MBW Explains is a series of analytical features in which we explore the context behind major music industry talking points – and suggest what might happen next. Only MBW+ subscribers have unlimited access to these articles. MBW Explains is supported by Reservoir.
The record companies suing AI music-making platform Suno for mass copyright infringement have turned up the heat on the startup tech company.
Here are three key things to know about the latest salvo in this closely-watched courtroom drama.
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1) How Suno got its hands on copyrighted content could be its Achilles’ heel
A key aspect of the amended complaint against Suno is that it expands the lawsuit’s strategy from simply focusing on the AI company’s alleged use of copyrighted music to the question of how Suno got its hands on millions of unauthorized copies of recordings.
It’s pretty much a given that an AI developer who doesn’t want to pay for a license to use copyrighted music also won’t want to pay for millions of legal recordings. So that leaves the AI company with one option: piracy.
And the evidence is mounting that AI developers – not just Suno – have engaged in mass piracy to collect the materials they need to train their models.
In a congressional hearing this past summer, IP lawyers testified that companies like Meta and Anthropic engaged in mass online theft of copyrighted content to feed their algorithms, with one witness calling it “likely the largest domestic piracy of intellectual property in our nation’s history.”
In the case of Anthropic, this is now virtually beyond dispute: Earlier this month, it was reported the company agreed to pay out USD $1.5 billion to book authors who had sued the company, alleging that it had used the authors’ works to train its Claude chatbot.
What led to that settlement? A federal court ruling earlier this year that Anthropic’s use of copyrighted materials counts as “fair use” under US copyright law – but pirating the materials does not. Anthropic was facing a trial this fall to determine the damages it would have to pay for using online pirate libraries to scrape countless digital versions of books to train Claude.
To copyright holders, that ruling sent a clear signal: Simply proving that an AI company used copyrighted material without permission may not result in a slam-dunk win, but if you can show that the AI company engaged in piracy to gain that material, your odds greatly improve.
Anthropic is also facing a lawsuit by music publishers over Claude’s alleged copying of copyrighted lyrics, and in the wake of the ruling in the book authors’ case, these music publishers (Universal Music Publishing Group, Concord and ABKCO) expanded their accusations against Anthropic. In a court filing last month, they alleged Anthropic used BitTorrent to download those lyrics.
BitTorrent is a decentralized file-sharing system, mostly used for illicit pirating of content, in which anyone who downloads a file also uploads parts of that file to other users, meaning that Anthropic would have also uploaded the lyrics to other users engaged in piracy. In so doing, Anthropic violated publishers’ exclusive distribution rights for those lyrics, the publishers stated in their complaint.
Now, the major record labels suing Suno are following suit, and alleging that Suno also illicitly pirated the content it trained its AI on. In Suno’s case, the amended complaint states that the method used was “stream-ripping” – a way of downloading and saving digital files from streaming services by circumventing their anti-downloading technologies.
The majors allege that Suno stream-ripped music from YouTube, using code to get around the “rolling cipher” that YouTube uses to encrypt the actual location of the files embedded in its video player window.
Doing that is a clear violation of the anti-circumvention laws that are part of US copyright law, and there’s no “fair use” exemption for this sort of activity.
However, the record labels aren’t exactly jumping on a bandwagon here; in fact, it seems the recording industry has been working for some time to prove that AI companies have been pirating content.
In the case of the allegations against Suno, the amended complaint states that the evidence for piracy comes from the International Confederation of Music Publishers (ICMP), which has apparently been looking into the matter for the past two years. Earlier this month, it shared the results of its investigation exclusively with Billboard.
According to Billboard’s report, the evidence pointed not only to Suno engaging in piracy to get content, but its rival AI music-making platform Udio as well. (Udio was sued by the record majors at the same time as Suno, but at least so far, the record companies haven’t filed a similar accusation against Udio.)
With the possibility that AI companies may get away with using copyrighted content through the “fair use” argument, presenting evidence of piracy strengthens copyright holders’ cases against AI developers – and the argument may yet prove to be the Achilles’ heel of AI developers who seek to avoid paying for the copyrighted materials they ingest.
