Publications

Fair Use Question Goes to Trial in AI Copyright Lawsuit – Thomson Reuters v. Ross Intelligence

November 10, 2023 Articles

On September 25, 2023, a United States Circuit Judge determined that fact questions surrounding issues of fair use and tortious interference required a jury to decide media conglomerate Thomson Reuters’s lawsuit against Ross Intelligence, a legal-research artificial intelligence (AI) startup. Thomson Reuters, which owns legal research platform WestLaw, alleges that Ross infringed its copyright by illegally copying WestLaw’s short summaries of points of law that appear in judicial opinions (i.e., “headnotes”). 

Case Background (Using Legal Memos As Machine-Learning Training Data)

WestLaw has a registered copyright on “original and revised text and compilation of legal material,” which includes its headnotes and key number system. After unsuccessfully attempting to acquire a license to use WestLaw’s legal material to train its search engine, Ross Intelligence retained a third party to create memos with legal questions and answers. Ross then converted the memos into usable machine-learning training data. Thomson Reuters contends that the 25,000 questions were essentially WestLaw headnotes. Ross admits that the headnotes “influenced” the questions but that lawyers ultimately drafted them. 

Relying on 2,830 questions that it contended Ross’s own expert admitted were copied, Thomson Reuters moved for summary judgment on its copyright infringement claim and its tortious interference with contract claims. Both sides moved for summary judgment on Ross’s fair-use defense, and Ross moved for summary judgment on its preemption defense to Thomson Reuters’s tortious interference claims. 

Judge Bibas denied Thomson Reuters’s motion for summary judgment on its copyright infringement claim, finding that a dispute of fact existed over how closely WestLaw’s headnotes resemble uncopyrightable judicial opinions, as well as over whether Ross’s questions were substantially similar to WestLaw’s headnotes. Judge Bibas also denied both sides’ motions for summary judgment on Ross’s fair use defense. On Thomson Reuters’s tortious interference claims, Judge Bibas determined that while one claim was preempted, the other two must go to a jury. Finally, Judge Bibas entered summary judgment for Thomson Reuters on a number of Ross’s affirmative defenses. 

Key Takeaways

Critically, in denying the parties’ cross-motions for summary judgment on Ross’s fair use defense, the court concluded that the purpose and character of Ross’s use of WestLaw’s headnotes must be determined by contested facts. Ross had argued that intermediate copying caselaw is applicable and supports a finding of fair use. Such caselaw holds that users who copy material to discover unprotectable information or as a minor step in creating a new product are engaging in fair use. However, the court reasoned that whether such caselaw was applicable depended on a disputed fact: Does Ross’s search engine only use WestLaw headnotes to learn language patterns such that it can produce judicial opinion quotes, or does it use the headnotes to replicate the creative expression of WestLaw’s attorney editors? 

Although one might argue that this is a distinction without a difference, the court’s determination has implications for lawsuits challenging the use of copyrighted material to train generative AI systems. Indeed, there are currently other technology companies defending AI copyright suits by relying on the fair use defense with respect to existing writing, art, photography, and code to train generative AI systems. Many more jury trials will be required if judges must refrain from deciding whether the purpose of a generative AI system’s use of copyrighted material to learn language patterns is to produce a new product or to replicate creative expression. Companies developing generative AI systems should be careful to emphasize (and consistently document) that the purpose of their systems’ machine learning is not to copy creative expression, but to create something wholly new. 

Firm Highlights

News

Winston Liaw Named a Leadership Council on Legal Diversity Fellow

Northern California legal powerhouse Farella Braun + Martel is proud to announce that Winston Liaw has been named a Leadership Council on Legal Diversity (LCLD) Fellow for 2024. Winston joins a select group of...

Read More
Publication

Major Decision Affects Law of Scraping and Online Data Collection, Meta Platforms v. Bright Data

On January 23, 2024, the court in Meta Platforms Inc. v. Bright Data Ltd. , Case No. 3:23-cv-00077-EMC (N.D. Cal.), issued a summary judgment ruling with potentially wide-ranging ramifications for the law of scraping and...

Read More
News

Farella Wins Complete Defense Ruling at Trial for Smart Meter Technology Company

Northern California legal powerhouse Farella Braun + Martel secured a complete defense victory for a smart meter technology company following a two-week bench trial in the U.S. Bankruptcy Court for the Southern District of California...

Read More
News

Farella 2024 Partner Elevations: Cynthia Castillo and Greg LeSaint

Northern California legal powerhouse Farella Braun + Martel is pleased to announce the election of two lawyers to partnership effective Jan. 1: Cynthia Castillo and Greg LeSaint. “We are thrilled to elevate Cynthia and...

Read More
Publication

A Summary of New Laws Coming for California Employers in 2024

In 2023, California has adopted several new employment laws either introducing new employee protections or codifying existing practices into state law. With these changes, employers will need to examine and adjust some of their...

Read More
Publication

Is the Copyright Threat to Generative AI Overhyped? Implications of Kadrey v. Meta

In November 2023, Meta successfully had nearly all of the claims against it dismissed in the Kadrey v. Meta Platforms, Inc. suit, a victory with potential implications for other technology companies with generative AI tools...

Read More
News

Scraping Battles: Meta Loses Legal Effort to Halt Harvesting of Personal Profiles

Alex Reese spoke to Matt Fleischer-Black of  Cybersecurity Law Report about the Meta v. Bright Data decision and its impact on U.S. scraping case law. Read the article here (paywall or trial).

Read More
Publication

California Proposes New AI & Automated Decision-Making Technology Regulations

The California Privacy Protection Agency (CPPA) released its draft  regulatory framework for automated decision-making technology (ADMT) on November 27. These regulations are a preview of what new requirements may look like for companies currently...

Read More
Publication

It Wasn’t Me, It Was the AI: Intellectual Property and Data Privacy Concerns With Nonprofits’ Use of Artificial Intelligence Systems

In today's rapidly changing technological landscape, artificial intelligence (AI) is making headlines and being discussed constantly. To be sure, AI provides a powerful tool to nonprofits in creating content and exploiting for countless cost-effective...

Read More