "para_307", "para_308", "para_309" ] }, { "title": "49; see, e.g., Amicus Br. for RELX, Inc. (hereinafter the “Lexis", "paragraphs": [ "para_311", "para_312" ] }, { "title": "West Publishing Co., 158 F.3d 674 (2d Cir. 1998), to support", "paragraphs": [ "para_314", "para_315", "para_316", "para_317", "para_318" ] }, { "title": "13", "paragraphs": [ "para_320", "para_321", "para_322", "para_323", "para_324", "para_325", "para_326", "para_327", "para_328", "para_329", "para_330", "para_331", "para_332" ] }, { "title": "J.) (finding unoriginal product serial numbers in which “each", "paragraphs": [ "para_334", "para_335", "para_336" ] }, { "title": "B. Fair Use", "paragraphs": [] }, { "title": "We turn next to ROSS’s purported fair-use defense. “[T]he", "paragraphs": [ "para_339", "para_340", "para_341", "para_342" ] }, { "title": "6 See Lexis Br. at 12 (explaining that Lexis, a Westlaw com-", "paragraphs": [ "para_344", "para_345" ] }, { "title": "14", "paragraphs": [ "para_347", "para_348", "para_349" ] }, { "title": "471 U.S. at 560. But where there are undisputed facts “suffi-", "paragraphs": [ "para_351", "para_352", "para_353" ] }, { "title": "In determining whether a use is fair, we must consider the", "paragraphs": [ "para_355" ] }, { "title": "(1) the purpose and character of the use, including", "paragraphs": [ "para_357", "para_358", "para_359", "para_360", "para_361", "para_362", "para_363" ] }, { "title": "ROSS bears the burden of demonstrating its copying was jus-", "paragraphs": [ "para_365", "para_366" ] }, { "title": "1. Purpose and Character of the Use", "paragraphs": [] }, { "title": "The first factor examines the “purpose and character” of", "paragraphs": [] }, { "title": "ROSS’s use. 17 U.S.C. § 107(1); Andy Warhol, 598 U.S. at", "paragraphs": [] }, { "title": "15", "paragraphs": [] }, { "title": "532–33. To assess this factor, we first consider whether “a use", "paragraphs": [ "para_372", "para_373" ] }, { "title": "U.S. at 531; see also UpCodes, 172 F.4th at 265 (“If a new", "paragraphs": [ "para_375", "para_376", "para_377", "para_378", "para_379", "para_380", "para_381" ] }, { "title": "U.S. 569, 579 (1994)). The “lodestar” of this inquiry is", "paragraphs": [ "para_383" ] }, { "title": "4 Nimmer on Copyright § 13F.10[G][2][a][i] (2026); see also", "paragraphs": [] }, { "title": "Andy Warhol, 598 U.S. at 531 (“[A] use that has a distinct pur-", "paragraphs": [ "para_386", "para_387", "para_388", "para_389", "para_390", "para_391", "para_392", "para_393", "para_394", "para_395" ] }, { "title": "In sum, we must balance “the degree of difference [in pur-", "paragraphs": [ "para_397" ] }, { "title": "And if “an original work and a secondary use share the same", "paragraphs": [] }, { "title": "16", "paragraphs": [ "para_400", "para_401", "para_402", "para_403" ] }, { "title": "We start with whether ROSS’s use of Thomson Reuters’s", "paragraphs": [ "para_405", "para_406", "para_407", "para_408", "para_409", "para_410", "para_411", "para_412", "para_413", "para_414" ] }, { "title": "Thomson Reuters uses its headnotes to help legal researchers", "paragraphs": [ "para_416", "para_417", "para_418", "para_419" ] }, { "title": "ROSS did not use the headnotes in precisely the same fashion", "paragraphs": [ "para_421", "para_422", "para_423", "para_424" ] }, { "title": "AI program for the benefit of its legal-research platform. So", "paragraphs": [ "para_426" ] }, { "title": "17", "paragraphs": [ "para_428", "para_429", "para_430", "para_431" ] }, { "title": "7 We note that the United States Department of Justice (“DOJ”)", "paragraphs": [ "para_433", "para_434" ] }, { "title": "Interest of the United States, In re: OpenAI, Inc. Copyright In-", "paragraphs": [ "para_436" ] }, { "title": "(hereinafter “DOJ Statement __”). The concerns raised in that", "paragraphs": [ "para_438" ] }, { "title": "Anthropic PBC, 787 F. Supp. 3d 1007, 1014 (N.D. Cal. 2025)", "paragraphs": [ "para_440", "para_441" ] }, { "title": "Statement at 10; see also Kadrey v. Meta Platforms, Inc., 788", "paragraphs": [] }, { "title": "F. Supp. 3d 1026, 1034 (N.D. Cal. 2025) (exploring whether", "paragraphs": [ "para_444", "para_445" ] }, { "title": "AI platform cannot generate original expression, and the evi-", "paragraphs": [ "para_447", "para_448", "para_449" ] }, { "title": "DOJ Statement at 13 (citation modified). Here, ROSS trained", "paragraphs": [ "para_451" ] }, { "title": "Westlaw. In any event, the DOJ’s filing in In re: OpenAI", "paragraphs": [ "para_453", "para_454", "para_455" ] }, { "title": "18", "paragraphs": [] }, { "title": "Given that ROSS’s use was highly commercial and mini-", "paragraphs": [ "para_458", "para_459", "para_460", "para_461", "para_462", "para_463", "para_464" ] }, { "title": "178 (2d Cir. 2018) (reasoning that the “commercial nature of a", "paragraphs": [ "para_466", "para_467", "para_468" ] }, { "title": "ROSS offers two arguments to support the opposite conclu-", "paragraphs": [ "para_470" ] }, { "title": "Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015), dictates a", "paragraphs": [ "para_472" ] }, { "title": "Google’s scanning of entire books had the “highly transforma-", "paragraphs": [ "para_474", "para_475" ] }, { "title": "17; see also Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 97", "paragraphs": [] }, { "title": "(2d Cir. 2014) (holding similar use was fair where there was", "paragraphs": [ "para_478", "para_479", "para_480", "para_481", "para_482", "para_483" ] }, { "title": "19", "paragraphs": [ "para_485", "para_486", "para_487" ] }, { "title": "ROSS’s platform uses Thomson Reuters’s headnotes to help", "paragraphs": [ "para_489", "para_490", "para_491" ] }, { "title": "Google’s search feature may have driven users toward a book", "paragraphs": [ "para_493" ] }, { "title": "217–18. Not so here. ROSS’s use does not lead a user to", "paragraphs": [ "para_495" ] }, { "title": "Second, ROSS argues that three “intermediate copying”", "paragraphs": [ "para_497" ] }, { "title": "Circuit, dictate a different conclusion. Opening Br. 44. In a", "paragraphs": [ "para_499", "para_500", "para_501", "para_502", "para_503" ] }, { "title": "It held that a video game developer could copy Sega’s com-", "paragraphs": [ "para_505", "para_506" ] }, { "title": "977 F.2d 1510, 1514 (9th Cir. 1992). Another panel similarly", "paragraphs": [ "para_508", "para_509", "para_510", "para_511" ] }, { "title": "20", "paragraphs": [] }, { "title": "In each of these cases, computer code was copied to enable", "paragraphs": [ "para_514", "para_515", "para_516", "para_517" ] }, { "title": "31 (stating that Google copied Oracle API “only insofar as", "paragraphs": [ "para_519", "para_520", "para_521", "para_522", "para_523", "para_524", "para_525", "para_526", "para_527", "para_528", "para_529", "para_530" ] }, { "title": "8 Also critical to the outcome in Oracle was that the at-issue", "paragraphs": [ "para_532", "para_533", "para_534", "para_535" ] }, { "title": "29. By contrast, Thomson Reuters’s headnotes do not derive", "paragraphs": [ "para_537" ] }, { "title": "21", "paragraphs": [] }, { "title": "8545–46. Unlike necessity, ease is not a justification for cop-", "paragraphs": [ "para_540" ] }, { "title": "2. Nature of the Copyrighted Work", "paragraphs": [ "para_542" ] }, { "title": "17 U.S.C. § 107(2). Under this factor we consider whether the", "paragraphs": [ "para_544", "para_545", "para_546" ] }, { "title": "64. More creative, less factual works are “closer to the core of", "paragraphs": [ "para_548" ] }, { "title": "This factor will generally weigh in favor of fair use when a", "paragraphs": [] }, { "title": "9 Courts have at times considered whether copying was done", "paragraphs": [ "para_551" ] }, { "title": "U.S. at 32–33 (explaining the good faith consideration but ex-", "paragraphs": [ "para_553", "para_554", "para_555" ] }, { "title": "4969–76, 6443, 6449, 6454, 6495 (ROSS attempting to access", "paragraphs": [] }, { "title": "Westlaw with law-firm investor credentials despite notice that", "paragraphs": [ "para_558" ] }, { "title": "6491–93 (stating ROSS employee inquired about a Westlaw", "paragraphs": [ "para_560", "para_561", "para_562", "para_563", "para_564" ] }, { "title": "22", "paragraphs": [ "para_566" ] }, { "title": "28–29. But courts have noted that “[t]he second factor has", "paragraphs": [ "para_568" ] }, { "title": "Authors Guild, 804 F.3d at 220. Here, Thomson Reuters pub-", "paragraphs": [ "para_570", "para_571", "para_572", "para_573" ] }, { "title": "3. Amount and Substantiality of the Portion Used", "paragraphs": [] }, { "title": "For the third factor, we evaluate whether “the amount and", "paragraphs": [ "para_576", "para_577", "para_578", "para_579", "para_580", "para_581" ] }, { "title": "471 U.S. at 565. In evaluating the third factor, we “recognize", "paragraphs": [ "para_583", "para_584", "para_585" ] }, { "title": "ROSS copied the entire text of the 25,000 Westlaw-written", "paragraphs": [ "para_587", "para_588", "para_589", "para_590", "para_591" ] }, { "title": "23", "paragraphs": [ "para_593", "para_594" ] }, { "title": "(explaining that a transformative purpose allows more exten-", "paragraphs": [ "para_596", "para_597" ] }, { "title": "ROSS responds that it took an insubstantial portion of", "paragraphs": [] }, { "title": "Thomson Reuters’s work—only 0.08% of Thomson Reuters’s", "paragraphs": [] }, { "title": "28 million headnotes. But copying even an “insubstantial por-", "paragraphs": [ "para_601", "para_602" ] }, { "title": "564–65. “The crux of the inquiry is whether ‘no more was", "paragraphs": [ "para_604", "para_605" ] }, { "title": "The purpose behind ROSS’s copying was minimally trans-", "paragraphs": [ "para_607", "para_608", "para_609", "para_610", "para_611" ] }, { "title": "10 Additionally, we affirm the District Court’s holding that each", "paragraphs": [ "para_613", "para_614", "para_615", "para_616", "para_617", "para_618", "para_619" ] }, { "title": "24", "paragraphs": [] }, { "title": "4. Market Effect of the Use", "paragraphs": [] }, { "title": "The fourth factor concerns “the effect of the use upon the", "paragraphs": [ "para_623" ] }, { "title": "U.S.C. § 107(4). The “potential market” includes both the", "paragraphs": [ "para_625", "para_626" ] }, { "title": "U.S.C. 107(4)). In this context, we will also consider any", "paragraphs": [ "para_628" ] }, { "title": "U.S. at 35. So to resolve this appeal, we consider harm to the", "paragraphs": [ "para_630", "para_631", "para_632" ] }, { "title": "We begin with the original market. The parties dispute", "paragraphs": [ "para_634", "para_635", "para_636", "para_637", "para_638", "para_639" ] }, { "title": "Pipeline, Inc. v. Buena Vista Home Entertainment, Inc., 342", "paragraphs": [] }, { "title": "F.3d 191, 202 (3d Cir. 2003), abrogated in part on other", "paragraphs": [ "para_642", "para_643", "para_644", "para_645" ] }, { "title": "We rejected that argument, stating that “[t]he [fair use] statute", "paragraphs": [ "para_647" ] }, { "title": "25", "paragraphs": [ "para_649", "para_650", "para_651", "para_652", "para_653", "para_654", "para_655", "para_656", "para_657" ] }, { "title": "Westlaw subscription. By copying the headnotes and using", "paragraphs": [ "para_659" ] }, { "title": "ROSS appropriated the headnotes’ value for finding