Category: Intellectual Property

Music Making Gen AI: A Deeper Dive into Fair Use

fair use

In February 2023, I argued that using copyrighted works for the purpose of training generative artificial intelligence (GAI) products is not fair use. My view in that post was, and remains, that because the purpose of copyright law is to promote authorship, and authorship is human as a matter of doctrine, then a purpose which replaces authorship is facially antithetical to copyright’s constitutional foundation. So, because a finding of fair use, should, as a matter of law, further copyright’s purpose, the GAI developer’s defense under that exception is invalid.

That said, I assume the courts will not rule on this threshold, constitutional question at summary judgment and will instead conduct fair use analyses in the first cases that proceed to at least bench trial. After one or two outcomes, if favorable to plaintiffs, we will likely see a lot of settlements because so many of the AI cases alleging mass infringement for the purpose of machine learning (ML) present the same legal questions.

Turning to the recent lawsuits filed by record labels UMG, et al. against GAI developers Udio and Suno, both complaints anticipate the fair use responses to come and, to an extent, imply the doctrinal view articulated above. Because the two complaints are nearly identical in substance, I’ll stick to Udio because the suit is filed in the Southern District of New York (SDNY), and the Second Circuit is where nearly all—if not all—of the relevant fair use case law has been active or decided. Odds are, the court in the First Circuit, which has a comparatively thin copyright record, will follow the Second Circuit’s lead in resolving Suno.

As discussed in my first post about these cases, the defendants seem unable to present a plausible claim of non-infringement and even signaled that they have planned to argue fair use in the lawsuits they knew were coming. All the action will be focused on factor one, part one (whether the use is “transformative”) and on factor four (potential harm to the market for the works used).

To dispense with factors two and three, the nature of the work(s) used and amount of the work(s) used respectively, these clearly tilt in favor of the plaintiffs. The sound recordings used for ML are highly expressive in nature (factor two); and by all evidence and inferences presented, it seems clear that defendant copied whole works—and many of them—into the AI model (factor three). One way the use of whole works could swing back to favor the defendant would be finding that the purpose of the use under factor one is, indeed, transformative.

To get there, I believe the court would have to find transformativeness under its precedent in Google Books, but in addition to the court itself describing that decision as the outer boundary of fair use, the Supreme Court in Warhol may have at least sharpened, if not narrowed, that boundary. As a factual matter, a GAI like Udio is nothing like Google Books. The latter feeds whole books into a system for the purpose of creating a research tool, while the former feeds whole sound recordings into a system for the purpose of producing other sound recordings—several of which have been presented in evidence as substantially similar to famous sound recordings.

Considering Udio Under Fair Use

As mentioned, the focus will be on factors one and four, which is not uncommon, but these cases highlight the interplay between the two factors. Factor one asks the purpose of the use, including whether that purpose is commercial; and factor four asks whether the use threatens the market value for the work(s) used. Thus, if a court finds under factor one that a use serves a “substitutional” purpose, this suggests that the use will unavoidably cause harm to the market value of the works used under factor four. This is what the labels argue, but a product like Udio does imply new territory for a fair use consideration.

Factor one asks two interrelated questions—whether the purpose of the use is transformative, and whether that purpose is commercial in nature. Commercial use tilts away from fair use but is not determinative, and transformativeness tilts toward fair use, but is also not determinative. In fact, the Supreme Court decision in Warhol, reversed a trend whereby transformativeness too often carried the entire fair use analysis. For instance, Udio’s failure to license the works used for ML is itself a potential market harm under factor four. Thus, even if Udio’s purpose were held to be transformative, its commercial purpose would split factor one, and the rest of the fair use factors would likely still favor the plaintiffs.

But, as the complaint states, “[Udio is] far from transformative, as there is no functional purpose for Udio’s AI model to ingest the Copyrighted Recordings other than to spit out new, competing music files,” states the labels’ complaint. This is properly framed in context to what “transformative” means in copyright law. Transformativeness is not about technological novelty or even innovation that promises to “make the world better” and so on. Notwithstanding the hyperbole in many such claims by various developers, the transformative question in fair use focuses on distinction of purpose from the works used.

