Last week the Court of Appeals for the Third Circuit, which oversees the districts of Delaware, New Jersey, Pennsylvania, and the Virgin Islands, upheld and further underlined a lower court ruling in the ongoing AI and copyright case of Thomson Reuters v. ROSS Intelligence Inc. At Courthouse News Service, Jackson Healy explains that the ruling found that materials which are changed with enough “creative spark” can be copyrightable, and therefore under existing copyright law cannot be fairly used by an AI to create a competing business.
This new decision mostly upholds a lower court’s ruling. There’s a good write-up of that original ruling by Yuanxiao Xu in the Authors Alliance that I’m drawing on heavily to understand the ruling and its impacts. From my reading, this seems to be a limited ruling that concerns a non-generative AI model, but the way the case treats copyright and a work’s transformation into an original could have major implications on how AI companies harvest data in the future.
Some background first. In 2020, Thompson Reuters sued an AI company, the now out-of-business ROSS Intelligence, over claims that one of their “AI-driven products to augment lawyers’ cognitive abilities” illegally ripped headnotes (descriptions at the top of judicial opinions containing summaries of legal issues) from Reuters’s legal research platform Westlaw. Crucially, ROSS was denied the ability to use Westlaw’s writing, and instead turned to a third party program to access and bundle the information it wanted.
ROSS then used this data to build a competing product, and Reuters sued over a breach of copyright. ROSS claimed fair use (a defense which has worked for other AI companies in the past), but in 2025, a judge ruled that ROSS using the headnotes was a breach of copyright law. The judge said that even though Westlaw is drawing initially on non-copyrightable judicial opinions for their headnote text, their arrangement and curation of the text had enough of a “creative spark” to be legally considered original work. To quote the judgment, “it still has the minimum ‘spark’ of originality.”
ROSS appealed, and this led to the most recent ruling in the Third Circuit by U.S. Circuit Judge Tamika Montgomery-Reeves, who affirmed the lower court’s findings: Westlaw’s headnotes possess “minimal ‘creative spark,’” and are therefore original. ROSS’s uses, on the other hand, were “minimally transformative at best” and in service of making a directly competing service. So, illegal.
Though “this case appears to concern the future of AI legal technology… In truth, this is no more than an ordinary copyright case,” wrote the Judge Montgomery-Reeves. This is important to me, because as much as these tech companies claim to be upending everything with AI and claiming extraordinarily special privileges as a result, there is still legal gravity constraining them.
But the ruling is a mixed bag, especially for books and publishing.
Why could this be troubling for other challenges to AI going forward? To quote Xu again: “First, it blurs the line between fact and expression… Second, it expands copyright enforcement to intermediate copies… Third, it conjures up a new market for AI training data.” All of this means that the transformation from fair and unfair use cases when it comes to text is debatable enough to be an open lane for a firm with enough time and money. Defining a way to transform work into something original that can be copyrighted and protected perhaps points a way for a new market to launder media so that AI can use it.
One thing to note is that ROSS Intelligence is hardly a big player in the AI world. This is one of the concerns that Xu cites in her Authors Alliance piece: decisions like these may be drawing some lines that AI companies can’t cross, but ones that will be minimally prohibitive for AI behemoths like Google, Meta, or Palantir, companies who are already destroying books to feed their softwares.
My very unlegalistic take is that it’s interesting how many of these cases come down to a sense of what feels new. This mimics so much of the backlash to AI’s outputs, which also hinges on how slop often just feels off: you can sense the weird smoothness and inhumanity of an extruded product. Think of the Pope’s spiritual reading that ”algorithms lack the spark of humanity”—there’s something essential missing in AI generated text and images that is hard to define but often clearly discernible.
This kind of judgement isn’t new in the law—think of the famous “I know it when I see it” judgement on obscenity from the Supreme Court’s Jacobellis v. Ohio—but it does feel insubstantially up to the whims of an individual court, or antiquated somehow. The idea of the law hinging on whether or not you can discern “a spark of creativity” seems like a legal measure that might be used to convict someone of witchcraft.
In short, I don’t think the law will save us from an industry that refuses to slow down. Law is imprecise, in that it is tasked with finding repeatable judgements out of a series of unique cases. It reminds me of Sigfried Giedion’s analysis of slaughterhouses in his Mechanization Takes Command: both are processes “to adapt mechanism to irregular, organically formed bodies” in order that they all exit the system or assembly line in a standardized way. There is a minimum of compromise baked in.
And without the law or government stepping in to tell these firms to quit it, it’s up us, individually or collectively, to weigh the choice to use or not use AI. What are you wiling to compromise of your spark of humanity for some promised profit or convenience? Is a moment of discomfort or failure or confusion so intolerable that it must be scrubbed away forever? Can you generate a picture of your family as Smurfs without remembering that this tech is simultaneously being used in Israeli genocide, America’s illegal wars and kidnapping, and intelligence failures that almost led to another world war?
The only option that I see is to get together and push back. I’ve been inspired by things like groups of parents who were able to push the nation’s largest school system to ban AI or the Summer of Ludd that revels in our collective human spark. As someone who wants to see art and creativity protected from AI, I worry that each court case like this is a pharmakon, offering us a short term reprieve that is enfeebled by loopholes.
You can read the entire Third Circuit opinion here.
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