and ana-", "paragraphs": [ "para_661", "para_662" ] }, { "title": "Video Pipeline supports the conclusion that ROSS’s copying", "paragraphs": [ "para_664" ] }, { "title": "Thomson Reuters argues that the legal-research platform", "paragraphs": [ "para_666", "para_667", "para_668", "para_669", "para_670", "para_671", "para_672", "para_673" ] }, { "title": "(quoting Campbell, 510 U.S. at 590). ROSS offers no evidence", "paragraphs": [ "para_675" ] }, { "title": "26", "paragraphs": [] }, { "title": "We turn now to potential derivative markets for Thomson", "paragraphs": [] }, { "title": "Reuters’s headnotes. The parties dispute the relevant potential", "paragraphs": [ "para_679", "para_680", "para_681", "para_682", "para_683", "para_684", "para_685", "para_686", "para_687", "para_688", "para_689", "para_690" ] }, { "title": "Here, the evidence shows that the market for licensing", "paragraphs": [ "para_692", "para_693", "para_694" ] }, { "title": "ROSS offers no evidence to disprove this. That Thomson Reu-", "paragraphs": [ "para_696", "para_697", "para_698", "para_699", "para_700", "para_701", "para_702", "para_703" ] }, { "title": "27", "paragraphs": [] }, { "title": "Finally, we consider whether the public benefits are “re-", "paragraphs": [ "para_706", "para_707", "para_708", "para_709" ] }, { "title": "36. ROSS claims its copying will benefit the public by increas-", "paragraphs": [ "para_711", "para_712", "para_713", "para_714", "para_715", "para_716" ] }, { "title": "Finally, ROSS argues that AI is critical for national security", "paragraphs": [ "para_718", "para_719", "para_720", "para_721", "para_722", "para_723", "para_724", "para_725", "para_726" ] }, { "title": "In conclusion, the second factor weighs slightly in favor of", "paragraphs": [ "para_728" ] }, { "title": "Evaluating these factors together, and in light of copyright’s", "paragraphs": [ "para_730", "para_731" ] }, { "title": "28", "paragraphs": [ "para_733", "para_734", "para_735", "para_736" ] }, { "title": "Because Thomson Reuters’s 2,243 headnotes are original", "paragraphs": [ "para_738", "para_739" ] }, { "title": "29", "paragraphs": [] }, { "title": "Counsel for Appellant", "paragraphs": [] }, { "title": "Ji Won Oh", "paragraphs": [] }, { "title": "Kufere Laing", "paragraphs": [] }, { "title": "Mark S. Davies [Argued]", "paragraphs": [] }, { "title": "Andrew M. Legolvan", "paragraphs": [] }, { "title": "Yar R. Chaikovsky", "paragraphs": [] }, { "title": "WHITE & CASE", "paragraphs": [] }, { "title": "Kayvan M. Ghaffari", "paragraphs": [] }, { "title": "Anne M. Voigts", "paragraphs": [] }, { "title": "Ranjini Acharya", "paragraphs": [] }, { "title": "PILLSBURY WINTHROP SHAW PITTMAN", "paragraphs": [] }, { "title": "Anna Naydonov", "paragraphs": [] }, { "title": "CLEARY GOTTLIEB STEEN & HAMILTON", "paragraphs": [] }, { "title": "Counsel for Appellees", "paragraphs": [] }, { "title": "Dale M. Cendali [Argued]", "paragraphs": [] }, { "title": "Joshua L. Simmons", "paragraphs": [] }, { "title": "Miranda D. Means", "paragraphs": [] }, { "title": "KIRKLAND & ELLIS", "paragraphs": [] }, { "title": "Counsel for Amici Appellant", "paragraphs": [] }, { "title": "Heather J. Meeker", "paragraphs": [] }, { "title": "TECHNOLOGY LAW PARTNERS", "paragraphs": [] }, { "title": "30", "paragraphs": [] }, { "title": "Victoria J. Noble", "paragraphs": [] }, { "title": "ELECTRONIC FRONTIER FOUNDATION", "paragraphs": [] }, { "title": "Rebecca L. Tushnet", "paragraphs": [] }, { "title": "HARVARD LAW SCHOOL", "paragraphs": [] }, { "title": "Karen E. Keller", "paragraphs": [] }, { "title": "SHAW KELLER", "paragraphs": [] }, { "title": "Tim R. Hwang", "paragraphs": [] }, { "title": "HWANG INDUSTRIES", "paragraphs": [] }, { "title": "Abraham J. Kang", "paragraphs": [] }, { "title": "LAW OFFICE OF ABRAHAM KANG", "paragraphs": [] }, { "title": "Michael P. Abate", "paragraphs": [] }, { "title": "KAPLAN JOHNSON ABATE & BIRD", "paragraphs": [] }, { "title": "Michael T. Hensley", "paragraphs": [] }, { "title": "CARLTON FIELDS", "paragraphs": [] }, { "title": "Michael S. Kwun", "paragraphs": [] }, { "title": "KWUN BHANASALI LAZARUS", "paragraphs": [] }, { "title": "August Gebhard-Koenigstein", "paragraphs": [] }, { "title": "Phillip R. Mallone", "paragraphs": [] }, { "title": "STANFORD LAW SCHOOL INTELLECTUAL PROPERTY AND", "paragraphs": [] }, { "title": "INNOVATION CLINIC, MILLS LEGAL CLINIC", "paragraphs": [] }, { "title": "31", "paragraphs": [] }, { "title": "Counsel for Amici Appellees", "paragraphs": [] }, { "title": "Lawrence J. Spiwak", "paragraphs": [] }, { "title": "PHOENIX CENTER FOR ADVANCED LEGAL & ECONOMIC", "paragraphs": [] }, { "title": "PUBLIC POLICY STUDIES", "paragraphs": [] }, { "title": "Lucy Grace D. Noyola", "paragraphs": [] }, { "title": "ASSOCIATION OF AMERICAN PUBLISHERS", "paragraphs": [] }, { "title": "J. Kevin Fee", "paragraphs": [] }, { "title": "Jane Wise", "paragraphs": [] }, { "title": "Stanley Panikowski", "paragraphs": [] }, { "title": "DLA PIPER", "paragraphs": [] }, { "title": "Jacqueline Charlesworth", "paragraphs": [] }, { "title": "BAYLA LAW GROUP", "paragraphs": [] }, { "title": "Nicholas M. Medellin", "paragraphs": [] }, { "title": "EISNER", "paragraphs": [] }, { "title": "Regan A. Smith", "paragraphs": [] }, { "title": "NEWS MEDIA ALLIANCE", "paragraphs": [] }, { "title": "Nancy E. Wolff", "paragraphs": [] }, { "title": "COWAN DEBAETS ABRAHAMS & SHEPPARD", "paragraphs": [] }, { "title": "Michael D. Hobbs", "paragraphs": [] }, { "title": "Austin D. Padgett", "paragraphs": [] }, { "title": "Brooke R. Watson", "paragraphs": [] }, { "title": "32", "paragraphs": [] }, { "title": "TROUTMAN PEPPER LOCKE", "paragraphs": [] }, { "title": "Irina Tarsis", "paragraphs": [] }, { "title": "CENTER FOR ART LAW", "paragraphs": [] }, { "title": "Tod H. Cohen", "paragraphs": [] }, { "title": "AI COALITION FOR DATA INTEGRITY", "paragraphs": [] }, { "title": "Jonathan Iwry", "paragraphs": [] }, { "title": "Jonathan Z. King", "paragraphs": [] }, { "title": "COWAN LIEBOWITZ & LATMAN", "paragraphs": [] }, { "title": "Felicity Kohn", "paragraphs": [] }, { "title": "PRYOR CASHMAN", "paragraphs": [] }, { "title": "Adam G. Unikowsky", "paragraphs": [] }, { "title": "JENNER & BLOCK", "paragraphs": [] } ], "paragraphs": [ { "text": "UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT", "paragraph_id": "para_1" }, { "text": "No. 25-2153", "paragraph_id": "para_2" }, { "text": "THOMSON REUTERS ENTERPRISE CENTRE GMBH;", "paragraph_id": "para_3" }, { "text": "WEST PUBLISHING CORP", "paragraph_id": "para_4" }, { "text": "v.", "paragraph_id": "para_5" }, { "text": "ROSS INTELLIGENCE INC,", "paragraph_id": "para_6" }, { "text": "Appellant", "paragraph_id": "para_7" }, { "text": "_____________________________", "paragraph_id": "para_8" }, { "text": "On Appeal from the U.S. District Court, D. Del.", "paragraph_id": "para_9" }, { "text": "Judge Stephanos Bibas,* No. 1:20-cv-00613", "paragraph_id": "para_10" }, { "text": "Before: RESTREPO, MONTGOMERY-REEVES, and BOVE,", "paragraph_id": "para_11" }, { "text": "Circuit Judges", "paragraph_id": "para_12" }, { "text": "Argued: June 11, 2026; Filed: Sept. 29, 2026", "paragraph_id": "para_13" }, { "text": "_____________________________", "paragraph_id": "para_14" }, { "text": "OPINION OF THE COURT", "paragraph_id": "para_15" }, { "text": "MONTGOMERY-REEVES, Circuit Judge.", "paragraph_id": "para_16" }, { "text": "Artificial intelligence (“AI”) is a powerful machine learn-", "paragraph_id": "para_17" }, { "text": "ing technology that is poised to impact many facets of Ameri-", "paragraph_id": "para_18" }, { "text": "can life, including how we work, how we make art, and, criti-", "paragraph_id": "para_19" }, { "text": "cally for this case, how we study the law. In this case, the", "paragraph_id": "para_20" }, { "text": "* The Honorable Stephanos Bibas, Circuit Judge sitting by des-", "paragraph_id": "para_21" }, { "text": "ignation pursuant to 28 U.S.C. § 291(b).", "paragraph_id": "para_22" }, { "text": "2", "paragraph_id": "para_23" }, { "text": "veteran creator of a legal staple, Thomson Reuters Enterprise", "paragraph_id": "para_24" }, { "text": "Center GmbH (“Thomson Reuters”), charges a new competitor", "paragraph_id": "para_25" }, { "text": "with copying its editorial materials to train an AI platform. The", "paragraph_id": "para_26" }, { "text": "newcomer, ROSS Intelligence, Inc. (“ROSS”), counters that", "paragraph_id": "para_27" }, { "text": "Thomson Reuters seeks to squelch innovative AI technology.", "paragraph_id": "para_28" }, { "text": "But new technology is often at the forefront of our copyright", "paragraph_id": "para_29" }, { "text": "cases. And when it is, we regularly apply “the principles un-", "paragraph_id": "para_30" }, { "text": "derlying our venerable copyright laws.” Whelan Assocs., Inc.", "paragraph_id": "para_31" }, { "text": "v. Jaslow Dental Lab’y , Inc., 797 F.2d 1222, 1224 (3d Cir.", "paragraph_id": "para_32" }, { "text": "1986). Stripped to its essence, this interlocutory appeal asks us", "paragraph_id": "para_33" }, { "text": "to do just that.", "paragraph_id": "para_34" }, { "text": "Under ROSS’s framing, this case appears to concern the", "paragraph_id": "para_35" }, { "text": "future of AI legal technology. But appearances can be deceiv-", "paragraph_id": "para_36" }, { "text": "ing. In truth, this is no more than an ordinary copyright case;", "paragraph_id": "para_37" }, { "text": "we must determine whether Thomson Reuters’s materials are", "paragraph_id": "para_38" }, { "text": "sufficiently original for copyright protection and whether", "paragraph_id": "para_39" }, { "text": "ROSS’s use of those materials was fair. The undisputed evi-", "paragraph_id": "para_40" }, { "text": "dence reflects that Thomson Reuters’s materials possess a cre-", "paragraph_id": "para_41" }, { "text": "ative spark, and ROSS aspired to be a direct competitor by us-", "paragraph_id": "para_42" }, { "text": "ing them for a highly similar purpose. We therefore hold that", "paragraph_id": "para_43" }, { "text": "Thomson Reuters’s materials are copyrightable and that", "paragraph_id": "para_44" }, { "text": "ROSS’s use was not fair. Thus, we will affirm the District", "paragraph_id": "para_45" }, { "text": "Court’s order granting Thomson Reuters partial summary", "paragraph_id": "para_46" }, { "text": "judgment.", "paragraph_id": "para_47" }, { "text": "I. FACTS & PROCEDURAL HISTORY", "paragraph_id": "para_48" }, { "text": "This story begins with our country’s founding. As the", "paragraph_id": "para_49" }, { "text": "United States took its first steps as an independent nation, it", "paragraph_id": "para_50" }, { "text": "3", "paragraph_id": "para_51" }, { "text": "began developing its own common law. In these early days,", "paragraph_id": "para_52" }, { "text": "there were few official reporters publishing this developing", "paragraph_id": "para_53" }, { "text": "corpus of American case law. Private commercial publishers", "paragraph_id": "para_54" }, { "text": "sought to fill this void, and case reporters proliferated. One", "paragraph_id": "para_55" }, { "text": "such publisher was West Publishing Corporation, which exists", "paragraph_id": "para_56" }, { "text": "today as part of Thomson Reuters.", "paragraph_id": "para_57" }, { "text": "Later, Thomson Reuters