February 19, 2025

A Hint of How AI Infringement Suits Will Go?

As the lawyers reading this know, media giant Thomson Reuters has a proprietary online research database called Westlaw. In addition to hosting cases and statutes, Westlaw also includes original material written by Westlaw editors. A recent decision involving that original content and its use by Ross Intelligence, a potential Thomson Reuters competitor, to create an AI-powered product may provide a bit of a roadmap on fair use and other issues facing the courts considering cases against OpenAI, Perplexity and other generative AI platforms.

First, some background: while the bulk of Westlaw’s content — statutes, rules, ordinances, cases, administrative codes, etc.— are not subject to copyright protection, Westlaw editors concisely restate the important points of a case with short summaries. Each is called a Headnote. Westlaw organizes Headnotes into something called the West Key Number System, which makes it much easier to find what you’re looking for. 

This case began when Ross asked to license Westlaw’s Headnotes to create its own, AI-powered legal research search engine. Not surprisingly, Thomson Reuters didn’t want to help create a competitor and said no. 

As a workaround, Ross hired a company called LegalEase, which in turn hired a bunch of lawyers to create training data for Ross’ AI. This training data took the form of a list of questions, each with correct and incorrect answers. While the lawyers answering these questions were told not to simply cut and paste Headnotes, the answers were formulated using Westlaw’s Headnotes and the West Key Number System. LegalEase called these “Bulk Memos.” 

Thomson Reuters was none too happy about this and sued Ross for, among other things, copyright infringement, claiming that “Ross built its competing product from Bulk Memos, which in turn were built from Westlaw [H]eadnotes.” In its defense, Ross claimed that Westlaw’s Headnotes were not subject to copyright protection, and that to the extent it infringed on Thomson Reuters’ copyrights, its use constituted fair use. 

In 2023 the Court largely denied Thomson Reuters’ motion for summary judgment, ruling that, among other things, the question of whether Headnotes qualify for copyright protection would have to be decided by a jury. The Court, however, subsequently had a change of heart and asked Thomson Reuters and Ross to renew their motions for summary judgment. Earlier this month, the Court ruled on these renewed motions. 

Of note, the Court found that at least some Headnotes qualified for copyright protection, as did the West Key Number System. On the Headnotes, the Court found that the effort of “distilling, synthesizing, or explaining” a judicial opinion was sufficiently original to qualify for copyright protection. The Court also found the West Key Number System to be sufficiently original to clear the “minimal threshold for originality” required for copyright protection. The Court further found that the Bulk Memos infringed on some of the Headnotes.

The Court also rejected Ross’ assertion of fair use. Its decision was based largely on the fact that Ross was using Thomson Reuters’ Headnotes to create a competing product. Here, the Court looked at not only Thomson Reuters’ current market, but also potential markets it might develop, finding that since Thomson Reuters might create its own AI products the Ross product could negatively impact the market for Thomson Reuters, which weighed against fair use. 

The Court was not impressed with Ross’ reliance on a line of cases finding copying of computer code at an intermediate step to be fair use. Here, the Court noted that Ross was not copying computer code. Moreover, in those cases, the copying was necessary to access purely functional elements of a computer program and achieve new, transformative purposes. In contrast, Ross used Headnotes to make it easier to develop a competitive product. 

Ultimately, these conclusions are most interesting because of what other courts hearing AI infringement cases may take from them. Sure, there are differences (notably, Ross doesn’t seem to be using generative AI), but this case highlights some of the legal and factual issues we’re going to see as other cases move forward. In particular, I think the fact that the Court here found that the process of summarizing or distilling longer cases into Headnotes renders the Headnotes subject to copyright protection may be problematic for companies such as OpenAI, which has tried to claim that it is only ingesting underlying facts from news articles. If creating Headnotes is sufficiently original to qualify for copyright protection, then it seems likely that a reporter selecting the facts to include in a news article is also sufficiently original. 

Stay tuned. There is much, much more to come.