Legal Frontiers: AI Training, Artistic Integrity, and Corporate Liability in Copyright Law

The intersection of intellectual property and modern creative expression is undergoing a period of unprecedented turbulence. From the automated scrapers of Silicon Valley to the high-stakes design studios of global toy manufacturers, the definition of "originality" is being stress-tested in courtrooms across the United States. This week, three pivotal cases—involving Thomson Reuters, Kat Von D, and Lego—have highlighted how traditional copyright doctrines are struggling to adapt to the digital age.

1. The AI Precedent: Thomson Reuters v. Ross Intelligence

Main Facts

The Third Circuit Court of Appeals has issued a significant ruling in the long-running copyright dispute between legal information giant Thomson Reuters and AI startup Ross Intelligence. The case centers on the allegation that Ross Intelligence systematically scraped and ingested Thomson Reuters’ "Westlaw" headnotes—concise, copyrighted summaries of judicial opinions—to train its own legal research AI models.

Chronology of the Dispute

• 2020: Thomson Reuters files a copyright infringement lawsuit against Ross Intelligence, asserting that the startup’s AI model was built on the back of protected proprietary content.
• 2023/2024: The lower court rejects Ross Intelligence’s primary defense, which relied heavily on the doctrine of "fair use."
• September 2026: The Third Circuit Court of Appeals upholds the lower court’s decision, marking a major victory for publishers and data aggregators.

Implications for AI Development

This ruling serves as a warning to AI developers that the "training data" defense is not a blank check. By affirming that the wholesale ingestion of copyrighted summaries constitutes infringement rather than transformative fair use, the court has effectively narrowed the sandbox for AI companies. This decision may force developers to seek more robust licensing agreements, shifting the economics of AI development from "scraping-first" to "licensing-first."

2. The Artistic Threshold: The Miles Davis Tattoo Case

Supporting Data and Context

In a rare en banc hearing, the Ninth Circuit Court of Appeals is re-examining the standards for "substantial similarity" in copyright infringement cases. The case stems from a dispute between photographer Jeff Sedik and tattoo artist Kat Von D. Sedik alleged that a tattoo created by Von D—which perfectly replicated his portrait of jazz legend Miles Davis—infringed upon his copyright, particularly when the image was disseminated via social media.

The "Extrinsic-Intrinsic" Dilemma

For years, the Ninth Circuit has utilized a two-part test to determine infringement:

1. Extrinsic Test: An objective comparison of specific expressive elements (subject matter, composition, lighting).
2. Intrinsic Test: A subjective "total concept and feel" test, often left to a jury.

In this instance, a jury found that while the tattoo and the photograph were identical, they were not "substantially similar" under the law. This bizarre legal outcome prompted the appeal.

Official Responses and Legal Shift

The three-judge panel that initially heard the appeal expressed deep skepticism regarding the current test, suggesting it is outdated in an era where high-fidelity digital reproduction is trivial. By elevating the matter to an en banc hearing—where all 11 judges sit to decide the case—the Ninth Circuit signals a potential tectonic shift in how copyright law will treat derivative works in the future. If the court moves toward a purely intrinsic test or eliminates the current hurdle, it could become significantly easier for photographers and artists to protect their work against unauthorized replication.

3. The Corporate Liability: Lego and the ‘Queer Eye’ Jacket

Main Facts

A Connecticut court has denied Lego’s motion for summary judgment in a high-profile case involving the "Queer Eye" television set. The plaintiff, James Concannon, alleges that the toy manufacturer infringed upon his intellectual property by including a miniature version of his custom-designed jacket on an Antoni Porowski minifigure.

Chronology

• 2021: Lego launches a "Queer Eye" set, featuring minifigures of the show’s cast.
• Post-Launch: Concannon files a complaint, stating that while he granted the show permission to use his design, he never licensed the jacket for commercial use by a third party like Lego.
• 2026: The court denies Lego’s motion for summary judgment, rejecting both the "implied license" argument and the fair use defense.

Implications for Licensing and Merchandising

This case is a cautionary tale for corporations that operate under the assumption that "incidental" or "fan-service" usage of artistic work is automatically fair use. Lego’s argument—that the jacket was a necessary component of an accurate set representation—was effectively neutralized by the court. As the case heads toward trial, manufacturers may need to conduct more rigorous copyright audits before releasing products that incorporate third-party designs, regardless of how small or "incidental" the design appears.

Comparative Analysis: Trends in Copyright Litigation

When viewed collectively, these three cases demonstrate a tightening of the net around entities that use external content for commercial purposes.

The "Transformative" Defense Under Siege

Historically, defendants in copyright cases have leaned heavily on the "transformative use" defense—the idea that changing the context of a work (e.g., turning a photo into a tattoo, or a professional article into an AI training set) creates a new, non-infringing work. However, courts are increasingly signaling that "transformation" is not a substitute for authorization.

In the case of AI, the court is essentially saying that "transforming" data into a machine-learning model does not erase the underlying copyright of the source material. Similarly, in the Lego case, the court is asserting that even if a design is "transformed" into a tiny plastic minifigure, the original designer’s rights remain intact.

The Role of Technology in Infringement

Technology has moved faster than the law, but the law is catching up. The Ninth Circuit’s desire to reconsider the "substantial similarity" test is a direct response to the digital age, where copying is perfect and instant. By calling for an en banc review, the judiciary is acknowledging that the old frameworks—designed for analog media—are failing to account for the modern reality of digital reproduction and AI synthesis.

Future Outlook

As these cases progress, stakeholders in the creative industries should prepare for a landscape where:

1. Licensing is Mandatory: AI companies will likely be forced to establish industry-wide licensing pools to access training data, similar to how music streaming services pay royalties.
2. Increased Scrutiny on Merchandising: Manufacturers will face higher thresholds for proving that their products do not infringe on the creative designs of independent contractors.
3. Refinement of Legal Standards: The Ninth Circuit’s upcoming decision will likely set a new, more rigorous standard for copyright infringement that could influence courts nationwide.

The "3 Count" of legal developments this month underscores a fundamental truth: the digital revolution has reached a point of legal maturity. The era of "move fast and break things" is giving way to an era of "measure twice, license once." For creators, the courts are beginning to provide the protections they have long sought; for corporations, the costs of intellectual property negligence are rising at an exponential rate. As the trial for the Lego case approaches and the Ninth Circuit deliberations continue, the boundaries of copyright law will continue to be redrawn in real-time.