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US musicians union urges court to reject Universal and Warner bid to dismiss lawsuit over Suno and Udio deals
The American Federation of Musicians (AFM) has asked a New York federal court to reject attempts by Universal Music Group and Warner Music Group to dismiss its lawsuit over their AI licensing deals with Suno and Udio. The union argues these deals trigger a "new use" clause in its collective bargaining agreement, which it says obliges the labels to pay musicians whose recordings were licensed to the AI firms, making this a significant test of how existing union contracts apply to generative AI music deals.
In a filing on 17 July, the AFM told Judge Edgardo Ramos that Article 21(a) of the Sound Recording Labor Agreement is "ambiguous" and imposes a mandatory payment obligation regardless of whether a specific AI rate has been set elsewhere, citing past precedent with video game licensing. Universal and Warner, in earlier letters filed on 7 and 10 July respectively, argued the clause only converts existing rates rather than creating new royalty entitlements, with Warner accusing the union of trying to influence negotiations through litigation. Both majors also sought to pause evidence discovery pending their dismissal bids, a request the AFM has opposed; the union separately said it would amend its complaint to name Warner Records, Inc. rather than Warner Music Group Corp. as defendant.
In short
- AFM opposes UMG and Warner's bid to dismiss AI licensing lawsuit
- Dispute centres on whether musicians are owed payment for Suno/Udio deals
- Labels say contract clause doesn't create new royalty rights
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The AFM argues that Article 21(a)'s reference to 'new uses' creates an ambiguous contractual obligation that must be interpreted in musicians' favour, particularly given established precedent from video game licensing disputes. Licensing sound recordings to AI firms for training generative models constitutes a fundamentally novel application never contemplated when the recordings were created, and the union contends that existing rate structures therefore cannot apply without triggering new compensation owed to the musicians whose work is being exploited in this unprecedented manner.
The case against
Universal and Warner contend that Article 21(a) functions as a conversion clause applying existing established rates to new contexts, rather than a mechanism for generating entirely new payment obligations. The labels argue the contract language supports their interpretation and that the union is using litigation as leverage in commercial negotiations rather than pursuing a genuine legal uncertainty. They maintain that when new uses arise, they simply fall under the rates already codified in the agreement, requiring no additional payments unless the contract explicitly mandates them.
Explained simply
The American Federation of Musicians represents musicians who perform on sound recordings. Its agreements with record companies set out how musicians are paid and what happens when recordings are used in new ways. Universal Music Group and Warner Music Group are major record companies.
Suno and Udio make AI music tools that can generate music in response to user prompts. The labels have made licensing deals with the companies, allowing them to use recordings under agreed terms. The union says its contract requires musicians to receive payment when recordings are licensed for this kind of use.
The case may help determine how existing music contracts apply to generative AI. Its outcome could affect payments to musicians and how record companies and unions negotiate terms for new uses of recorded music.
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