created Westlaw, an online legal-", "paragraph_id": "para_58" }, { "text": "research platform that collects, organizes, annotates, and pub-", "paragraph_id": "para_59" }, { "text": "lishes legal content such as judicial opinions. Westlaw organ-", "paragraph_id": "para_60" }, { "text": "izes judicial opinions using its topic and Key Number System,", "paragraph_id": "para_61" }, { "text": "which indexes opinions based on the legal topics addressed", "paragraph_id": "para_62" }, { "text": "therein. These topics are connected to and expressed in head-", "paragraph_id": "para_63" }, { "text": "notes. Headnotes are annotations on opinions that explain", "paragraph_id": "para_64" }, { "text": "“what the law is in the abstract or the result which it compels", "paragraph_id": "para_65" }, { "text": "on the facts of the case.” Appendix (hereinafter App. __”)", "paragraph_id": "para_66" }, { "text": "6510. In Westlaw’s user interface, the headnotes sit above the", "paragraph_id": "para_67" }, { "text": "opinion, and clicking on a headnote takes the Westlaw user to", "paragraph_id": "para_68" }, { "text": "the corresponding passage of the opinion upon which the head-", "paragraph_id": "para_69" }, { "text": "note is based. Headnotes reflect a point of law made in the", "paragraph_id": "para_70" }, { "text": "judicial opinion and are “distinguished from statements of fact", "paragraph_id": "para_71" }, { "text": "and from [statements explaining the] reasoning [supporting the", "paragraph_id": "para_72" }, { "text": "point of law].” App. 6510.", "paragraph_id": "para_73" }, { "text": "When drafting headnotes, Thomson Reuters’s editors must", "paragraph_id": "para_74" }, { "text": "follow precise guidelines. They must make each headnote", "paragraph_id": "para_75" }, { "text": "clear and concise, including only the essential facts for the le-", "paragraph_id": "para_76" }, { "text": "gal contention or holding at issue. They are directed to limit", "paragraph_id": "para_77" }, { "text": "each headnote to 800 characters, where possible. Headnotes", "paragraph_id": "para_78" }, { "text": "4", "paragraph_id": "para_79" }, { "text": "are meant to convey to a reader the “most important points” in", "paragraph_id": "para_80" }, { "text": "an opinion. App. 8219. Accurate description of the law is par-", "paragraph_id": "para_81" }, { "text": "amount for headnotes, so the editors “[g]enerally . . . follow the", "paragraph_id": "para_82" }, { "text": "court’s language . . . [but] each headnote must have enough", "paragraph_id": "para_83" }, { "text": "context to stand on its own, and make sense to a reader who", "paragraph_id": "para_84" }, { "text": "doesn’t have the opinion.” App. 8233.", "paragraph_id": "para_85" }, { "text": "Thomson Reuters owns a registered copyright in Westlaw", "paragraph_id": "para_86" }, { "text": "and its content, including the Key Number System, headnotes,", "paragraph_id": "para_87" }, { "text": "and synopses at the beginning of opinions. Thomson Reuters", "paragraph_id": "para_88" }, { "text": "disclaims any copyright in “any part of the original work pre-", "paragraph_id": "para_89" }, { "text": "pared by a United States Government officer or employee as", "paragraph_id": "para_90" }, { "text": "part of that person’s official duties,” such as the opinions un-", "paragraph_id": "para_91" }, { "text": "derlying the headnotes. App. 176. Thomson Reuters also used", "paragraph_id": "para_92" }, { "text": "its headnotes to train other Westlaw products like WestSearch", "paragraph_id": "para_93" }, { "text": "Plus, an AI powered search function.", "paragraph_id": "para_94" }, { "text": "But Westlaw has competitors in the legal-research industry,", "paragraph_id": "para_95" }, { "text": "including ROSS. ROSS was founded by three University of", "paragraph_id": "para_96" }, { "text": "Toronto computer science students who entered an IBM com-", "paragraph_id": "para_97" }, { "text": "petition, in which competing teams used IBM’s Watson com-", "paragraph_id": "para_98" }, { "text": "puter to solve a data-related problem in the team’s chosen in-", "paragraph_id": "para_99" }, { "text": "dustry. The trio’s idea was to use Watson to train a computer", "paragraph_id": "para_100" }, { "text": "program to answer legal research questions without using tra-", "paragraph_id": "para_101" }, { "text": "ditional Boolean or keyword searches. After this competition,", "paragraph_id": "para_102" }, { "text": "5", "paragraph_id": "para_103" }, { "text": "the students founded ROSS to expand their idea and build an", "paragraph_id": "para_104" }, { "text": "AI legal-research platform.1", "paragraph_id": "para_105" }, { "text": "ROSS then created an AI legal search engine that would", "paragraph_id": "para_106" }, { "text": "respond to plain-language legal questions with relevant pas-", "paragraph_id": "para_107" }, { "text": "sages of text from judicial opinions. ROSS had access to a", "paragraph_id": "para_108" }, { "text": "bank of approximately ten million uncopyrighted judicial opin-", "paragraph_id": "para_109" }, { "text": "ions from which it could respond with an excerpt relevant to a", "paragraph_id": "para_110" }, { "text": "user’s query. ROSS’s AI was not a generative AI, meaning it", "paragraph_id": "para_111" }, { "text": "would not create any new expression; it would only return text", "paragraph_id": "para_112" }, { "text": "passages from preexisting judicial opinions.", "paragraph_id": "para_113" }, { "text": "For ROSS’s AI legal search engine to work, the AI program", "paragraph_id": "para_114" }, { "text": "had to learn what made a judicial opinion responsive to a user’s", "paragraph_id": "para_115" }, { "text": "legal question. To train its AI program to do so, ROSS enlisted", "paragraph_id": "para_116" }, { "text": "a company called LegalEase Solutions (“LegalEase”) to create", "paragraph_id": "para_117" }, { "text": "AI training memoranda. LegalEase wrote approximately", "paragraph_id": "para_118" }, { "text": "25,000 legal memos, each of which presented a legal question", "paragraph_id": "para_119" }, { "text": "and four to six judicial opinion passages in response. Memo-", "paragraph_id": "para_120" }, { "text": "drafters for LegalEase, and its subcontractor Morae Global,", "paragraph_id": "para_121" }, { "text": "used thousands of Westlaw headnotes to create the memos’", "paragraph_id": "para_122" }, { "text": "1 AI here refers to machine learning technology in which a soft-", "paragraph_id": "para_123" }, { "text": "ware program analyzes data to learn how to perform a task.", "paragraph_id": "para_124" }, { "text": "The program is given data which contains examples of inputs", "paragraph_id": "para_125" }, { "text": "paired with outputs. By analyzing enough data, the program", "paragraph_id": "para_126" }, { "text": "can improve its performance, effectively learning to recognize", "paragraph_id": "para_127" }, { "text": "patterns regarding which outputs are responsive to which in-", "paragraph_id": "para_128" }, { "text": "puts.", "paragraph_id": "para_129" }, { "text": "6", "paragraph_id": "para_130" }, { "text": "legal questions, as the headnotes provided “an easy way [to]", "paragraph_id": "para_131" }, { "text": "fram[e] questions.” App. 8545. The memos’ responses to the", "paragraph_id": "para_132" }, { "text": "legal questions needed to include at least one great, good, top-", "paragraph_id": "para_133" }, { "text": "ical, and irrelevant judicial opinion passage, labeled as such.", "paragraph_id": "para_134" }, { "text": "A great passage was completely responsive; a good passage", "paragraph_id": "para_135" }, { "text": "was mostly responsive; a topical passage was somewhat re-", "paragraph_id": "para_136" }, { "text": "sponsive; and an irrelevant passage was not responsive. The", "paragraph_id": "para_137" }, { "text": "“[g]reat” passages were “[m]ost frequently” the judicial opin-", "paragraph_id": "para_138" }, { "text": "ion passages that Westlaw linked to the headnote that ROSS", "paragraph_id": "para_139" }, { "text": "used as the memo’s legal question.2 App. 4837–39. These", "paragraph_id": "para_140" }, { "text": "memos were then converted into a machine-readable format", "paragraph_id": "para_141" }, { "text": "and used to train the ROSS AI program to identify patterns re-", "paragraph_id": "para_142" }, { "text": "garding which judicial opinion passages respond well to legal", "paragraph_id": "para_143" }, { "text": "questions.", "paragraph_id": "para_144" }, { "text": "ROSS did not hide its intention that this for-profit AI plat-", "paragraph_id": "para_145" }, { "text": "form compete with Westlaw. ROSS ran ads directly compar-", "paragraph_id": "para_146" }, { "text": "ing its platform to Westlaw at prices “in line with” Westlaw.", "paragraph_id": "para_147" }, { "text": "App. 4519. ROSS executives hoped ROSS would serve as a", "paragraph_id": "para_148" }, { "text": "substitute for Westlaw, and some law firms switched from us-", "paragraph_id": "para_149" }, { "text": "ing Westlaw to ROSS.", "paragraph_id": "para_150" }, { "text": "Upon learning of ROSS’s actions, Thomson Reuters sued", "paragraph_id": "para_151" }, { "text": "ROSS, alleging copyright infringement and tortious", "paragraph_id": "para_152" }, { "text": "2 For purposes of this appeal, ROSS is not challenging (1) that", "paragraph_id": "para_153" }, { "text": "LegalEase and Morae Global’s actions are attributable to", "paragraph_id": "para_154" }, { "text": "ROSS and (2) that LegalEase and Morae Global copied", "paragraph_id": "para_155" }, { "text": "Westlaw headnotes.", "paragraph_id": "para_156" }, { "text": "7", "paragraph_id": "para_157" }, { "text": "interference with contract. The District Court ultimately", "paragraph_id": "para_158" }, { "text": "granted partial summary judgment for Thomson Reuters, hold-", "paragraph_id": "para_159" }, { "text": "ing as a matter of law that ROSS’s use of 2,243 Westlaw head-", "paragraph_id": "para_160" }, { "text": "notes3 infringed Thomson Reuters’s copyright and was not fair", "paragraph_id": "para_161" }, { "text": "use. Then, at the parties’ request, the District Court certified", "paragraph_id": "para_162" }, { "text": "for interlocutory review “(1) whether the West headnotes and", "paragraph_id": "para_163" }, { "text": "the West Key Number System[4] are original as a matter of law", "paragraph_id": "para_164" }, { "text": "and (2) whether ROSS’s alleged use of the headnotes was fair", "paragraph_id": "para_165" }, { "text": "use.” App. 61.", "paragraph_id": "para_166" }, { "text": "II. JURISDICTION AND STANDARD OF REVIEW", "paragraph_id": "para_167" }, { "text": "The District Court had jurisdiction under 28 U.S.C. §§", "paragraph_id": "para_168" }, { "text": "1331, 1338. We have jurisdiction to hear this interlocutory ap-", "paragraph_id": "para_169" }, { "text": "peal under 28 U.S.C. § 1292(b). We are “generally constrained", "paragraph_id": "para_170" }, { "text": "3 An expert for ROSS stated that the memo questions corre-", "paragraph_id": "para_171" }, { "text": "sponding to a batch of 2,830 headnotes closely resembled the", "paragraph_id": "para_172" }, { "text": "headnote text but differed significantly from the underlying ju-", "paragraph_id": "para_173" }, { "text": "dicial opinions’ text. The District Court scrutinized