The Munich Regional Court (Landgericht München) handed down a stunning decision today.
The Unsurprising Part of the Decision
The Court’s ruling under German law was not surprising. Like the GEMA v. OpenAI decision, the Munich Regional Court found that Suno, the AI music generator company, committed copyright infringement under German law, including by AI memorization of some works used to train Suno’s AI model. This part of the decision followed closely the prior OpenAI decision. No surprise.
The Stunning Part of the Decision
But the stunning part of the decision was the Munich Regional Court reaching beyond the borders of Germany to rule that Suno’s training of its model in the United States was not a fair use under the U.S. Copyright Act.
Yes, the German Court apparently decided the legality of extraterritorial activity taking place in the United States, not in Germany.
Here’s a summary of this part of the decision reportedly by Juve Patent: “For copying that occurred during training in the US, the court stated that US copyright law applies. The court found that the copies and outputs were not protected by the US fair use doctrine. It distinguished this case from the Bartz and Kadrey decisions in the US, where courts found AI training to be fair use largely because the original training materials were not reproduced for users in the outputs. By contrast, in the GEMA against Suno case simple prompts led to outputs that were substantially similar to the original musical works.”
I don’t have a copy of the opinion yet, but I suspect it will draw the interest of the U.S. government.
Countries do not typically decide the legality of conduct that took place outside their borders. Due to the principles of territoriality and comity, countries leave those decisions to the respective country where the activity occurred. There are rare exceptions to this general approach, but countries are wary of allowing them.
Indeed, consider the EU’s own argument in the U.S. trademark case, Abitron Austria GMBH v. Hetronic:
