Howdy, y'all.
No NIL scouting report this week — nothing cleared the bar. Instead, two copyright stories that couldn't be more different from each other: a federal appeals court just handed down the first ruling in the country on whether copying protected content to train an AI is fair use (short answer: no), and Bill Withers' publisher is suing over a British pop star's song they say lifted a Grammy-winning melody. One story is about the future of AI. The other sounds like it's been happening forever — because it has.
Let's get into it.
Cover Your Assets
The First Appellate Fair Use Ruling on AI Training Is In. Here's What It Says — and What It Doesn't.
On September 29, the U.S. Court of Appeals for the Third Circuit issued the first federal appellate decision in the country to directly address whether copying copyrighted material to train an AI model qualifies as fair use. The answer, in this case, was no.
The case is Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc. You may already know it: Thomson Reuters, which owns Westlaw, sued ROSS Intelligence, a now-defunct startup that built an AI-powered legal research tool. ROSS wanted to create a system that would answer plain-language legal questions by returning relevant passages from judicial opinions. To train it, ROSS hired a third party to prepare roughly 25,000 training memos. The memo writers used thousands of Westlaw headnotes — the short, editor-written summaries that identify points of law in published opinions — to frame legal questions, then paired those questions with judicial opinion passages. ROSS then converted the memos into machine-readable training data.
Thomson Reuters sued. The district court granted partial summary judgment on 2,243 headnotes. The Third Circuit just affirmed.
What the court actually decided
Before reaching fair use, the court confirmed that Westlaw headnotes are original enough to deserve copyright protection. That might seem obvious, but ROSS argued the headnotes were essentially factual — just summaries of what courts said. The Third Circuit disagreed. The editors who write headnotes make creative choices: which points of law to include, how to frame them, how much context to provide. That's enough for copyright. Even works that feel functional or factual can qualify if there's a "modicum of creativity" in how they're expressed.
On fair use, the analysis turned on two of the four statutory factors: purpose and market harm.
On purpose: the court found ROSS's use only minimally transformative. Westlaw uses headnotes to help lawyers find relevant law. ROSS used those same headnotes to train an AI that helps lawyers find relevant law. The intermediate step — using the headnotes in training rather than in the final product — didn't change the underlying purpose. The court also knocked down ROSS's argument that it had to use the headnotes to access the underlying judicial opinions. It didn't. The opinions themselves are public domain. ROSS chose to copy the headnotes because it was easier, not because it was necessary. The court called it the "easy" path rather than the required one. That distinction matters: fair use isn't a license to copy protected material just because it's more convenient than finding an alternative.
On market harm: this is the factor worth paying close attention to. The court didn't just look at whether ROSS hurt Westlaw's existing business. It looked at whether ROSS's use harmed a developing market for AI training licenses. Courts have recognized that even nascent, theoretical licensing markets count in the fourth-factor analysis. If content owners are beginning to license their material for AI training — and they are — then a company that bypasses licensing and copies for free undercuts that market whether or not the existing business model is immediately damaged. That reasoning is going to echo in every music, publishing, and news-organization AI case that reaches an appellate court.
What the court didn't decide — and why that matters
The Third Circuit was deliberate about the limits of its ruling. ROSS's system was not a generative AI model. It didn't produce new text or new creative expression. It returned passages from existing judicial opinions. The court explicitly declined to say whether its fair use analysis would apply to large language models that generate new output — the GPTs and Claudes and Geminis of the world. It called this "an ordinary copyright case," not a ruling on the future of AI.
That caveat is real. A court analyzing a generative AI model would face different facts on the transformativeness question: if a model generates new creative expression rather than returning existing text, the argument that the use is transformative is at least plausible. Whether it's ultimately persuasive is a different matter, and the music and news publishing cases pending in other circuits will take that on directly.
What the ROSS decision does firmly establish: the "it's just training data" argument doesn't automatically create a fair use safe harbor. Standard copyright analysis applies. Commercial purpose hurts. Easy alternatives to copying hurt. Harm to licensing markets hurts — and that harm includes markets that don't fully exist yet.