this batch,", "paragraph_id": "para_174" }, { "text": "comparing the headnotes to the memo questions and the opin-", "paragraph_id": "para_175" }, { "text": "ions. The District Court concluded that for 2,243 headnotes,", "paragraph_id": "para_176" }, { "text": "the memo questions were so similar to the headnote text but so", "paragraph_id": "para_177" }, { "text": "dissimilar to the opinion text that no reasonable juror could", "paragraph_id": "para_178" }, { "text": "conclude these headnotes were not copied.", "paragraph_id": "para_179" }, { "text": "4 ROSS never challenged the originality of the Key Number", "paragraph_id": "para_180" }, { "text": "System in any of its briefing, despite its inclusion in the certi-", "paragraph_id": "para_181" }, { "text": "fied questions. We do not address that forfeited issue.", "paragraph_id": "para_182" }, { "text": "8", "paragraph_id": "para_183" }, { "text": "to the questions certified for review” in an interlocutory appeal,", "paragraph_id": "para_184" }, { "text": "but we “may consider any grounds justifying reversal.” Ellis", "paragraph_id": "para_185" }, { "text": "v. Westinghouse Elec. Co., 11 F.4th 221, 229 (3d Cir. 2021)", "paragraph_id": "para_186" }, { "text": "(quoting Morris v. Hoffa, 361 F.3d 177, 196 (3d Cir. 2004)).", "paragraph_id": "para_187" }, { "text": "We review a grant of summary judgment de novo. TD Bank", "paragraph_id": "para_188" }, { "text": "N.A. v. Hill, 928 F.3d 259, 270 (3d Cir. 2019). Summary judg-", "paragraph_id": "para_189" }, { "text": "ment is appropriate when “there is no genuine dispute as to any", "paragraph_id": "para_190" }, { "text": "material fact and the movant is entitled to judgment as a matter", "paragraph_id": "para_191" }, { "text": "of law.” Fed. R. Civ. P. 56(a). “We view the facts in the light", "paragraph_id": "para_192" }, { "text": "most favorable to the non-moving party and draw all reasona-", "paragraph_id": "para_193" }, { "text": "ble inferences in that party’s favor.” Tundo v. Cnty. of Passaic,", "paragraph_id": "para_194" }, { "text": "923 F.3d 283, 287 (3d Cir. 2019) (citation modified).", "paragraph_id": "para_195" }, { "text": "III. ANALYSIS", "paragraph_id": "para_196" }, { "text": "Our Constitution empowers Congress “to promote the pro-", "paragraph_id": "para_197" }, { "text": "gress of science and useful arts, by securing for limited times", "paragraph_id": "para_198" }, { "text": "to authors and inventors the exclusive right to their respective", "paragraph_id": "para_199" }, { "text": "writings and discoveries.” U.S. Const., Art. 1, § 8, cl. 8 (cita-", "paragraph_id": "para_200" }, { "text": "tion modified). Congress promotes the progress of science and", "paragraph_id": "para_201" }, { "text": "arts through the Copyright Act, 17 U.S.C. § 101 et seq., which", "paragraph_id": "para_202" }, { "text": "“encourage[s] creativity by granting to the author of an original", "paragraph_id": "para_203" }, { "text": "work ‘a bundle of exclusive rights,’” like the rights to “repro-", "paragraph_id": "para_204" }, { "text": "duce” a copyrighted work and “prepare derivative works.”", "paragraph_id": "para_205" }, { "text": "Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598", "paragraph_id": "para_206" }, { "text": "U.S. 508, 526 (2023) (quoting Harper & Row, Publishers, Inc.", "paragraph_id": "para_207" }, { "text": "v. Nation Enters., 471 U.S. 539, 546 (1985)).", "paragraph_id": "para_208" }, { "text": "9", "paragraph_id": "para_209" }, { "text": "But the Copyright Act does not focus solely on encouraging", "paragraph_id": "para_210" }, { "text": "creativity. It also promotes the availability of creative works.", "paragraph_id": "para_211" }, { "text": "Stated differently, it “reflects a balance of competing claims", "paragraph_id": "para_212" }, { "text": "upon the public interest: Creative work is to be encouraged and", "paragraph_id": "para_213" }, { "text": "rewarded, but private motivation must ultimately serve the", "paragraph_id": "para_214" }, { "text": "cause of promoting broad public availability of” creative", "paragraph_id": "para_215" }, { "text": "works. Id. (quoting Twentieth Century Music Corp. v. Aiken,", "paragraph_id": "para_216" }, { "text": "422 U.S. 151, 156 (1975)). That “balancing act between crea-", "paragraph_id": "para_217" }, { "text": "tivity and availability (including for use in new works)” is re-", "paragraph_id": "para_218" }, { "text": "flected, in part, in the “fair use” defense, a common-law doc-", "paragraph_id": "para_219" }, { "text": "trine codified at 17 U.S.C. § 107. Id. at 526–27.", "paragraph_id": "para_220" }, { "text": "To establish a claim of copyright infringement, one must", "paragraph_id": "para_221" }, { "text": "demonstrate “ownership of a valid copyright and copying of", "paragraph_id": "para_222" }, { "text": "original elements of the plaintiff's work.” Am. Soc'y for Test-", "paragraph_id": "para_223" }, { "text": "ing & Materials v. UpCodes, Inc., 172 F.4th 253, 261 (3d Cir.", "paragraph_id": "para_224" }, { "text": "2026) (citing Whelan Assocs., 797 F.2d at 1231). But one can", "paragraph_id": "para_225" }, { "text": "have a copyright only in “original works of authorship.” 17", "paragraph_id": "para_226" }, { "text": "U.S.C. § 102(a). Even if these elements are satisfied, the “fair", "paragraph_id": "para_227" }, { "text": "use” of a work’s original elements “for purposes such as criti-", "paragraph_id": "para_228" }, { "text": "cism, comment, news reporting, teaching . . ., scholarship, or", "paragraph_id": "para_229" }, { "text": "research, is not an infringement of copyright.” Id. § 107. This", "paragraph_id": "para_230" }, { "text": "case turns on the originality requirement and ROSS’s fair use", "paragraph_id": "para_231" }, { "text": "defense. We first consider whether Thomson Reuters’s head-", "paragraph_id": "para_232" }, { "text": "notes were original, and then whether ROSS’s copying them", "paragraph_id": "para_233" }, { "text": "into AI training memos for its legal-research platform was a", "paragraph_id": "para_234" }, { "text": "fair use.", "paragraph_id": "para_235" }, { "text": "10", "paragraph_id": "para_236" }, { "text": "A. Originality5", "paragraph_id": "para_237" }, { "text": "We begin with originality. “Copyright protection sub-", "paragraph_id": "para_238" }, { "text": "sists . . . in original works of authorship.” 17 U.S.C. § 102(a).", "paragraph_id": "para_239" }, { "text": "This is an “extremely low” bar, as works need only be “inde-", "paragraph_id": "para_240" }, { "text": "pendently created” with a “modicum of creativity” for copy-", "paragraph_id": "para_241" }, { "text": "right protection; such creativity is present when a work “pos-", "paragraph_id": "para_242" }, { "text": "sess[es] some creative spark.” Feist Publ’ns, Inc. v. Rural Tel.", "paragraph_id": "para_243" }, { "text": "Serv. Co., 499 U.S. 340, 345–46 (1991). Although “the vast", "paragraph_id": "para_244" }, { "text": "majority of [works] will pass this test,” “[t]here remains a nar-", "paragraph_id": "para_245" }, { "text": "row category of works in which the creative spark is utterly", "paragraph_id": "para_246" }, { "text": "lacking or so trivial as to be virtually nonexistent.” Id. at 359", "paragraph_id": "para_247" }, { "text": "(holding that the alphabetical arrangement of a phonebook", "paragraph_id": "para_248" }, { "text": "does not possess the requisite “creative spark”).", "paragraph_id": "para_249" }, { "text": "All 2,243 independently created headnotes at issue in this", "paragraph_id": "para_250" }, { "text": "appeal have “some creative spark.” Id. at 345. For each head-", "paragraph_id": "para_251" }, { "text": "note, Thomson Reuters’s editors made creative decisions about", "paragraph_id": "para_252" }, { "text": "which points of law were important enough to include in a", "paragraph_id": "para_253" }, { "text": "headnote and how to word those points of law consistent with", "paragraph_id": "para_254" }, { "text": "Westlaw’s drafting criteria. Each headnote had to convey", "paragraph_id": "para_255" }, { "text": "enough factual background and reasoning to stand on its own", "paragraph_id": "para_256" }, { "text": "5 The District Court mused that even headnotes that quoted ju-", "paragraph_id": "para_257" }, { "text": "dicial opinions verbatim may be original enough for copyright", "paragraph_id": "para_258" }, { "text": "protection. While this dictum raises an interesting question,", "paragraph_id": "para_259" }, { "text": "we do not answer it here as the District Court only granted", "paragraph_id": "para_260" }, { "text": "summary judgment as to 2,243 headnotes that do not copy", "paragraph_id": "para_261" }, { "text": "opinion text verbatim.", "paragraph_id": "para_262" }, { "text": "11", "paragraph_id": "para_263" }, { "text": "without reference to the opinion or any other headnote, while", "paragraph_id": "para_264" }, { "text": "accurately reflecting the corresponding opinion passage. Be-", "paragraph_id": "para_265" }, { "text": "cause these decisions show the requisite minimal “creative", "paragraph_id": "para_266" }, { "text": "spark,” the headnotes are original. Id.", "paragraph_id": "para_267" }, { "text": "Supreme Court authority supports this conclusion. Indeed,", "paragraph_id": "para_268" }, { "text": "the Supreme Court has suggested that headnotes prepared by", "paragraph_id": "para_269" }, { "text": "private case reporters like Thomson Reuters are copyrightable.", "paragraph_id": "para_270" }, { "text": "In Callaghan v. Myers, 128 U.S. 617 (1888), the Court held", "paragraph_id": "para_271" }, { "text": "that works produced by judges in their official capacity were", "paragraph_id": "para_272" }, { "text": "not copyrightable, but a reporter may obtain “a copyright for", "paragraph_id": "para_273" }, { "text": "the volume which will cover the matter which is the result of", "paragraph_id": "para_274" }, { "text": "his intellectual labor” such as “head-notes.” Id. at 647–49.", "paragraph_id": "para_275" }, { "text": "Over a century later, the Court applied this principle to work", "paragraph_id": "para_276" }, { "text": "produced by legislators in their legislative capacity, noting that", "paragraph_id": "para_277" }, { "text": "Callaghan “upheld the reporter’s copyright interest in several", "paragraph_id": "para_278" }, { "text": "explanatory materials that the reporter had created himself:", "paragraph_id": "para_279" }, { "text": "headnotes, syllabi, tables of contents, and the like” so long as", "paragraph_id": "para_280" }, { "text": "“they came from an author who had no authority to speak with", "paragraph_id": "para_281" }, { "text": "the force of law.” Georgia v. Public.Resource.Org, Inc., 590", "paragraph_id": "para_282" }, { "text": "U.S. 255, 265 (2020) (emphasis added).", "paragraph_id": "para_283" }, { "text": "ROSS offers three counters. First, ROSS argues that rec-", "paragraph_id": "para_284" }, { "text": "ognizing Thomson Reuters’s copyright in its headnotes “would", "paragraph_id": "para_285" }, { "text": "effectively give [Thomson Reuters] a monopoly over the law.”", "paragraph_id": "para_286" }, { "text": "Opening Br. 22. Not so. Headnotes are not law; judicial opin-", "paragraph_id": "para_287" }, { "text": "ions are. And judicial opinions remain “free