UMG asks court to dismiss US musicians’ union lawsuit over Udio AI deal

Universal Music Group has asked a federal court to dismiss the lawsuit brought against it by the American Federation of Musicians over the licensing of sound recordings to AI music company Udio.

In a motion filed on Wednesday (August 5) in the US District Court for the Southern District of New York, UMG argued that the union’s single claim fails as a matter of law because the contract it sues under fixes no rate for the use of recordings to train generative AI.

“This case should be dismissed under Rule 12(b)(6) because the parties’ written agreement, the Sound Recording Labor Agreement…, forecloses AFM’s sole claim as a matter of law,” lawyers for UMG wrote in the filing.

In a statement issued to MBW, a UMG spokesperson pointed to the company’s AI licensing deals and its bargaining history with the union.

“Universal Music Group has been at the forefront of protecting the rights and advancing the interests of artists and songwriters in the age of AI – striking responsible AI licensing agreements to ensure they are compensated, leading the charge for legislation to further protect them and taking legal action against bad actors.”

The UMG spokesperson added: “The AFM chose this route during our collective bargaining negotiations, and we will continue to work to resolve any issues through these negotiations, as we have in the past.

“We expect to continue our strong working relationship with the AFM built on mutual respect for the talented musicians in our industry.”

The AFM, which describes itself as the largest union of professional musicians in the world, sued UMG and Warner Music on June 5, alleging that the companies licensed members’ recordings to Udio and Suno (WMG only) without compensation or credit.

Warner – not UMG – has struck a deal with Suno, settling its copyright lawsuit and licensing its music to the platform; UMG and Warner have both settled with Udio and struck deals with the AI music platform.

The complaint rests on Article 21(a) of the SRLA, the collective bargaining agreement between the AFM and the signatory record companies. Article 21(a) covers what the contract calls a “new use” of a recording – its use for a purpose the agreement does not otherwise cover.

The union alleges that the “[u]se of sound recordings in generative AI software models is not a purpose covered by the SRLA,” that licensing recordings to Udio for training AI models and generating outputs “constitutes a new use under Article 21(a),” and that UMG has paid its members nothing for it.

UMG countered that Article 21(a) sets no price of its own, but instead imports one from whichever separate AFM agreement governs the new use.

No such agreement exists for the AI use, UMG argued, so no payment is owed.

You can read the motion in full here.

“A payment measured by an agreement that does not exist is no payment at all,” UMG‘s lawyers wrote.

According to a transcript of the July 21 pre-motion conference reviewed by MBW, the discussion centered on whether the SRLA already requires payment for the AI use or leaves it to be negotiated.

The union’s lawyer, Eyad Asad, told US District Judge Edgardo Ramos there is “no rate in the Collective Bargaining Agreement for AI use” and “no underlying agreement for AI use,” adding: “We conceded that.”

The company’s position, Judge Ramos summarized, is not that the musicians “are not entitled to anything,” but that the agreement requires UMG to “sit down with AFM or the artists and determine to what extent they are going to benefit from that new use.”

“Exactly,” UMG‘s lead counsel, Orin Snyder, replied. “That’s precisely correct.”

At the conference, Judge Ramos had pressed UMG on the point, noting the company was presumably benefiting from licensing the music to AI firms and asking: “why shouldn’t you pay the authors of that music?”

Judge Ramos also compared the dispute to rap sampling, which he said became a new use that unions, artists and labels ultimately settled through negotiation, asking: “why is this any different?”

The AFM, which has urged the court to let the case proceed, told the judge it had little choice but to sue: the SRLA contains no arbitration procedure, so the union said it was “compelled to come to court,” and that ongoing bargaining does not bar it from acting to enforce the agreement.

The union also argues that Udio‘s AI outputs may end up in uses the SRLA already covers, such as streaming or film, which would carry existing rates.

Warner Records and Atlantic Recording Corp. – substituted for parent company Warner Music Group Corp. in an amended complaint filed on July 24 – have been granted leave to file their own motion to dismiss the union’s claims.

The dispute traces back to June 2024, when UMG and Warner Music sued Suno and Udio for copyright infringement.

Warner – not UMG – has since struck a deal with Suno; UMG and Warner have both settled with Udio. (Separately, the third major music company, Sony, remains in active litigation with both Suno and Udio.)

The two sides are negotiating a new SRLA at the same time, with bargaining sessions scheduled for the week of August 3 and proposals on AI compensation already exchanged, according to Warner‘s counsel.

Judge Ramos has stayed discovery and encouraged the parties to continue bargaining, a process UMG says dismissal would clear the way to resolve.Music Business Worldwide