What this means for creators
If you create content that has value — articles, courses, photos, music, writing — there is now appellate-level precedent that companies cannot freely copy that content for AI training and claim fair use as a blanket defense. The fact that the content ends up in a training dataset rather than in the final product doesn't make the copying transformative. The fact that you haven't yet set up a licensing program doesn't mean you have no market to protect.
This doesn't mean every AI training claim wins. It means the defense that "training is always fair use" is gone at the appellate level. The cases will be decided on their specific facts, and generative AI presents different facts than ROSS did. But the direction of travel is clear.
Bill Withers' Publisher Is Suing Over an Olivia Dean Song. The Labels Are the Target — Not the Artist.
On October 1, Mattie Music Group — the publisher that controls Bill Withers' catalog — filed a copyright infringement lawsuit in California federal court. The target: Capitol Records, Universal Music Group, Sony Publishing, and Kobalt Music Publishing. The claim: that "I've Seen It," the closing track on British pop star Olivia Dean's 2025 album The Art of Loving, copied the "distinctively protectable melody" of Withers' 1981 Grammy-winning hit "Just the Two of Us" in "large and significant part."
Olivia Dean is not named as a defendant. Neither are her co-writers, Bastian Langebaek and Max Wolfgang. The suit goes after the commercial machine — the labels and publishers who recorded, distributed, licensed, and commercially exploited the song after being put on notice.
And that's the part of this story worth paying attention to.
The anatomy of a music infringement claim
Mattie Music says it first heard "I've Seen It" in August 2026. It listened to the song "several times," then hired musicologist Alexander Stewart, Ph.D., to perform a formal comparative analysis. His conclusion: the similarities are "obvious and inescapable" — not the result of coincidence, independent creation, or reliance on common musical elements, but evidence that Dean's song "copied in large and significant part" Withers' melody.
After the analysis, Mattie Music contacted the defendants in August. They kept releasing and monetizing the song. The lawsuit followed in October. The complaint seeks damages, profits, and an injunction against further exploitation.
"Just the Two of Us" was written by Withers, Ralph MacDonald, and William Salter. It reached No. 2 on the Billboard Hot 100 and won the Grammy for Best R&B Song. Withers died in March 2020 at 81.
Why the labels and publishers are the defendants
This is standard music copyright strategy, and it's worth understanding why it works this way.
In most music infringement cases, the claim against the songwriter is straightforward but practically limited — individual artists rarely have the resources to pay meaningful damages. The labels and publishers are a different matter. They're the ones who made money. They recorded it, distributed it globally, licensed it for sync placements, and collected royalties. They're also the ones who had the leverage to vet the song before release and the obligation to do so.
The complaint's allegation that Mattie Music notified the defendants in August and they continued commercial exploitation is significant. It potentially takes this from innocent infringement territory — where damages are limited — toward willful infringement, where they're not. Under the Copyright Act, statutory damages for willful infringement can reach $150,000 per work. Continuing to commercially exploit a song after receiving a formal infringement notice from the rights holder is exactly the kind of conduct that supports a willfulness argument.
This structure — sue the commercial exploiters rather than the creator — also sends a message to every label's legal department: your clearance process is your protection. If a song passes through your pipeline without adequate vetting and someone ends up holding a musicologist's report that says the melody was copied, the exposure lands on you.
What creators and brands should take from this
The music industry runs on speed. Songs get written, recorded, mixed, and released in compressed timelines, and thorough copyright clearance doesn't always keep pace. The Olivia Dean case is a reminder that the clearance burden doesn't disappear just because a song feels original to the people who made it. Subconscious copying — hearing a melody enough times that it lodges in your memory and resurfaces during a writing session — is a real theory, and courts have accepted it.
For brands commissioning original music: the same logic applies. If you hire a composer to write a jingle or a theme and that work later turns out to infringe an existing song, the question of who bears the liability depends on your contract. If the composer warranted that the work was original and indemnified you against infringement claims, you have a path. If the contract was silent on those points, you may be standing where Capitol Records is standing now.
See you next time,
Hank
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About Hank's IP Brew
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