for publication to", "paragraph_id": "para_288" }, { "text": "all.” Banks v. Manchester, 128 U.S. 244, 253 (1888).", "paragraph_id": "para_289" }, { "text": "12", "paragraph_id": "para_290" }, { "text": "Second, ROSS argues the headnotes are not copyrightable", "paragraph_id": "para_291" }, { "text": "under the merger doctrine. This doctrine precludes copyright", "paragraph_id": "para_292" }, { "text": "in the “rare” case where “a work’s underlying idea can effec-", "paragraph_id": "para_293" }, { "text": "tively be expressed in only one” or a “few . . . ways” such that", "paragraph_id": "para_294" }, { "text": "“copyrighting a design feature would effectively monopolize", "paragraph_id": "para_295" }, { "text": "an underlying idea.” Silvertop Assocs. Inc. v. Kangaroo Mfg.", "paragraph_id": "para_296" }, { "text": "Inc., 931 F.3d 215, 222 (3d Cir. 2019) (quoting Educ. Testing", "paragraph_id": "para_297" }, { "text": "Servs. v. Katzman, 793 F.2d 533, 539 (3d Cir. 1986)). But the", "paragraph_id": "para_298" }, { "text": "merger doctrine does not apply when there “are many other", "paragraph_id": "para_299" }, { "text": "ways to” convey a work’s underlying idea. Id. at 223. So, for", "paragraph_id": "para_300" }, { "text": "instance, we have said that the merger doctrine does not apply", "paragraph_id": "para_301" }, { "text": "to a “banana costume” due to the possibility of different cos-", "paragraph_id": "para_302" }, { "text": "tumes based on “shape, curvature, tips, tips’ color, overall", "paragraph_id": "para_303" }, { "text": "color, length, width, lining, texture, and material.” Id. And", "paragraph_id": "para_304" }, { "text": "just as a banana costume can take myriad designs, so too can", "paragraph_id": "para_305" }, { "text": "headnotes have differing expressions. Indeed, copyrighting the", "paragraph_id": "para_306" }, { "text": "headnotes does not effectively monopolize judicial opinions", "paragraph_id": "para_307" }, { "text": "because, as the District Court correctly noted, “there are many", "paragraph_id": "para_308" }, { "text": "ways to express points of law from judicial opinions.” App.", "paragraph_id": "para_309" }, { "text": "49; see, e.g., Amicus Br. for RELX, Inc. (hereinafter the “Lexis", "paragraph_id": "para_310" }, { "text": "Br. ___”) at 13–16. So the merger doctrine does not apply.", "paragraph_id": "para_311" }, { "text": "Third and finally, ROSS cites Matthew Bender & Co. v.", "paragraph_id": "para_312" }, { "text": "West Publishing Co., 158 F.3d 674 (2d Cir. 1998), to support", "paragraph_id": "para_313" }, { "text": "the conclusion that headnotes are insufficiently original for", "paragraph_id": "para_314" }, { "text": "copyright protection. But that out-of-circuit case does not sup-", "paragraph_id": "para_315" }, { "text": "port ROSS’s argument. The Second Circuit held that West", "paragraph_id": "para_316" }, { "text": "lacked a copyright in its arrangement of information like party", "paragraph_id": "para_317" }, { "text": "names and its addition of information like parallel citations", "paragraph_id": "para_318" }, { "text": "13", "paragraph_id": "para_319" }, { "text": "because that information was not sufficiently original. Id. at", "paragraph_id": "para_320" }, { "text": "677. Those materials lacked originality, according to the court,", "paragraph_id": "para_321" }, { "text": "because “industry conventions . . . dictate[d]” the selections", "paragraph_id": "para_322" }, { "text": "and because “creativity inheres in making non-obvious choices", "paragraph_id": "para_323" }, { "text": "from among more than a few options.” Id. at 682. In contrast,", "paragraph_id": "para_324" }, { "text": "the Second Circuit described headnotes as “independently", "paragraph_id": "para_325" }, { "text": "composed,” and it never suggested that industry standards dic-", "paragraph_id": "para_326" }, { "text": "tated headnote composition. Id. at 676. Indeed, such reasoning", "paragraph_id": "para_327" }, { "text": "would make little sense because Thomson Reuters’s editors", "paragraph_id": "para_328" }, { "text": "make independent judgments about which points of law to in-", "paragraph_id": "para_329" }, { "text": "clude and how to concisely write headnotes to stand alone", "paragraph_id": "para_330" }, { "text": "without reference to the underlying opinion.6 Cf. Southco, Inc.", "paragraph_id": "para_331" }, { "text": "v. Kanebridge Corp., 390 F.3d 276, 282 (3d Cir. 2004) (Alito,", "paragraph_id": "para_332" }, { "text": "J.) (finding unoriginal product serial numbers in which “each", "paragraph_id": "para_333" }, { "text": "number is rigidly dictated by . . . mechanical application of the", "paragraph_id": "para_334" }, { "text": "[numbering] system, not creative thought” (citation modi-", "paragraph_id": "para_335" }, { "text": "fied)). So the Second Circuit offers ROSS no refuge.", "paragraph_id": "para_336" }, { "text": "B. Fair Use", "paragraph_id": "para_337" }, { "text": "We turn next to ROSS’s purported fair-use defense. “[T]he", "paragraph_id": "para_338" }, { "text": "fair use of a copyrighted work . . . is not an infringement of", "paragraph_id": "para_339" }, { "text": "copyright.” 17 U.S.C. § 107. Fair use is an equitable doctrine", "paragraph_id": "para_340" }, { "text": "that “permits courts to avoid rigid application of the copyright", "paragraph_id": "para_341" }, { "text": "statute when, on occasion, it would stifle the very creativity", "paragraph_id": "para_342" }, { "text": "6 See Lexis Br. at 12 (explaining that Lexis, a Westlaw com-", "paragraph_id": "para_343" }, { "text": "petitor, employs a different creative process as it generates dif-", "paragraph_id": "para_344" }, { "text": "ferent headnotes for the same opinions).", "paragraph_id": "para_345" }, { "text": "14", "paragraph_id": "para_346" }, { "text": "which that law is designed to foster.” Andy Warhol, 598 U.S.", "paragraph_id": "para_347" }, { "text": "at 527 (quoting Steward v. Abend, 495 U.S. 207, 236 (1990)).", "paragraph_id": "para_348" }, { "text": "“Fair use is a mixed question of law and fact.” Harper & Row,", "paragraph_id": "para_349" }, { "text": "471 U.S. at 560. But where there are undisputed facts “suffi-", "paragraph_id": "para_350" }, { "text": "cient to evaluate each of the statutory factors,” the Court “may", "paragraph_id": "para_351" }, { "text": "conclude as a matter of law that the challenged use does not", "paragraph_id": "para_352" }, { "text": "qualify as a fair use.” Id. (citation modified).", "paragraph_id": "para_353" }, { "text": "In determining whether a use is fair, we must consider the", "paragraph_id": "para_354" }, { "text": "following statutory factors:", "paragraph_id": "para_355" }, { "text": "(1) the purpose and character of the use, including", "paragraph_id": "para_356" }, { "text": "whether such use is of a commercial nature or is for non-", "paragraph_id": "para_357" }, { "text": "profit educational purposes; (2) the nature of the copy-", "paragraph_id": "para_358" }, { "text": "righted work; (3) the amount and substantiality of the", "paragraph_id": "para_359" }, { "text": "portion used in relation to the copyrighted work as a", "paragraph_id": "para_360" }, { "text": "whole; and (4) the effect of the use upon the potential", "paragraph_id": "para_361" }, { "text": "market for or value of the copyrighted work.", "paragraph_id": "para_362" }, { "text": "17 U.S.C. § 107. As the proponent of this affirmative defense,", "paragraph_id": "para_363" }, { "text": "ROSS bears the burden of demonstrating its copying was jus-", "paragraph_id": "para_364" }, { "text": "tified. See Andy Warhol, 598 U.S. at 547 n.21; UpCodes, 172", "paragraph_id": "para_365" }, { "text": "F.4th at 261. We address each factor in turn.", "paragraph_id": "para_366" }, { "text": "1. Purpose and Character of the Use", "paragraph_id": "para_367" }, { "text": "The first factor examines the “purpose and character” of", "paragraph_id": "para_368" }, { "text": "ROSS’s use. 17 U.S.C. § 107(1); Andy Warhol, 598 U.S. at", "paragraph_id": "para_369" }, { "text": "15", "paragraph_id": "para_370" }, { "text": "532–33. To assess this factor, we first consider whether “a use", "paragraph_id": "para_371" }, { "text": "is commercial as opposed to nonprofit” because a commercial", "paragraph_id": "para_372" }, { "text": "use weighs against a finding of fair use. Andy Warhol, 598", "paragraph_id": "para_373" }, { "text": "U.S. at 531; see also UpCodes, 172 F.4th at 265 (“If a new", "paragraph_id": "para_374" }, { "text": "work is used commercially rather than for a nonprofit purpose,", "paragraph_id": "para_375" }, { "text": "its use will less likely qualify as fair.”). Next, we consider how", "paragraph_id": "para_376" }, { "text": "transformative the copier’s use is—that is, “whether the new", "paragraph_id": "para_377" }, { "text": "work merely supersedes the objects of the original crea-", "paragraph_id": "para_378" }, { "text": "tion . . . or instead adds something new, with a further purpose", "paragraph_id": "para_379" }, { "text": "or different character.” Andy Warhol, 598 U.S. at 528 (citation", "paragraph_id": "para_380" }, { "text": "modified) (quoting Campbell v. Acuff-Rose Music, Inc., 510", "paragraph_id": "para_381" }, { "text": "U.S. 569, 579 (1994)). The “lodestar” of this inquiry is", "paragraph_id": "para_382" }, { "text": "whether the copier maintains a “distinctive purpose” for its use.", "paragraph_id": "para_383" }, { "text": "4 Nimmer on Copyright § 13F.10[G][2][a][i] (2026); see also", "paragraph_id": "para_384" }, { "text": "Andy Warhol, 598 U.S. at 531 (“[A] use that has a distinct pur-", "paragraph_id": "para_385" }, { "text": "pose is justified because it furthers the goal of copyright,", "paragraph_id": "para_386" }, { "text": "namely, to promote the progress of science and the arts, with-", "paragraph_id": "para_387" }, { "text": "out diminishing the incentive to create.”). And, because un-", "paragraph_id": "para_388" }, { "text": "covering the differences between an originator’s and a copier’s", "paragraph_id": "para_389" }, { "text": "purposes is “a matter of degree,” we ask “whether and to what", "paragraph_id": "para_390" }, { "text": "extent the use at issue has a purpose or character different from", "paragraph_id": "para_391" }, { "text": "the original.” Andy Warhol, 598 U.S. at 528–29 (citation mod-", "paragraph_id": "para_392" }, { "text": "ified). “The larger the difference,” the Supreme Court has said,", "paragraph_id": "para_393" }, { "text": "“the more likely the first factor weighs in favor of fair use.” Id.", "paragraph_id": "para_394" }, { "text": "at 529.", "paragraph_id": "para_395" }, { "text": "In sum, we must balance “the degree of difference [in pur-", "paragraph_id": "para_396" }, { "text": "pose] . . . against the commercial nature of the use.” Id. at 532.", "paragraph_id": "para_397" }, { "text": "And if “an original work and a secondary use share the same", "paragraph_id": "para_398" }, { "text": "16", "paragraph_id": "para_399" }, { "text": "or highly similar purposes, and the secondary use is of a com-", "paragraph_id": "para_400" }, { "text": "mercial nature, the first factor is likely to weigh against fair", "paragraph_id": "para_401" }, { "text": "use, absent some other justification for copying.” Id. at 532–", "paragraph_id": "para_402" }, { "text": "33.", "paragraph_id": "para_403" }, { "text": "We start with whether ROSS’s use of Thomson Reuters’s", "paragraph_id": "para_404" }, { "text": "headnotes is commercial. ROSS aimed to create a legal-re-", "paragraph_id": "para_405" }, { "text": "search platform charging comparable prices to Westlaw to", "paragraph_id": "para_406" }, { "text": "compete with Westlaw for customers. So ROSS’s use is com-", "paragraph_id": "para_407" }, { "text": "mercial.", "paragraph_id": "para_408" }, { "text": "But because commercialism is not “dispositive” of fair use,", "paragraph_id": "para_409" }, { "text": "id. at 531, we must ask whether ROSS’s use of Thomson Reu-", "paragraph_id": "para_410" }, { "text": "ters’s headnotes is transformative—that is “whether and to", "paragraph_id": "para_411" }, { "text": "what extent” ROSS’s use of the headnotes “has a purpose or", "paragraph_id": "para_412" }, { "text": "character different from” Thomson Reuters’s use. Id. at 529", "paragraph_id": "para_413" }, { "text": "(emphasis in original) (quoting Campbell, 510 U.S. at 579).", "paragraph_id": "para_414" }, { "text": "Thomson Reuters uses its headnotes to help legal researchers", "paragraph_id": "para_415" }, { "text": "find and understand judicial opinions containing points of law", "paragraph_id": "para_416" }, { "text": "related to their searches. ROSS uses Thomson Reuters’s head-", "paragraph_id": "para_417" }, { "text": "notes to create a legal-research platform to help users find ju-", "paragraph_id": "para_418" }, { "text": "dicial opinion passages responsive to their searches. True,", "paragraph_id": "para_419" }, { "text": "ROSS did not use the headnotes in precisely the same fashion", "paragraph_id": "para_420" }, { "text": "as Thomson Reuters. ROSS took an intermediate step of using", "paragraph_id": "para_421" }, { "text": "the headnotes to train an AI program, which arguably presents", "paragraph_id": "para_422" }, { "text": "a slight degree of difference in use. But the undisputed evi-", "paragraph_id": "para_423" }, { "text": "dence demonstrates that ROSS used the headnotes to train an", "paragraph_id": "para_424" }, { "text": "AI program for the benefit of its legal-research platform. So", "paragraph_id": "para_425" }, { "text": "both Thomson Reuters and ROSS use the headnotes to create", "paragraph_id": "para_426" }, { "text": "17", "paragraph_id": "para_427" }, { "text": "and optimize a legal-research platform that helps users find re-", "paragraph_id": "para_428" }, { "text": "sponsive legal material. Thus, ROSS’s use of the headnotes", "paragraph_id": "para_429" }, { "text": "shares the same ultimate purpose as Thomson Reuters’s use,", "paragraph_id": "para_430" }, { "text": "making ROSS’s use minimally transformative, at best.7", "paragraph_id": "para_431" }, { "text": "7 We note that the United States Department of Justice (“DOJ”)", "paragraph_id": "para_432" }, { "text": "filed a statement of interest relating to generative AI in a pend-", "paragraph_id": "para_433" }, { "text": "ing case in the Southern District of New York. Statement of", "paragraph_id": "para_434" }, { "text": "Interest of the United States, In re: OpenAI, Inc. Copyright In-", "paragraph_id": "para_435" }, { "text": "fringement Litig., No. 1:25-md-3143 (S.D.N.Y. Sept. 1, 2026)", "paragraph_id": "para_436" }, { "text": "(hereinafter “DOJ Statement __”). The concerns raised in that", "paragraph_id": "para_437" }, { "text": "separate case do not apply here. The DOJ relied on Bartz v.", "paragraph_id": "para_438" }, { "text": "Anthropic PBC, 787 F. Supp. 3d 1007, 1014 (N.D. Cal. 2025)", "paragraph_id": "para_439" }, { "text": "to contend that training an AI large language model, which can", "paragraph_id": "para_440" }, { "text": "“generate original responses,” is a transformative use. DOJ", "paragraph_id": "para_441" }, { "text": "Statement at 10; see also Kadrey v. Meta Platforms, Inc., 788", "paragraph_id": "para_442" }, { "text": "F. Supp. 3d 1026, 1034 (N.D. Cal. 2025) (exploring whether", "paragraph_id": "para_443" }, { "text": "generative AI programs transformatively use training materi-", "paragraph_id": "para_444" }, { "text": "als). Unlike the AI models in Bartz and In re: OpenAI, ROSS’s", "paragraph_id": "para_445" }, { "text": "AI platform cannot generate original expression, and the evi-", "paragraph_id": "para_446" }, { "text": "dence here supports the opposite conclusion about transforma-", "paragraph_id": "para_447" }, { "text": "tiveness. The DOJ also argued that the large language model", "paragraph_id": "para_448" }, { "text": "training in OpenAI did not result in “substitutive competition.”", "paragraph_id": "para_449" }, { "text": "DOJ Statement at 13 (citation modified). Here, ROSS trained", "paragraph_id": "para_450" }, { "text": "its AI for the purpose of creating a commercial substitute for", "paragraph_id": "para_451" }, { "text": "Westlaw. In any event, the DOJ’s filing in In re: OpenAI", "paragraph_id": "para_452" }, { "text": "demonstrates that the DOJ is tracking these issues and knows", "paragraph_id": "para_453" }, { "text": "how to assert its interests, but the DOJ notably did not do so", "paragraph_id": "para_454" }, { "text": "here.", "paragraph_id": "para_455" }, { "text": "18", "paragraph_id": "para_456" }, { "text": "Given that ROSS’s use was highly commercial and mini-", "paragraph_id": "para_457" }, { "text": "mally transformative, we conclude that the first factor weighs", "paragraph_id": "para_458" }, { "text": "against fair use. Andy Warhol, 598 U.S. at 537–38 (“Taken", "paragraph_id": "para_459" }, { "text": "together, these two elements—that Goldsmith’s photograph", "paragraph_id": "para_460" }, { "text": "and AWF’s 2016 licensing of Orange Prince share substan-", "paragraph_id": "para_461" }, { "text": "tially the same purpose, and that AWF’s use of Goldsmith’s", "paragraph_id": "para_462" }, { "text": "photo was of a commercial nature—counsel against fair use . .", "paragraph_id": "para_463" }, { "text": ". .”); Fox News Network, LLC v. TVEyes, Inc., 883 F.3d 169,", "paragraph_id": "para_464" }, { "text": "178 (2d Cir. 2018) (reasoning that the “commercial nature of a", "paragraph_id": "para_465" }, { "text": "secondary use weighs against a finding of fair use . . . espe-", "paragraph_id": "para_466" }, { "text": "cially when . . . the transformative character of the secondary", "paragraph_id": "para_467" }, { "text": "use is modest”).", "paragraph_id": "para_468" }, { "text": "ROSS offers two arguments to support the opposite conclu-", "paragraph_id": "para_469" }, { "text": "sion. Neither convinces. First, ROSS argues that Authors", "paragraph_id": "para_470" }, { "text": "Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015), dictates a", "paragraph_id": "para_471" }, { "text": "different conclusion. There, the Second Circuit held that", "paragraph_id": "para_472" }, { "text": "Google’s scanning of entire books had the “highly transforma-", "paragraph_id": "para_473" }, { "text": "tive purpose” of creating a feature to search for and read small", "paragraph_id": "para_474" }, { "text": "snippets of books that matched their search terms. Id. at 216–", "paragraph_id": "para_475" }, { "text": "17; see also Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 97", "paragraph_id": "para_476" }, { "text": "(2d Cir. 2014) (holding similar use was fair where there was", "paragraph_id": "para_477" }, { "text": "no snippet feature and the use was noncommercial). Deciding", "paragraph_id": "para_478" }, { "text": "a dispute that “test[ed] the boundaries of fair use,” the court", "paragraph_id": "para_479" }, { "text": "held that the search feature served a completely different func-", "paragraph_id": "para_480" }, { "text": "tion that was highly transformative of the original work. Au-", "paragraph_id": "para_481" }, { "text": "thors Guild, 804 F.3d at 206, 216–17. The purpose of the orig-", "paragraph_id": "para_482" }, { "text": "inal books was to be read while the purpose of the search", "paragraph_id": "para_483" }, { "text": "19", "paragraph_id": "para_484" }, { "text": "function was to enable users to find “books containing a term", "paragraph_id": "para_485" }, { "text": "of interest to the searcher.” Id. at 216.", "paragraph_id": "para_486" }, { "text": "No such transformative purpose is present here. Instead,", "paragraph_id": "para_487" }, { "text": "ROSS’s platform uses Thomson Reuters’s headnotes to help", "paragraph_id": "para_488" }, { "text": "users find judicial opinions related to their legal research in-", "paragraph_id": "para_489" }, { "text": "quiries, something Thomson Reuters already does with its", "paragraph_id": "para_490" }, { "text": "headnotes. Also favoring fair use in Authors Guild was that", "paragraph_id": "para_491" }, { "text": "Google’s search feature may have driven users toward a book", "paragraph_id": "para_492" }, { "text": "the users would then purchase from the original author. Id. at", "paragraph_id": "para_493" }, { "text": "217–18. Not so here. ROSS’s use does not lead a user to", "paragraph_id": "para_494" }, { "text": "Westlaw; instead, as ROSS admits, it aims to replace Westlaw.", "paragraph_id": "para_495" }, { "text": "Second, ROSS argues that three “intermediate copying”", "paragraph_id": "para_496" }, { "text": "cases, one from the Supreme Court and two from the Ninth", "paragraph_id": "para_497" }, { "text": "Circuit, dictate a different conclusion. Opening Br. 44. In a", "paragraph_id": "para_498" }, { "text": "recent case, the Supreme Court held that Google could copy a", "paragraph_id": "para_499" }, { "text": "portion of Oracle’s Java computer programming language to", "paragraph_id": "para_500" }, { "text": "enable users to create applications using Java code on Android", "paragraph_id": "para_501" }, { "text": "phones. Google LLC v. Oracle Am., Inc., 593 U.S. 1, 6–7", "paragraph_id": "para_502" }, { "text": "(2021). The Ninth Circuit concluded similarly in earlier cases.", "paragraph_id": "para_503" }, { "text": "It held that a video game developer could copy Sega’s com-", "paragraph_id": "para_504" }, { "text": "puter program code to create video games that could be played", "paragraph_id": "para_505" }, { "text": "on Sega’s gaming system. Sega Enters. Ltd. v. Accolade, Inc.,", "paragraph_id": "para_506" }, { "text": "977 F.2d 1510, 1514 (9th Cir. 1992). Another panel similarly", "paragraph_id": "para_507" }, { "text": "held that Connectix could copy Sony’s computer program code", "paragraph_id": "para_508" }, { "text": "to create a product that made Sony video games playable on", "paragraph_id": "para_509" }, { "text": "personal computers. Sony Comput. Ent., Inc. v. Connectix", "paragraph_id": "para_510" }, { "text": "Corp., 203 F.3d 596, 599, 606–08 (9th Cir. 2000).", "paragraph_id": "para_511" }, { "text": "20", "paragraph_id": "para_512" }, { "text": "In each of these cases, computer code was copied to enable", "paragraph_id": "para_513" }, { "text": "users to make their software operable with an existing com-", "paragraph_id": "para_514" }, { "text": "puter system. These uses were transformative because, in each", "paragraph_id": "para_515" }, { "text": "case, copying was necessary to access the unprotected func-", "paragraph_id": "para_516" }, { "text": "tional