As the quote above indicates, Udio ingests (i.e., copies) sound recordings for the purpose of making other sound recordings. And the purpose of both sets of sound recordings is, generally and presumably, listening pleasure for consumers. Even if none of the music produced by Udio were substantially similar to any of the music that went in, the labels contend that the overall purpose is holistically substitutional for all the recordings used to create the product. Udio used the music of human artists to “make” music without human artists, which is a purpose far beyond the Google Books boundary of providing a research tool to humans, including some who will be authors of works.

In response, Udio can argue that the purpose of its product is to produce a plethora of “new” music, which may indeed threaten to replace artists, but which is no more a substitute for the works used than a Beyonce song is a substitute for a Taylor Swift song. This is a tricky moment for copyright, which protects authors’ rights by protecting the use of their property. For instance, if no song ever comes out of Udio that sounds like a copy of an existing song, or if Udio can show that the majority of songs output are “new,” it could argue that its purpose is not substitutional under factor one.

Additionally, if Udio could show that its purpose is substantially providing a tool for would-be music creators, its claim to being “transformative” would be stronger under Google Books. But based on the reported function and market objectives of both Udio and Suno—i.e., mass-market products enabling any consumer to “make music” with a few basic prompts—the “tool” claim, if it were made, seems unpersuasive.

Let me interject that tech developers and copyright antagonists often conflate the economic concept of “creative destruction” with transformativeness, arguing that “copyright stifles progress.” While I personally question whether Udio et al. necessarily represent progress as a cultural matter, even if Joe Schumpeter himself would agree that technological replacement of human music makers is “creative destruction,” that prospect anticipates the nullification of copyright law as a relic of impliedly obsolete human authorship. As such, it would seem preposterous for a court to find that an affirmative defense to infringement should be applied in a manner that would cause copyright law itself to implode.

None of this is to say, as indeed the complaint makes clear, that peaceful coexistence between human authors and GAI cannot come to pass. Where GAI may be used by the human creator to make an expressive work of her own mental conception, the AI product has a much stronger claim to promoting the progress of authorship. But in the case of these music making products, that does not appear to be the intent—either by design or business model. And so, to reprise the doctrinal assertion I advocate, the Google Books opinion itself states:

Courts thus developed the doctrine, eventually named fair use, which permits unauthorized copying in some circumstances, so as to further “copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts.’” [Emphasis added]

On that basis, the Second Circuit should find that a use of protected works which is holistically substitutional for human authorship does not further the purpose of copyright and is, therefore, barred from presenting a valid fair use defense.

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The American Music Fairness Act Gets a New Hearing

American Music Fairness Act

Tomorrow afternoon, the House Judiciary Committee IP Subcommittee will hold a hearing entitled Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists. The subject of the hearing is—at least ostensibly—to compare and contrast the royalty granting American Radio Fairness Act (AMFA) against the royalty denying Local Radio Freedom Act (LRFA). Witnesses to testify include recording artist Randy Travis; National Association of Broadcasters (NAB) president and CEO Curtis LeGeyt; SoundExchange president and CEO Michael Huppe; and Urban One Regional VP and General Manager Eddie Harrell, Jr.

As discussed in other posts, AMFA would, for the first time since radio was invented, require terrestrial stations to pay royalties to the artists whose sound recordings draw audiences and drive ad revenues. The United States is the only major radio market in the world that does not pay royalties to recording artists, and as a result, American artists are likewise not paid royalties when foreign radio stations play their music. And the only reason this unfairness has persisted is the lobbying power of NAB.

When AMFA was introduced in 2021 by Reps. Ted Deutch and Darrell Issa, the latter stated in a Capitol Hill press conference, “The broadcasters have become experts in muddying the waters.” Indeed. As we often see with the behemoths of Silicon Valley, the NAB is very adept at using the “little guy” to obfuscate and maintain the status quo of multi-billion-dollar advertising conglomerates that would rather not share even a fraction of revenue generated by the music they play. And although Mr. Travis is a star, the Subcommittee must remember that many of the beneficiaries of AMFA would be “little guys,” including studio musicians, producers, and engineers.

