A US District Court of Delaware judge has ruled in favor of Thomson Reuters in a copyright infringement lawsuit against Ross Intelligence, a legal AI startup. The partial summary judgment, issued on Tuesday, marks an early victory for Thomson Reuters in a case that could have significant implications for the legality of AI tools and how they are trained.

The lawsuit, filed in 2020, centers around Ross Intelligence's use of Thomson Reuters' Westlaw search engine, which indexes a mix of copyrightable and non-copyrightable material, including legal decisions and human-edited headnotes. Ross Intelligence allegedly used this content to train its AI tool, without obtaining a license or permission from Thomson Reuters.

Judge Stephanos Bibas rejected Ross Intelligence's fair-use defense, citing the impact of the AI tool on the market for the original work's value. The ruling notes that Ross Intelligence built a direct competitor to Westlaw by using Thomson Reuters' copyrighted material, including the headnotes, which are a signature feature of the Westlaw subscription.

Ross Intelligence had attempted to license Westlaw's content, but was rejected by Thomson Reuters. The startup then turned to another company, LegalEase, and purchased 25,000 Bulk Memos of questions and answers written by lawyers using the Westlaw headnotes. These memos were used as training data for Ross Intelligence's AI tool.

Despite Ross Intelligence CEO Andrew Arruda's claims that the Westlaw data was "added noise" and that the tool aimed to recognize and extract answers directly from the law using machine learning, the judge found evidence of actual copying. The ruling describes how the judge compared the similarity of each of the 2,830 Bulk Memo questions, headnotes, and judicial opinions, concluding that the evidence of copying was "so obvious that no reasonable jury could find otherwise."

This ruling has significant implications for the AI industry, as similar lawsuits against OpenAI, Microsoft, and other AI giants are currently making their way through the courts. These cases will likely hinge on the question of whether AI tools can claim a "fair use" defense for using copyrighted material.

The outcome of these cases could have a profound impact on the development and training of AI tools, as well as the future of the AI industry as a whole. As the use of AI technology continues to grow, the need for clear guidelines on copyright and fair use becomes increasingly important.

Ross Intelligence shut down in 2021, citing the lawsuit as a major factor in its decision. The startup had called the lawsuit "spurious" but was unable to raise enough funding to continue operating while embroiled in the legal battle.

This ruling serves as a warning to AI startups and companies that rely on copyrighted material for training their AI tools. As the AI industry continues to evolve, it is essential that companies prioritize obtaining the necessary licenses and permissions to avoid costly legal battles.