DMCA Safe Harbor Law Confirmed by Appeals Court
February 6, 2025On February 11, 2025, Judge Bibas of the U.S. District Court for Delaware, issued a first in the nation decision, on summary judgment, finding that the use of copyrighted material to train an AI engine violates the Copyright Act. In this copyright infringement action, legal research behemoth Thomson Reuters (a/k/a WestLaw) sued Ross Intelligence, an AI (artificial intelligence) company based on Ross’ use of WestLaw material. The Court found that Ross engaged in copyright infringement in connection with Ross’ use of 2,243 Westlaw headnotes to train Ross’ AI engine. The Court found that Ross actually copied these headnotes and that the copied material was substantially similar to Thomson Reuters/WestLaw’s copyrighted works. The only remaining factual issue on liability is whether some of the copyrights have expired, which will be determined at trial.
The Court rejected several of Ross’ defenses including innocent infringement, copyright misuse by Thompson, fair use, merger, and scenes a faire. Innocent infringement does not apply because Thompson/Westlaw’s headnotes bore copyright notices. Copyright misuse was rejected as Ross failed to show Thomson Reuters misused its copyrights to stifle competition. The merger and scenes à faire defenses were found inapplicable.
The merger doctrine in copyright law states that when an idea and its expression are so closely linked that there are very few ways to express the idea, the expression “merges” with the idea and becomes uncopyrightable. The Court rejected that defense as applied to the WestLaw headnotes stating ” there are many ways to express points of law from judicial opinions.” The scenes à faire doctrine refers to elements in a work that are so standard or common to a particular topic that they cannot be protected by copyright. The Court, rejecting that defense, held that “nothing about a judicial opinion requires it to be slimmed down to [WestLaw’s] headnotes or categorized by key numbers.”
Regarding Ross’ fair use defense, the Court analyzing four major factors: (i) Purpose and character of use, finding that this favored Thomson Reuters, as Ross’s use was commercial and not transformative. Ross’s AI engine was trained on the WestLaw headnotes to directly compete with Thompson. (ii) Nature of the copyrighted work, finding that this factor favored Ross, as the headnotes had limited creativity. (iii) Amount and substantiality used, finding that this factor favored Ross, as the end product did not include Westlaw headnotes. (iv) Effect on the market, finding that this factor strongly favored Thomson Reuters, as Ross intended to compete with Westlaw’s legal research services. Balancing these factors, the Court rejected Ross’ fair use defense. This factor was considered “undoubtedly the single most important element of fair use.” The Court found that Ross’ use would likely have a negative effect on both the current market for legal research platforms and the potential derivative market for AI training data. The Court noted, “Even taking all facts in favor of Ross, it meant to compete with Westlaw by developing a market substitute.”