A recently-filed federal court complaint tests the enforceability of restrictive terms in a data license against the use of licensed data for generative AI purposes. The outcome of this case may turn on interpreting broad terms such as training, internal research, distribution and publication.

UPDATE: On December 18, 2025, the court denied defendant Alexi Technologies Inc.’s (“Alexi”) motion for a temporary restraining order (TRO) based on Alexi’s contention that it would suffer irreparable harm without access to Fastcase’s updated data and lose revenue and customers and suffer reputational damage. In a brief order, the court found that Alexi’s harm is “too speculative and is not sufficiently corroborated to merit emergency relief at this time.” 

On November 26, 2025, legal research platform Fastcase, Inc. (“Fastcase”) sued legal AI company Alexi Technologies Inc. (“Alexi”) in a District of Columbia district court, alleging that Alexi used licensed “Fastcase Data” (i.e., a sophisticated, extensively tagged legal research database) to train and power a commercial AI legal research product in violation of a 2021 data license agreement.(Fastcase, Inc. v. Alexi Technologies Inc., No. 25-04159 (D.D.C. Filed Nov. 26, 2025)).

The complaint is particularly interesting as it involves a 2021 agreement – entered into before generative AI was a generally known technology – and thus presents the age-old question of interpreting the terms of an agreement to a technology not known at the time the agreement was entered into.

Regardless of the outcome of this case, the complaint highlights the importance of precise license drafting – for both licensors and licensees – in the age of AI. Parties should focus on well-defined understandings of how data can be used, shared and commercialized at a time where every company is seeking to leverage AI.  As this complaint illustrates, vague terms can lead to uncertainty and legal disputes.[1]

Of course, we do not know if this litigation will proceed to summary judgment or trial, but if it does, we may have an opportunity to see how a court will interpret and potentially enforce broad and general restrictions in a data license (e.g., no publication, distribution, commercial use, competitive use, use for internal research purposes only) in the context of generative artificial intelligence.[2]

In May 2024, we released Part I of this series, in which we discussed agentic AI as an emerging technology enabling a new generation of AI-based hardware devices and software tools that can take actions on behalf of users. It turned out we were early – very early – to the discussion, with several months elapsing before agentic AI became as widely known and discussed as it is today. In this Part II, we return to the topic to explore legal issues concerning user liability for agentic AI-assisted transactions and open questions about existing legal frameworks’ applicability to the new generation of AI-assisted transactions.

Background: Snapshot of the Current State of “Agents”[1]

“Intelligent” electronic assistants are not new—the original generation, such as Amazon’s Alexa, have been offering narrow capabilities for specific tasks for more than a decade. However, as OpenAI’s CEO Sam Altman commented in May 2024, an advanced AI assistant or “super-competent colleague” could be the killer app of the future. Later, Altman noted during a Reddit AMA session: “We will have better and better models. But I think the thing that will feel like the next giant breakthrough will be agents.” A McKinsey report on AI agents echoes this sentiment: “The technology is moving from thought to action.” Agentic AI represents not only a technological evolution, but also a potential means to further spread (and monetize) AI technology beyond its current uses by consumers and businesses. Major AI developers and others have already embraced this shift, announcing initiatives in the agentic AI space. For example:  

  • Anthropic announced an updated frontier AI model in public beta capable of interacting with and using computers like human users;
  • Google unveiled Gemini 2.0, its new AI model for the agentic era, alongside Project Mariner, a prototype leveraging Gemini 2.0 to perform tasks via an experimental Chrome browser extension (while keeping a “human in the loop”);
  • OpenAI launched a “research preview” of Operator, an AI tool that can interface with computers on users’ behalf, and launched beta feature “Tasks” in ChatGPT to facilitate ongoing or future task management beyond merely responding to real time prompts;
  • LexisNexis announced the availability of “Protégé,” a personalized AI assistant with agentic AI capabilities;
  • Perplexity recently rolled out “Shop Like a Pro,” an AI-powered shopping recommendation and buying feature that allows Perplexity Pro users to research products and, for those merchants whose sites are integrated with the tool, purchase items directly on Perplexity; and
  • Amazon announced Alexa+, a new generation of Alexa that has agentic capabilities, including enabling Alexa to navigate the internet and execute tasks, as well as Amazon Nova Act, an AI model designed to perform actions within a web browser.

Beyond these examples, other startups and established tech companies are also developing AI “agents” in this country and overseas (including the invite-only release of Manus AI by Butterfly Effect, an AI developer in China). As a recent Microsoft piece speculates, the generative AI future may involve a “new ecosystem or marketplace of agents,” akin to the current smartphone app ecosystem.  Although early agentic AI device releases have received mixed reviews and seem to still have much unrealized potential, they demonstrate the capability of such devices to execute multistep actions in response to natural language instructions.

Like prior technological revolutions—personal computers in the 1980s, e-commerce in the 1990s and smartphones in the 2000s—the emergence of agentic AI technology challenges existing legal frameworks. Let’s take a look at some of those issues – starting with basic questions about contract law.

On March 21, 2024, in a bold regulatory move, Tennessee Governor Bill Lee signed the Ensuring Likeness Voice and Image Security (“ELVIS”) Act (Tenn. Code Ann. §47-25-1101 et seq.) – a law which, as Gov. Lee stated, covers “new, personalized generative AI cloning models and services that enable human

Generative AI has been most synonymous in the public mind with “AI” since the commercial breakout of ChatGPT in November 2022. Consumers and businesses have seen the fruits of impressive innovation in various generative models’ ability to create audio, video, images and text, analyze and transform data, perform Q&A chatbot

In the rapidly-evolving AI space, the last few days of this week saw significant AI developments occur perhaps even faster than usual.  For example, seven AI companies agreed to voluntary guidelines covering AI safety and security and ChatGPT rolled out a custom preferences tool to streamline usage. In addition, as a related point, Microsoft issued a transparency note for the Azure OpenAI service.  And on top of that, this week saw announcements of a number of generative AI commercial ventures which are beyond the scope of this particular post.

One of the many legal questions swirling around in the world of generative AI (“GenAI”) is to what extent Section 230 of the Communications Decency Act (CDA) applies to the provision of GenAI.  Can CDA immunity apply to GenAI-generated output and protect GenAI providers from potential third party liability?

On June 14, 2023, Senators Richard Blumenthal and Josh Hawley introduced the “No Section 230 Immunity for AI Act,” bipartisan legislation that would expressly remove most immunity under the CDA for a provider of an interactive computer service if the conduct underlying the claim or charge “involves the use or provision of generative artificial intelligence by the interactive computer service.” While the bill would eliminate “publisher” immunity under §230(c)(1) for claims involving the use or provision of generative artificial intelligence by an interactive computer service, immunity for so-called “Good Samaritan” blocking under § 230(c)(2)(A), which protects service providers and users from liability for claims arising out of good faith actions to screen or restrict access to “objectionable” material from their services, would not be affected.