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What Music and AI Companies Need to Know

• The Third Circuit held that ROSS Intelligence could not rely on fair use after copyrighted Westlaw headnotes were used to train a competing legal research system.
• The ruling gives record labels useful ammunition on market competition and licensing, particularly as Suno signs licensing agreements with other rights holders.
• But the court expressly distinguished generative AI, and its decision does not bind the Massachusetts judge handling Universal and Sony’s cases against Suno.

By Samuel López | USA Herald

Music companies just received one of their strongest appellate decisions yet in the fight over copyrighted works used for AI training — but it is not the Suno ruling some headlines may make it sound like.

On September 29, the U.S. Court of Appeals for the Third Circuit affirmed Thomson Reuters’ victory over ROSS Intelligence. The dispute involved 2,243 copyrighted Westlaw headnotes copied into training materials for ROSS’s rival legal research platform. The court found ROSS’s use commercial, minimally different in purpose, excessive in amount and harmful to existing or potential licensing markets.

That matters to music because the Recording Industry Association of America and National Music Publishers’ Association deliberately entered the case. Their amicus brief pointed directly to the Suno, Udio and Anthropic litigation and argued that commercial AI companies should not be allowed to copy protected works to build products that compete with those works. Importantly, that was the music groups’ argument — not a blanket rule adopted by the Third Circuit.

The part Universal Music Group and Sony Music may find most valuable is the court’s treatment of licensing.

ROSS argued that Thomson Reuters had not historically licensed its headnotes for AI training. The Third Circuit said that did not erase a developing licensing market. In Suno’s world, that issue is no longer hypothetical. Warner Music Group settled with Suno and entered a licensing partnership in November 2025. BMG followed in August 2026, while Believe and TuneCore announced another Suno partnership in September.

That gives Universal and Sony a simple argument: companies are already paying for access to music for AI development, making the licensing market something a judge can see rather than merely predict.

There is also a major limitation. Footnote 7 of the Third Circuit opinion says ROSS’s system could not generate original expression and distinguishes it from generative-AI models discussed in other litigation. Suno does generate new audio. ROSS also had millions of uncopyrighted judicial opinions available as an alternative training source. Suno can argue there is no comparable public-domain substitute for the commercial recordings needed to teach an AI system how modern recorded music sounds.

How the material was obtained could become another pressure point. The Third Circuit noted evidence that ROSS employees used credentials and accounts in ways the court viewed as bad faith. In Suno’s first Massachusetts case, Suno admitted in a September 1 filing that audio from YouTube was obtained for training using YT-DLP. Universal and Sony’s second lawsuit, filed September 18, adds claims involving 60,202 recordings and alleged circumvention of YouTube protections.

Suno has already lost a related battle overseas. On July 31, Munich Regional Court I largely sided with GEMA in litigation involving six musical works and found infringement tied to training, model storage and generated outputs. That judgment is not final and does not control U.S. courts.

The Third Circuit ruling likewise does not bind the federal court in Massachusetts, which sits in the First Circuit. Judge F. Dennis Saylor IV has pushed dispositive motions in the Suno litigation to June 22, 2027.

So, the central U.S. question remains open. What changed is the starting point. AI companies can no longer credibly argue that placing copyrighted material inside a training pipeline automatically turns copying into fair use. And where an actual licensing market exists, the Third Circuit has now said that market matters.

About the Author

Samuel López is a USA Herald reporter and legal correspondent with more than two decades of experience analyzing state and federal litigation and complex legal matters. His background as a legal analyst gives him a practical perspective on emerging disputes involving artificial intelligence, copyright law and the rapidly developing rules governing AI training.

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