A US Appeals Court Just Handed Music Its Best AI Argument Yet

If you own copyrights and you have been watching the AI cases pile up, you have probably felt a familiar dread: district judges keep splitting the baby, and every fair use ruling lands with an asterisk. One court says this, another says that, and none of it binds anyone. That uncertainty is the fog AI companies have been happy to hide inside.

The fog just thinned. A federal appeals court has now ruled, at a level that actually sets precedent, that copying copyrighted material to build AI training data is not fair use. For rights holders, this is the first appellate line drawn in the sand, and it points straight at the companies you are already fighting.

The US Court of Appeals for the Third Circuit sided with Thomson Reuters, the owner of legal research platform Westlaw, in its long-running suit against Ross Intelligence, a now-defunct startup that built a rival search tool using Westlaw's editorial summaries, as Music Business Worldwide reported. This is not a music case. But the reason it matters to music is sitting right in the docket.

The Recording Industry Association of America and the National Music Publishers' Association filed a joint amicus brief in the case, telling the court flatly that training an AI model on copyrighted works to create a competing service or product "cannot qualify as fair use." They filed it on November 25, 2025, per MBW, through Jonathan Z. King of Cowan, Liebowitz & Latman. The industry's two biggest trade bodies put their names on this fight, and they won.

What the court actually did

The judgment affirms the district court's February 11, 2025 order and directs Ross Intelligence to cover Thomson Reuters' appeal costs. Back at the trial level, Judge Stephanos Bibas, sitting by designation in Delaware federal court, had granted partial summary judgment to Thomson Reuters and tossed the fair use defense. Bibas later certified two questions for appeal: whether the Westlaw headnotes and Key Number System are original, and whether Ross's use of the headnotes was fair.

The Third Circuit's opinion runs 32 pages and, crucially, is marked precedential. That is the whole story. A precedential ruling binds district courts across the circuit once it is unsealed. It was authored by Judge Tamika Montgomery-Reeves, who sat with Luis Felipe Restrepo and Emil Bove.

One caveat worth stating plainly: the opinion itself is still under seal, MBW noted, and the parties have 10 days to propose redactions before the court decides whether to make it public. So we know the outcome and we know it carries binding weight. We do not yet have the full reasoning. That matters, because the how of an opinion can narrow or widen its reach. Read the fine print when it drops.

Why this lands on Suno and Udio

Every AI music defendant has leaned on the same posture: scrape everything, worry about permission never, and argue fair use if anyone complains. The RIAA and NMPA brief went straight at the scale of that scraping. It quoted Suno's own answer in the case brought by Universal Music Group and Sony Music in Massachusetts federal court, in which Suno said its models were trained on "essentially all music files of reasonable quality that are accessible on the open Internet."

That is a confession dressed as a defense. And now an appeals court has said, in a neighboring context, that copying protected work to build a competing product does not get a fair use pass. The precedent does not automatically decide the Suno or Udio cases, and the Massachusetts suits sit in a different circuit. But it is exactly the appellate authority the labels have been missing, and it strengthens the negotiating hand behind every pending suit.

The output side of the problem is not slowing down. The brief cited Deezer's November 2025 disclosure that it was receiving over 50,000 fully AI-generated tracks a day, more than 34% of its daily deliveries. That number has since climbed. Deezer reported in July that it took in nearly 90,000 fully AI-generated tracks daily, per MBW. The models trained on your catalog are already flooding the pipes you get paid through.

The other half of the play

Litigation is the stick. Licensing is where the money gets sorted, and the independent side is already fighting over the terms. Independent publishing bodies Impel and IMPF set out AI licensing principles, Music Ally reported, with one line aimed as much at labels as at AI companies: "the song must be properly valued and, absent other salient factors, at least equally with the recording." Any model that treats publishing as a minor share while handing the master rights the majority of revenue, they said, is "unacceptable."

That is the real tell. The industry now believes it will get paid. The Third Circuit just made "scrape first, license never" a losing legal position, which means the fight moves to who gets what. Songwriters are already staking their claim before the checks are even printed.

One appellate ruling does not win the war. But for the first time, the people arguing that training on your work is free have to explain themselves to a court that has already said otherwise.

Sources

• Music Business Worldwide
• Music Ally