Granted none of the witnesses testifying tomorrow are “little guys,” though the presence of Mr. Harrell representing Urban One is interesting because I am hopeful that he does not conflate Black-owned with small. As the media conglomerate’s website states, “For more than 40 years, Urban One has been the leading voice speaking to Black America. First, as the largest local urban radio network. Then, as the largest syndicator of urban programming.”

Note the word largest appearing twice in two short sentences. And good for Urban One. They should be proud of their scope, reach, depth, and diversity of programming. But if Mr. Harrell testifies that Urban One cannot afford to pay royalties to musical artists—or worse, implies that AMFA would harm Black enterprise in media—that’s a moment to raise a skeptical eyebrow. And not just because more than a few of the musical artists drawing audiences to Urban One’s stations are also Black. As the company’s 2022 annual report states…

While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content platform targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties.

I wouldn’t want to take on new expenses either. But Urban One is a media giant looking to become a bigger media giant complete with television networks and, most notably, development of new and original content with licensing value. Content creators denying other content creators a fair deal is not a great look. As the above statement from the report makes clear, broadcast advertising remains foundational to the business, and the Subcommittee should not lose sight of the fact that musical artists continue to underwrite that revenue without any say or compensation in the arrangement.

Local Radio Freedom Act is the Missing the Fairness

As to actual little guys, while large broadcasters like Urban One would be subject to rates set by the Copyright Royalty Judges, the statutory “small broadcaster protections” of the AMFA should be sufficient to reject the central premise of the LRFA sponsored by Senators Hassan and Barrasso. On Sen. Hassan’s web page, NAB’s LeGeyt is quoted thus: “A new job-crushing performance fee on local radio stations would hurt stations’ ability to provide their free, essential service in communities across the country.”

In addition to the too-cute-by-half contrasting “freedom” against “fairness,” the LRFA simply ignores the fact that small, independent stations would pay fees that would not qualify as job affecting, let alone “job crushing.” A non-public, independent station with revenue between $100k and $1.5mm would pay $500/year; a public station with the same revenue range would pay $100/year; and a station with revenue under $100k would pay $10/year. Specifically, 72% of the 220 Black-owned radio stations (as of October 2021) generate less than $1mm in annual revenue and would be capped at the $500 annual fee.

Yet, despite these facts, the language of the LRFA is so replete with worn-out rationales for the status quo that it’s hard not to assume the NAB wrote every word of the bill. For instance, this one is rather long in the tooth:

Whereas local radio stations provide free publicity and promotion to the recording industry and performers of music in the form of radio airplay, interviews with performers, introduction of new performers, concert promotions, and publicity that promotes the sale of music, concert tickets, ring tones, music videos, and associated merchandise.

The “free publicity” argument was weak 20+ years ago, but today it is simply unsupportable. The Subcommittee knows, or should know, that music discovery occurs in a complex landscape that includes every platform from traditional radio to Instagram. The broadcaster cannot reasonably claim that, in general, they provide more value by promoting music than that music provides them value by drawing listeners. Speaking anecdotally, what is the frequency of remaining tuned to a radio stations playing music one already likes versus waiting to discover something new?

Nevertheless, AMFA includes a provision under which the royalty judges may consider “whether use of the station’s service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the sound recording copyright owner’s other streams of revenue from the copyright owner’s sound recordings.” Thus, where a station can provide some evidence to support the “promotion” argument, that can be taken into account when calculating the royalty payment. But this would require the broadcasters to put their money where their rhetoric is—and nobody can blame them for not wanting to put their money anywhere they don’t have to. But that doesn’t make it fair. “100 years of inequity” is right. It’s long past time to make it wrong.

Major Record Labels Sue Gen AI Devs Suno and Udio

The most prominent copyright lawsuit against Generative AI (GAI) to date dropped yesterday when the major record labels filed complaints against developers Suno and Udio in the District of Massachusetts and the Southern District of New York respectively. This is going to be one to watch, not just because of the size of the plaintiffs and the potential for significant damages, but because the complaints, in my view, present an intriguing combination of the legal questions addressed in most, if not all, of the other lawsuits filed against GAI companies.

