bbieron@platformeconomyinsights.com

Judge Rejects Fair Use Defense of an AI Company (not Generative AI)

Feb 12, 2025

Report from TechSpot

In Brief – Federal Judge Stephanos Bibas has delivered a significant ruling in a copyright case pitting Thomson Reuters against the now-defunct legal services startup Ross Intelligence that claimed to have developed an AI-enabled legal service. Judge Bibas ruled that Ross’s system was developed using thousands of Thomson Reuters’ Westlaw case summaries without paying licensing fees, and that copies of those summaries were provided to Ross’s users. Of note, the judge took pains to point out that, “Ross’s AI is not generative AI (AI that writes new content itself). Rather, when a user enters a legal question, Ross spits back relevant judicial opinions that have already been written.” And therefore, he cautioned that this summary judgement ruling, which rejected Ross’s fair use copyright defense, was about non-generative AI. Bibas said that Ross’s fair use defense failed on two prongs of fair use analysis, namely that Ross’s service was a commercial venture that was not truly transformative, and that Ross’s service competed with Westlaw in the market and harmed Westlaw’s value. He said that the Supreme Court’s 2023 ruling in Andy Warhol Foundation v. Goldsmith guided his fair use determination.

Context – The fact that Ross’s service was inarguably not generative AI limits the value of the ruling on the huge questions around the legality of “training” the neural networks of major GAI models with non-licensed copyrighted material. In the EU, with its AI Act, regulators and AI expert groups will play key roles. In the US, copyright lawsuits targeting GAI giants will likely focus on fair use. Federal Judge William Orrick, overseeing cases involving image generating services trained on digital artworks, recently issued a ruling in which he explained that he is trying to ascertain how the GAI systems work. He will learn that they are not databases like Ross’s system. They do not store or retrieve copies. They “learn” from data and then produce new output. It will be interesting to see how courts react when GAI operators admit they don’t exactly know why their systems produce any particular output, hence the nagging existence of our favorite GAI concept, “hallucinations”.

View By Monthly
Latest Blog
Character.ai Files for Chapter 11 Bankruptcy in Reorganization Effort

Report from CNN In Brief – Character.ai, an AI “companion” chatbot startup facing extensive regulatory pressure and lawsuits alleging its app contributed to teen mental health problems and suicides, has filed for Chapter 11 bankruptcy as part of a plan to sell its...

UK Minister Calls for AI Safety Regulatory Regime

Report from the Financial Times In Brief – UK AI Minister Kanishka Narayan has urged frontier AI companies not to release models they cannot adequately control, while calling for Britain to develop sovereign infrastructure that gives the state greater control over...

Google Reaches News Content Compensation Deal with UK Publisher

Report from Hold the Front Page In Brief – Google will pay UK publisher Reach for content used in its AI-powered search features under a new commercial partnership, making Reach the first major UK regional publisher to secure such an agreement. The deal grants Google...

Platform Economy Insights produces a short email four times a week that reviews two top stories with concise analysis. It is the best way to keep on top of the news you should know. Sign up for this free email here.

* indicates required