2) The majors haven’t given up on fighting the ‘fair use’ argument
Anthropic’s win on the “fair use” argument in the lawsuit brought by book authors doesn’t mean it’s now settled law that AI companies can use copyrighted content however they want – far from it.
In fact, just days after the ruling in the Anthropic case, another judge on the same bench (the US District Court for the Northern District of California) declared that such use of copyrighted content is not fair use – and that judge went so far as to criticize the judge in the Anthropic case for “brushing aside concerns about the harm [AI] can inflict on the market for the works it gets trained on.”
So… one court, two different opinions. The dispute could finally be resolved on appeal, or the whole issue could be pre-empted by legislation such as the COPIED Act, tabled last year, that would explicitly make it illegal for AI companies to use copyrighted content without permission.
“Suno’s conduct violates the very purposes of the copyright law and runs contrary to the purpose animating the fair use doctrine.”
Major record labels, in a complaint against Suno
In the meantime, the record companies suing Suno haven’t given up on their insistence that “fair use” simply doesn’t apply when it comes to hoovering up thousands or millions of pieces of copyrighted content to train an AI model that competes with that very same content.
“Suno’s conduct violates the very purposes of the copyright law and runs contrary to the purpose animating the fair use doctrine,” the record majors’ complaint states. (You can read the full amended complaint here.)
Noting that the fair use doctrine allows, in some limited circumstances, unauthorized use of copyrighted material for the purposes of “criticism, comment, news reporting, teaching… scholarship, or research,” the complaint asserts that fair use exists to “ensur[e] public availability of ‘literature, music, and other arts’ so that other humans can draw on those works to create new ones.”
But “Suno’s wholesale copying of countless recordings serves none of these purposes… Suno’s motive is brazenly commercial and threatens to displace the genuine human artistry that is at the heart of copyright protection.”
3) The majors think they have Suno on the ropes over a quote from an early investor
Much to the joy of the record labels suing Suno, there have been a number of “near-admissions” (for lack of a better term) by Suno and its investors that the AI company has indeed used copyrighted content without permission to train its AI model.
In its response last fall to the record companies’ lawsuit, the company all but admitted that it had used copyrighted recordings, stating that its training data “includes essentially all music files of reasonable quality that are accessible on the open Internet, abiding by paywalls, password protections, and the like…”
(Note Suno’s mention that it “abid[es] by paywalls, password protections, and the like” – as noted above, that might not actually be the case.)
Nonetheless, Suno argued that its use of those recordings should count as “fair use” under US copyright law. The record companies pooh-poohed this idea, with the Recording Industry Association of America (RIAA) declaring that “there’s nothing fair about stealing an artist’s life’s work, extracting its core value, and repackaging it to compete directly with the originals.”
“honestly, if we had deals with labels when this company got started, I probably wouldn’t have invested in it.”
Antonio Rodriguez, Matrix Partners, speaking with Rolling Stone in 2024
Yet another, perhaps equally important “near-admission” came from Antonio Rodriguez, a partner at venture capital firm Matrix Partners, an early investor in Suno.
In an interview with Rolling Stone last year, Rodriguez said his VC firm invested in Suno with the understanding that it might face lawsuits from music rights holders, but that’s “the risk we had to underwrite when we invested in the company.”
Rodriguez told Rolling Stone that “honestly, if we had deals with labels when this company got started, I probably wouldn’t have invested in it. I think they needed to make this product without the constraints.”
In their complaint, the record majors said Rodriguez’s message “was clear: he was willing to ‘underwrite’ the costs of the lawsuits relating to Suno’s large-scale intellectual property theft because he expected his investment in Suno to be accretive despite the damages owed to copyright owners.”
Rodriguez’s comments were reflective of the often dismissive attitude that many in the tech sector have when it comes to copyright (see, for instance, Jack Dorsey and Elon Musk’s exhortation to “delete IP law”), but now, that attitude could be one of the blows that leads to Suno being on the hook potentially for billions in damages to record companies.
Reservoir (Nasdaq: RSVR) is a publicly traded, global independent music company with operations across music publishing, recorded music, and artist management.Music Business Worldwide
