The Thurgood Marshall U.S. Courthouse entrance. Photo Credit: NYU FC
The American Federation of Musicians’ AI-focused lawsuit against Universal Music and Warner Music is getting really hot, really fast. Now, the union is aggressively pushing back against the defendants’ aggressive dismissal arguments and urging the court to let discovery proceed.
We broke down those dismissal arguments earlier in July, when both Universal Music and Warner Music requested related pre-motion conferences. Technically, the litigating majors are repped here by separate legal teams and submitted their letters on different days.
Nevertheless, there’s ample overlap between their positions, each centering on the idea that the relevant labor contract’s “new use” section, and specifically Article 21(a), doesn’t cover AI.
In the opposite corner, the American Federation of Musicians (AFM) is adamant that gen AI training constitutes a new use – and that its members are therefore owed compensation from the defendants’ Suno and Udio licensing deals.
(Far from settling with Udio, Sony Music yesterday fired off a supersized complaint against the AI music platform. As the major also has yet to settle with Suno, it’s not a party to the AFM’s complaint.)
“Article 21(a) is a rate conversion provision, not an open-ended royalty provision,” Universal Music Group (UMG) wrote to the court. “It requires payment only when another AFM agreement already governs—and supplies the negotiated rate for—the new use.”
“To prevail, AFM would need the Court to treat Article 21(a) as requiring a freestanding royalty for any non-covered use and to invent a rate the parties never agreed upon,” UMG continued.
Separately, even if it covered AI licensing, the labor agreement “supplies no rate, formula, or external benchmark by which any payment could be fixed, rendering the asserted obligation too indefinite to enforce,” per Universal Music.
Unsurprisingly, the AFM has come out swinging against the dismissal arguments, maintaining, at the top level, that the provision in question “is ambiguous and susceptible to more than a single interpretation.”
One such interpretation: That it’d be “nonsensical” for the agreement to solely cover uses “with a rate already established in another AFM agreement.”
“Past practice confirms this: For example, when companies first licensed music for video games, no AFM agreement had set a rate for that use, yet the parties treated it as a new use for both notification and payment purposes,” the AFM wrote.
Alternatively, if a contract must expressly set rates for any new use, there’s “room for interpretation as to which agreement applies” to the AI licensing deals, per the plaintiff. Machine-made audio is certainly making its way onto streaming services, for instance.
“Since the SRLA [Sound Recording Labor Agreement] sets rates for streaming, an AI recording on a streaming platform would be covered,” the AFM added. “Other likely AI uses—video games, sampling, commercials—are similarly subject to express SRLA rates.”
As such, discovery and the case itself should move forward, the filing party concluded. And with that, all eyes are on the presiding judge’s decision; a related update hit the docket today, but the full entry and any attached documents weren’t live at the time of this writing.