aspects of computer code. See Oracle, 593 U.S. at 30–", "paragraph_id": "para_517" }, { "text": "31 (stating that Google copied Oracle API “only insofar as", "paragraph_id": "para_518" }, { "text": "needed” and explaining that “shared interfaces are necessary", "paragraph_id": "para_519" }, { "text": "for different programs to speak to each other”); Sega, 977 F.2d", "paragraph_id": "para_520" }, { "text": "at 1514 (noting that “no other means of access to the unpro-", "paragraph_id": "para_521" }, { "text": "tected elements exists”); Connectix, 203 F.3d at 599 (holding", "paragraph_id": "para_522" }, { "text": "that copying was “necessary to permit Connectix to make its", "paragraph_id": "para_523" }, { "text": "non-infringing Virtual Game Station function with PlayStation", "paragraph_id": "para_524" }, { "text": "games”).8 Here, ROSS does not need to copy Thomson Reu-", "paragraph_id": "para_525" }, { "text": "ters’s headnotes to access the underlying unprotected infor-", "paragraph_id": "para_526" }, { "text": "mation. ROSS had access to the underlying judicial opinions", "paragraph_id": "para_527" }, { "text": "and could freely copy them to make the memos needed to train", "paragraph_id": "para_528" }, { "text": "its AI. It chose not to do so because copying the headnotes", "paragraph_id": "para_529" }, { "text": "offered an “easy” way to create its training memos. App.", "paragraph_id": "para_530" }, { "text": "8 Also critical to the outcome in Oracle was that the at-issue", "paragraph_id": "para_531" }, { "text": "computer code was “declaring code,” the use of which “is in-", "paragraph_id": "para_532" }, { "text": "herently bound together with uncopyrightable ideas” and that", "paragraph_id": "para_533" }, { "text": "the value of Java as a program “lies in its efforts to encourage", "paragraph_id": "para_534" }, { "text": "programmers to learn and to use that system.” 593 U.S. at 28–", "paragraph_id": "para_535" }, { "text": "29. By contrast, Thomson Reuters’s headnotes do not derive", "paragraph_id": "para_536" }, { "text": "value from others copying them.", "paragraph_id": "para_537" }, { "text": "21", "paragraph_id": "para_538" }, { "text": "8545–46. Unlike necessity, ease is not a justification for cop-", "paragraph_id": "para_539" }, { "text": "ying. In sum, the first factor weighs against fair use.9", "paragraph_id": "para_540" }, { "text": "2. Nature of the Copyrighted Work", "paragraph_id": "para_541" }, { "text": "The second factor evaluates the “nature” of the headnotes.", "paragraph_id": "para_542" }, { "text": "17 U.S.C. § 107(2). Under this factor we consider whether the", "paragraph_id": "para_543" }, { "text": "work was published or unpublished when it was used and if the", "paragraph_id": "para_544" }, { "text": "work, while creative enough for copyright protection, has fac-", "paragraph_id": "para_545" }, { "text": "tual or functional elements. Harper & Row, 471 U.S. at 563–", "paragraph_id": "para_546" }, { "text": "64. More creative, less factual works are “closer to the core of", "paragraph_id": "para_547" }, { "text": "intended copyright protection.” Campbell, 510 U.S. at 586.", "paragraph_id": "para_548" }, { "text": "This factor will generally weigh in favor of fair use when a", "paragraph_id": "para_549" }, { "text": "9 Courts have at times considered whether copying was done", "paragraph_id": "para_550" }, { "text": "in good faith when evaluating the first factor. See Oracle, 593", "paragraph_id": "para_551" }, { "text": "U.S. at 32–33 (explaining the good faith consideration but ex-", "paragraph_id": "para_552" }, { "text": "pressing skepticism about whether good faith still plays any", "paragraph_id": "para_553" }, { "text": "role in the fair use analysis). Here, the undisputed evidence", "paragraph_id": "para_554" }, { "text": "reflects that ROSS at times acted in bad faith. See, e.g., App.", "paragraph_id": "para_555" }, { "text": "4969–76, 6443, 6449, 6454, 6495 (ROSS attempting to access", "paragraph_id": "para_556" }, { "text": "Westlaw with law-firm investor credentials despite notice that", "paragraph_id": "para_557" }, { "text": "doing so was prohibited by Westlaw’s terms of service); App.", "paragraph_id": "para_558" }, { "text": "6491–93 (stating ROSS employee inquired about a Westlaw", "paragraph_id": "para_559" }, { "text": "account under the guise of a solo practitioner); App. 6956 (stat-", "paragraph_id": "para_560" }, { "text": "ing ROSS employee used student account to access Westlaw,", "paragraph_id": "para_561" }, { "text": "hiding his employment by a competitor). So to the extent good", "paragraph_id": "para_562" }, { "text": "faith remains relevant, that consideration weighs against fair", "paragraph_id": "para_563" }, { "text": "use.", "paragraph_id": "para_564" }, { "text": "22", "paragraph_id": "para_565" }, { "text": "work is primarily factual or functional. Oracle, 593 U.S. at 20,", "paragraph_id": "para_566" }, { "text": "28–29. But courts have noted that “[t]he second factor has", "paragraph_id": "para_567" }, { "text": "rarely played a significant role in the” fair use determination.", "paragraph_id": "para_568" }, { "text": "Authors Guild, 804 F.3d at 220. Here, Thomson Reuters pub-", "paragraph_id": "para_569" }, { "text": "lished the headnotes before ROSS used them. And the head-", "paragraph_id": "para_570" }, { "text": "notes are more factual than fictional because they must accu-", "paragraph_id": "para_571" }, { "text": "rately convey the law and describe uncopyrightable judicial", "paragraph_id": "para_572" }, { "text": "opinions. This factor thus favors fair use.", "paragraph_id": "para_573" }, { "text": "3. Amount and Substantiality of the Portion Used", "paragraph_id": "para_574" }, { "text": "For the third factor, we evaluate whether “the amount and", "paragraph_id": "para_575" }, { "text": "substantiality of the portion used in relation to the copyrighted", "paragraph_id": "para_576" }, { "text": "work as a whole” is “reasonable in relation to the purpose of", "paragraph_id": "para_577" }, { "text": "the copying.” Campbell, 510 U.S. at 586 (quoting 17 U.S.C.", "paragraph_id": "para_578" }, { "text": "§ 107(3)). This factor requires us to assess, quantitatively, how", "paragraph_id": "para_579" }, { "text": "much of the copyrighted work was used and, qualitatively,", "paragraph_id": "para_580" }, { "text": "whether the use took “the heart” of the work. Harper & Row,", "paragraph_id": "para_581" }, { "text": "471 U.S. at 565. In evaluating the third factor, we “recognize", "paragraph_id": "para_582" }, { "text": "that the extent of permissible copying varies with the purpose", "paragraph_id": "para_583" }, { "text": "and character of the use.” Campbell, 510 U.S. at 586–87.", "paragraph_id": "para_584" }, { "text": "As to the amount and substantiality of the headnotes used,", "paragraph_id": "para_585" }, { "text": "ROSS copied the entire text of the 25,000 Westlaw-written", "paragraph_id": "para_586" }, { "text": "headnotes into its memos and used those to train its AI pro-", "paragraph_id": "para_587" }, { "text": "gram. ROSS’s purpose in copying the headnotes was highly", "paragraph_id": "para_588" }, { "text": "similar to the headnotes’ original purpose, and ROSS aimed to", "paragraph_id": "para_589" }, { "text": "make a commercial substitute for Westlaw using Westlaw’s", "paragraph_id": "para_590" }, { "text": "work. See supra Section II.B.1. ROSS thus lacked a", "paragraph_id": "para_591" }, { "text": "23", "paragraph_id": "para_592" }, { "text": "transformative purpose and character that would make exten-", "paragraph_id": "para_593" }, { "text": "sive copying reasonable. See Authors Guild, 804 F.3d at 221", "paragraph_id": "para_594" }, { "text": "(explaining that a transformative purpose allows more exten-", "paragraph_id": "para_595" }, { "text": "sive copying than copying done to offer a competing substitute", "paragraph_id": "para_596" }, { "text": "for the original).", "paragraph_id": "para_597" }, { "text": "ROSS responds that it took an insubstantial portion of", "paragraph_id": "para_598" }, { "text": "Thomson Reuters’s work—only 0.08% of Thomson Reuters’s", "paragraph_id": "para_599" }, { "text": "28 million headnotes. But copying even an “insubstantial por-", "paragraph_id": "para_600" }, { "text": "tion” of an original work is not fair if, qualitatively, an im-", "paragraph_id": "para_601" }, { "text": "portant part of the work is copied. Harper & Row, 471 U.S. at", "paragraph_id": "para_602" }, { "text": "564–65. “The crux of the inquiry is whether ‘no more was", "paragraph_id": "para_603" }, { "text": "taken than necessary’” to achieve the copier’s purpose. Ha-", "paragraph_id": "para_604" }, { "text": "thiTrust, 755 F.3d at 98 (quoting Campbell, 510 U.S. at 589).", "paragraph_id": "para_605" }, { "text": "The purpose behind ROSS’s copying was minimally trans-", "paragraph_id": "para_606" }, { "text": "formative, at best. Copying the headnotes was also not neces-", "paragraph_id": "para_607" }, { "text": "sary to train ROSS’s AI, as the underlying judicial opinions", "paragraph_id": "para_608" }, { "text": "were freely available. So, ROSS took more than necessary", "paragraph_id": "para_609" }, { "text": "when it copied these headnotes without a justifying transform-", "paragraph_id": "para_610" }, { "text": "ative purpose.10 Thus, the third factor weighs against fair use.", "paragraph_id": "para_611" }, { "text": "10 Additionally, we affirm the District Court’s holding that each", "paragraph_id": "para_612" }, { "text": "individual headnote is a copyrightable work. See supra Sec-", "paragraph_id": "para_613" }, { "text": "tion II.A; cf. Oracle, 593 U.S. at 33 (recognizing that taking", "paragraph_id": "para_614" }, { "text": "one sentence from a book may seem insubstantial, unless that", "paragraph_id": "para_615" }, { "text": "sentence itself constituted the entirety of a short story). So for", "paragraph_id": "para_616" }, { "text": "each headnote taken, ROSS copied an entire work. Such ex-", "paragraph_id": "para_617" }, { "text": "tensive copying was not reasonable because it was not sup-", "paragraph_id": "para_618" }, { "text": "ported by a sufficiently transformative purpose.", "paragraph_id": "para_619" }, { "text": "24", "paragraph_id": "para_620" }, { "text": "4. Market Effect of the Use", "paragraph_id": "para_621" }, { "text": "The fourth factor concerns “the effect of the use upon the", "paragraph_id": "para_622" }, { "text": "potential market for or value of the copyrighted work.” 17", "paragraph_id": "para_623" }, { "text": "U.S.C. § 107(4). The “potential market” includes both the", "paragraph_id": "para_624" }, { "text": "market for the original work and any market for derivative uses", "paragraph_id": "para_625" }, { "text": "of the original work. Campbell, 510 U.S. at 590 (quoting 17", "paragraph_id": "para_626" }, { "text": "U.S.C. 107(4)). In this context, we will also consider any", "paragraph_id": "para_627" }, { "text": "“public benefits the copying will likely produce.” Oracle, 593", "paragraph_id": "para_628" }, { "text": "U.S. at 35. So to resolve this appeal, we consider harm to the", "paragraph_id": "para_629" }, { "text": "original market, harm to the value of the copyrighted work,", "paragraph_id": "para_630" }, { "text": "harm to the potential derivative market, and the alleged public", "paragraph_id": "para_631" }, { "text": "benefits of the copying.", "paragraph_id": "para_632" }, { "text": "We begin with the original market. The parties dispute", "paragraph_id": "para_633" }, { "text": "which is the relevant original market. ROSS argues that the", "paragraph_id": "para_634" }, { "text": "relevant original market is the market for headnotes as a", "paragraph_id": "para_635" }, { "text": "standalone product, which ROSS claims does not exist. Even", "paragraph_id": "para_636" }, { "text": "assuming this is the relevant market, ROSS’s argument ignores", "paragraph_id": "para_637" }, { "text": "the effect of ROSS’s use on the value of Thomson Reuters’s", "paragraph_id": "para_638" }, { "text": "headnotes. Our Court rejected a similar argument in Video", "paragraph_id": "para_639" }, { "text": "Pipeline, Inc. v. Buena Vista Home Entertainment, Inc., 342", "paragraph_id": "para_640" }, { "text": "F.3d 191, 202 (3d Cir. 2003), abrogated in part on other", "paragraph_id": "para_641" }, { "text": "grounds by TD Bank N.A., 928 F.3d at 278. There, a website", "paragraph_id": "para_642" }, { "text": "that published trailers and clips of Disney movies argued that", "paragraph_id": "para_643" }, { "text": "no market existed for movie trailers because no one “ever paid", "paragraph_id": "para_644" }, { "text": "or will ever pay any money merely to see trailers.” Id. at 202.", "paragraph_id": "para_645" }, { "text": "We rejected that argument, stating that “[t]he [fair use] statute", "paragraph_id": "para_646" }, { "text": "directs us to consider the effect of the use upon the . . . value", "paragraph_id": "para_647" }, { "text": "25", "paragraph_id": "para_648" }, { "text": "of the copyrighted work, not only the effect upon the market,", "paragraph_id": "para_649" }, { "text": "however narrowly that term is defined.” Id. (emphasis in orig-", "paragraph_id": "para_650" }, { "text": "inal) (citation modified). Video Pipeline’s publishing of the", "paragraph_id": "para_651" }, { "text": "trailers damaged the trailers’ value in drawing users to Dis-", "paragraph_id": "para_652" }, { "text": "ney’s website, where Disney could induce purchases or cross-", "paragraph_id": "para_653" }, { "text": "market other products; it made no difference that no standalone", "paragraph_id": "para_654" }, { "text": "trailer market existed. Id. The same is true here. While there", "paragraph_id": "para_655" }, { "text": "may be no standalone market for headnotes, Thomson Reuters", "paragraph_id": "para_656" }, { "text": "touts the headnotes as a feature to attract users to buy a", "paragraph_id": "para_657" }, { "text": "Westlaw subscription. By copying the headnotes and using", "paragraph_id": "para_658" }, { "text": "them to build its own competing legal-research platform,", "paragraph_id": "para_659" }, { "text": "ROSS appropriated the headnotes’ value for finding and ana-", "paragraph_id": "para_660" }, { "text": "lyzing judicial opinions and diminished their value as a draw", "paragraph_id": "para_661" }, { "text": "for users to Thomson Reuters’s legal-research platform. So,", "paragraph_id": "para_662" }, { "text": "Video Pipeline supports the conclusion that ROSS’s copying", "paragraph_id": "para_663" }, { "text": "harmed the value of Thomson Reuters’s headnotes.", "paragraph_id": "para_664" }, { "text": "Thomson Reuters argues that the legal-research platform", "paragraph_id": "para_665" }, { "text": "market is the relevant original market. ROSS offers no con-", "paragraph_id": "para_666" }, { "text": "vincing reason to ignore this market, so we consider it. The", "paragraph_id": "para_667" }, { "text": "undisputed evidence here reveals that ROSS copied the head-", "paragraph_id": "para_668" }, { "text": "notes to create a competing legal-research platform in the same", "paragraph_id": "para_669" }, { "text": "market as Westlaw. “[U]nrestricted and widespread” copying", "paragraph_id": "para_670" }, { "text": "of Thomson Reuters’s headnotes to develop substitute legal-", "paragraph_id": "para_671" }, { "text": "research tools, like ROSS did, would harm Westlaw’s position", "paragraph_id": "para_672" }, { "text": "in that original market. Andy Warhol, 598 U.S. at 524 n.3", "paragraph_id": "para_673" }, { "text": "(quoting Campbell, 510 U.S. at 590). ROSS offers no evidence", "paragraph_id": "para_674" }, { "text": "to rebut the alleged harm in this market.", "paragraph_id": "para_675" }, { "text": "26", "paragraph_id": "para_676" }, { "text": "We turn now to potential derivative markets for Thomson", "paragraph_id": "para_677" }, { "text": "Reuters’s headnotes. The parties dispute the relevant potential", "paragraph_id": "para_678" }, { "text": "derivative market. ROSS argues it did not harm any potential", "paragraph_id": "para_679" }, { "text": "derivative market because no derivative market for headnotes", "paragraph_id": "para_680" }, { "text": "exists. Thomson Reuters argues that ROSS harmed its position", "paragraph_id": "para_681" }, { "text": "in the potential derivative market for licensing headnotes as AI", "paragraph_id": "para_682" }, { "text": "training data. “The market for potential derivative uses in-", "paragraph_id": "para_683" }, { "text": "cludes only those that creators of original works would in gen-", "paragraph_id": "para_684" }, { "text": "eral develop or license others to develop.” Campbell, 510 U.S.", "paragraph_id": "para_685" }, { "text": "at 592. But a potential derivative market is not illusory just", "paragraph_id": "para_686" }, { "text": "because an author “has evidenced little if any interest in ex-", "paragraph_id": "para_687" }, { "text": "ploiting this market for derivative works.” Castle Rock Ent.,", "paragraph_id": "para_688" }, { "text": "Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132, 145–46 (2d Cir.", "paragraph_id": "para_689" }, { "text": "1998).", "paragraph_id": "para_690" }, { "text": "Here, the evidence shows that the market for licensing", "paragraph_id": "para_691" }, { "text": "headnotes as text to train AI is rapidly developing. Addition-", "paragraph_id": "para_692" }, { "text": "ally, Thomson Reuters presented evidence that it is using its", "paragraph_id": "para_693" }, { "text": "headnotes as training data for its own AI search products.", "paragraph_id": "para_694" }, { "text": "ROSS offers no evidence to disprove this. That Thomson Reu-", "paragraph_id": "para_695" }, { "text": "ters did not license its headnotes to others does not disprove", "paragraph_id": "para_696" }, { "text": "that a market exists to do so. Additionally, ROSS’s copying", "paragraph_id": "para_697" }, { "text": "harmed Thomson Reuters in this market. By copying the head-", "paragraph_id": "para_698" }, { "text": "notes for use as training data without Thomson Reuters’s au-", "paragraph_id": "para_699" }, { "text": "thorization, ROSS usurped Thomson Reuters’s opportunity to", "paragraph_id": "para_700" }, { "text": "enter that derivative market and license its headnotes for that", "paragraph_id": "para_701" }, { "text": "purpose. The market harm caused by ROSS’s use weighs", "paragraph_id": "para_702" }, { "text": "against fair use.", "paragraph_id": "para_703" }, { "text": "27", "paragraph_id": "para_704" }, { "text": "Finally, we consider whether the public benefits are “re-", "paragraph_id": "para_705" }, { "text": "lated to copyright’s concern for the creative production of new", "paragraph_id": "para_706" }, { "text": "expression” and how “comparatively important, or unim-", "paragraph_id": "para_707" }, { "text": "portant” the public benefits are “when compared with dollar", "paragraph_id": "para_708" }, { "text": "amounts likely lost” due to copying. Oracle, 593 U.S. at 35–", "paragraph_id": "para_709" }, { "text": "36. ROSS claims its copying will benefit the public by increas-", "paragraph_id": "para_710" }, { "text": "ing access to the law. But the underlying judicial opinions are", "paragraph_id": "para_711" }, { "text": "freely available, and ROSS’s service was offered at prices", "paragraph_id": "para_712" }, { "text": "comparable to Westlaw. So it is unclear how ROSS’s copying", "paragraph_id": "para_713" }, { "text": "would greatly increase public access to the law. ROSS also", "paragraph_id": "para_714" }, { "text": "argues the District Court’s decision will halt AI development.", "paragraph_id": "para_715" }, { "text": "But ROSS presents no evidence to support that broad claim.", "paragraph_id": "para_716" }, { "text": "Finally, ROSS argues that AI is critical for national security", "paragraph_id": "para_717" }, { "text": "purposes so copyright should not impede ROSS’s AI develop-", "paragraph_id": "para_718" }, { "text": "ment. ROSS again presents no evidence connecting its legal-", "paragraph_id": "para_719" }, { "text": "research platform to national security. Despite doing so in", "paragraph_id": "para_720" }, { "text": "other circumstances,11 the DOJ has not raised national security", "paragraph_id": "para_721" }, { "text": "concerns about the conduct in this case. While some AI tech-", "paragraph_id": "para_722" }, { "text": "nology may implicate national security concerns, this does not", "paragraph_id": "para_723" }, { "text": "give ROSS carte blanche to violate copyright law merely be-", "paragraph_id": "para_724" }, { "text": "cause it incorporates AI. Thus, the fourth factor weighs against", "paragraph_id": "para_725" }, { "text": "fair use.", "paragraph_id": "para_726" }, { "text": "In conclusion, the second factor weighs slightly in favor of", "paragraph_id": "para_727" }, { "text": "fair use, but the first, third, and fourth factors weigh against it.", "paragraph_id": "para_728" }, { "text": "Evaluating these factors together, and in light of copyright’s", "paragraph_id": "para_729" }, { "text": "purposes, we hold that ROSS’s use was not fair. See UpCodes,", "paragraph_id": "para_730" }, { "text": "11 See, e.g., DOJ Statement at 1.", "paragraph_id": "para_731" }, { "text": "28", "paragraph_id": "para_732" }, { "text": "172 F.4th at 261 (exploring and weighing all factors “together,", "paragraph_id": "para_733" }, { "text": "in light of the purposes of copyright”) (quoting Murphy v. Mil-", "paragraph_id": "para_734" }, { "text": "lennium Radio Grp. LLC, 650 F.3d 295, 306 (3d Cir. 2011)).", "paragraph_id": "para_735" }, { "text": "* * * * *", "paragraph_id": "para_736" }, { "text": "Because Thomson Reuters’s 2,243 headnotes are original", "paragraph_id": "para_737" }, { "text": "enough for copyright protection and ROSS’s use of the head-", "paragraph_id": "para_738" }, { "text": "notes was not fair, we will AFFIRM.", "paragraph_id": "para_739" }, { "text": "29", "paragraph_id": "para_740" }, { "text": "Counsel for Appellant", "paragraph_id": "para_741" }, { "text": "Ji Won Oh", "paragraph_id": "para_742" }, { "text": "Kufere Laing", "paragraph_id": "para_743" }, { "text": "Mark S. Davies [Argued]", "paragraph_id": "para_744" }, { "text": "Andrew M. Legolvan", "paragraph_id": "para_745" }, { "text": "Yar R. Chaikovsky", "paragraph_id": "para_746" }, { "text": "WHITE & CASE", "paragraph_id": "para_747" }, { "text": "Kayvan M. Ghaffari", "paragraph_id": "para_748" }, { "text": "Anne M. 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