For instance, in NY Times v. Open AI and Concord et al. v. Anthropic, both plaintiffs make a compelling prima facie case for copyright infringement by presenting large bodies of evidence showing either literal copies or substantially similar material output by the defendants’ systems. This is distinct from some of the visual artists’ lawsuits against Gen AIs like Midjourney and DALL-E where the allegations of infringement entail more inference than direct evidence of specific works copied. Not that the visual GAIs don’t output literal copies of protected works—they do—but I do not believe a plaintiff has yet filed suit with a body of that kind of evidence.

Interestingly, the evidence presented by the record labels to show that their protected sound recordings were used to train Suno and Udio encompasses a combination of substantially similar copies in the outputs, a measure of inference, and a number of self-incriminating statements by the defendants themselves. This includes the unwise assertion made by every GAI developer that machine learning (ML) is fair use, but I’ll come back to that.

Regarding direct evidence, both complaints cite several examples whereby, with a few general prompts, the systems will output music that is substantially similar to famous songs. “These similarities are further reflected in the side-by-side transcriptions of the musical scores for the Suno file and the original recording. These similarities are only possible because Suno copied the Copyrighted Recordings that contain these musical elements,” the Suno complaint states.

See cover image from plaintiffs’ transcriptions. “Red markings in the transcriptions indicate notes that are the same as the original in both pitch and rhythm, where orange markings indicate notes that use either the pitch or the rhythm of the original, but not both.”

Akin to the NYT and Anthropic cases, the logic holds that if this material comes out of the system, then it was obviously fed into the system. More broadly, inference tells us that millions of sound recordings were used in ML to enable Suno and Udio to so effectively produce a wide variety of music in so many styles. And that’s where the self-incriminating comments come into play.

As has been reported elsewhere, Suno investor Antonio Rodriguez, is quoted in the complaint as saying, “…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.” Yikes. Notwithstanding the questionable claim that copyright infringement is necessary for GAI development, Rodriguez’s statement reads as an admission that of course they willfully infringed copyrights—that he went into the venture knowing he would help finance litigation.

Similarly, Udio’s CEO David Ding is quoted saying that his system needs to “train on a large amount of publicly-available and high-quality music…[the] best quality music that’s out there…obtained from the internet.” As the complaints note, “publicly-available” is a term the GAI companies like to use in PR statements, but this is not synonymous with the “public domain.” Most in-copyright works are publicly available, and Ding’s statement that sound recordings were “obtained from the internet” is, again, acknowledging that unlicensed copying—and a lot of it—occurred for the purpose of training the Udio model.

All Eyes on Fair Use

When the first Gen AI lawsuits dropped, I thought the developers might try harder to claim that no copyright infringement occurs on the basis that what’s happening inside their machines does not “copy” protected works. All that nonsense about machines “learning” the same way human artists learn, when combined with an invisible or complex process, seemed to be leading toward that argument in court. Instead, whether the evidence of copying is too obvious, or the developers are too hubristic, it appears—certainly in this case—that the Gen AI companies are stipulating to a valid infringement claim and jumping straight to a presumption that they will be rescued by a fair use defense.

As mentioned above, and as the complaints note, the assertion of fair use is itself a tacit admission that a prima facie claim of copyright infringement exists. While it will only be fun to unpack the real fair use responses when Suno and Udio submit those documents to the courts, the labels’ complaints already present rationales as to why all four factors disfavor a finding of fair use. Going forward, the fair use discussion will emphasize factors one and four—the purpose of the use and the potential market harm to the works used, respectively.

The most compelling discussion will address the extent to which the courts find that Suno and Udio’s use of the works serve a “transformative” purpose under factor one. Not only will this consideration have major implications for every Gen AI developer, but it will also be the ideological hill on which the pro and anti-copyright forces will clash. The ongoing (if repetitive) debate that pits alleged progress against allegedly outdated copyright law may be won or lost on the transformative test in these cases.

On that subject, both complaints use the language “far from transformative” to describe Suno and Udio—and I agree. Just because Gen AI is novel, or even impressive, these products do not make transformative use of protected works in a manner that furthers the purpose of copyright law, which is to foster, not replace, human authorship. This essential consideration for finding transformativeness is tacitly acknowledged by the Gen AI lobbyists and cheerleaders who insist that “copyright law must change” in for the sake of Gen AI. If the law “has to change,” then clearly, the law does not support the conduct at issue. These and other contradictions will be exciting to follow as these cases proceed.