Warner Music Group seeks dismissal of AFM lawsuit over AI licensing deals

In a letter filed with Judge Edgardo Ramos on 10 July, Warner requested a pre-motion conference ahead of a formal motion to dismiss the case. The company argues that the lawsuit is an attempt to influence ongoing collective bargaining negotiations over AI-related issues.

“AFM filed this lawsuit in an improper attempt to place a judicial thumb on the negotiation scales, asking this Court to impose contractual terms that only collective bargaining can create,” Warner said in its filing.

The AFM sued Warner Music Group and Universal Music Group, alleging that the companies breached the Sound Recording Labor Agreement (SRLA) by licensing recordings featuring union members to Suno and Udio without providing payment or credit to the performers.

The union is seeking a share of the revenues generated from those licensing agreements, as well as a portion of any proceeds the record companies received through settlements of copyright infringement claims against the AI companies.

Warner contends that the SRLA, signed in March 2023, does not cover the licensing of recordings for AI model training because such uses were not contemplated when the agreement was negotiated.

“Music-focused platforms like Suno and Udio did not exist" when the agreement was signed, Warner said, adding that "neither the SRLA nor any AFM agreement contemplates compensation related to the licensing or other use of content for training AI models.”

The company also argued that the union's own complaint acknowledges that AI-related uses fall outside the scope of the existing agreement.

According to Warner, Article 21 of the SRLA, which governs the use of recordings in other media, does not itself establish legal rights to compensation but instead refers to separate agreements that would need to govern such uses.

“Because no contract entitles AFM members to any portion of AI licensing revenues, neither AFM nor its members have been injured.”

Warner further argued that Warner Music Group Corp. should not be named as a defendant because it is a holding company rather than a record label.

“Warner Music Group Corp. is not a signatory to the SRLA, does not itself own copyrights, was not a plaintiff in the copyright infringement lawsuits against Suno and Udio, and thus does not have licences with Suno or Udio.”

The company identified Warner Brothers Records and Atlantic Recording Corp. as the Warner entities that are signatories to the labour agreement.

Warner also maintained that the dispute should be resolved through collective bargaining rather than litigation, noting that AI is currently a central issue in negotiations over the next version of the SRLA.

“AFM's claim for relief would require the Court to set rates and terms the AFM is currently seeking at the parties' bargaining table. That would improperly intrude on the collective bargaining process.”

The company rejected the union's claim that it had an obligation to notify the AFM about the Suno and Udio licensing agreements, arguing that no such requirement exists under the current labour agreement.

In addition to seeking dismissal of the lawsuit, Warner has asked the court to pause the discovery process while its motion is considered, arguing that the case contains “substantial threshold defects”.