Hank's IP Brew — Issue #26

Howdy, y'all.

A German court just handed down the first real ruling anywhere in the world on whether AI music training requires a license — and Suno lost. Plus, female athlete NIL participation just doubled in a single year, and the brands driving that surge are household names. Two stories about what happens when the market starts making decisions before the law catches up.

Let's get into it.

On July 31, the Munich District Court ruled against Suno in a lawsuit brought by GEMA, Germany's state-mandated music licensing society. The ruling found that Suno infringed GEMA's represented copyrights by training its AI music model on songs without obtaining licenses or paying the rights holders. Suno has been ordered to disclose revenues from the infringing activity and to pay damages — the amount still to be quantified.

This is the first major court ruling anywhere in the world on whether AI model training on copyrighted music requires a license. Suno lost.

What happened in court

The case centered on six well-known compositions: "Forever Young" by Alphaville, "Mambo No. 5" by Lou Bega, "Daddy Cool" and "Rasputin" by Boney M., "Atemlos" by Helene Fischer, and "Big in Japan" by Alphaville. GEMA's lawyers demonstrated to the court that simply prompting Suno with lyrics, a style, and a title produced audio that was reproducibly close to the originals — nearly note for note in some cases.

But the court didn't actually need the memorization evidence to decide the case. Suno conceded before the verdict that it trained on GEMA's repertoire without paying for it. Its defense rested entirely on the argument that AI training doesn't require a license — that the act of ingesting copyrighted works to build a model is not itself infringement. The Munich court rejected that argument.

GEMA CEO Tobias Holzmüller called it "a verdict of global significance." It's GEMA's second win against an AI company in nine months — the first was a November 2025 ruling against OpenAI over memorized song lyrics in ChatGPT, which OpenAI has appealed.

The extraterritoriality question — and why it matters for U.S. companies

Suno argued the German court had no jurisdiction because its AI model training happened entirely inside the United States. The court disagreed. Its reasoning: Suno's outputs are served to EU users through a platform accessible in Germany, which is enough to subject the company to German copyright law even if the training itself happened elsewhere.

That reasoning has significant implications. It means any AI company with European users — which is essentially every major AI company — could face liability in EU member states for training on copyrighted works without a license - even on on American soil. The "we trained in the U.S. so EU law doesn't apply" defense just took a major hit.

What it means — and what it doesn't

This ruling is not binding on U.S. courts. The Sony v. Suno case in Massachusetts — where the fair use question under U.S. law will be decided — has been pushed to April 2027. American and German copyright law analyze these questions differently, and a German court's conclusion doesn't determine what a Boston federal judge will decide.

But persuasive authority matters. The Munich ruling adds to a growing body of international precedent finding that AI training on copyrighted works is not a free pass. Combined with the November 2025 OpenAI ruling on song lyrics, and the broader landscape of AI copyright litigation in the U.S., UK, and EU, the "train first, license later" model is looking increasingly legally precarious.

For musicians and composers specifically: GEMA represents more than 100,000 creators and 2 million rights holders worldwide. The licensing negotiation leverage this ruling creates is real — GEMA explicitly said its goal was to "get into licensing negotiations on an eye-to-eye level, which was not possible with Suno so far." A court order compelling disclosure of revenues and quantifying damages changes that dynamic significantly.

For creators whose work is being used to train AI models in other domains — visual art, writing, code — the music cases are the leading edge of a broader legal question that is still being resolved. Watch Munich.

In the 2025-26 fiscal year, female athlete participation in NIL activities through Learfield — one of the country's largest collegiate sports marketing companies — grew from 2,136 to 4,772. That's a 123% increase in a single year.

The data comes from Learfield's annual NIL report, released in late July. It covers deals arranged through Learfield's platform across 69 schools, including national campaigns with 260+ athletes. The brands involved are not niche sponsors: Geico, State Farm, EA Sports, Uber, AT&T, Marriott, and SeatGeek all struck deals with college athletes over the fiscal year. Twenty-two national brands in total.

Why female athletes, why now

Solly Fulp, Learfield's head of NIL, offered a direct explanation: "What we're discovering with female student-athletes and their engagement with our brands is they're excellent content creators and storytellers, they're generally social media savvy and they have a genuine brand enthusiasm."

That's not just complimentary language — it's an ROI observation. Brands measure engagement rates, not just reach, and authenticity drives engagement. The athletes who build audiences around genuine interests tend to outperform those executing scripted brand placements. Female athletes in NIL deals have reportedly shown higher engagement rates on branded content, which is translating to more deals and higher deal values.

The sport distribution is shifting too. Women's basketball now ranks third in NIL earnings across all sports, behind only football and men's basketball. Softball has moved into the top five, ahead of baseball. Five years ago, the assumption was that revenue-generating sports would dominate NIL indefinitely. That's changing.

What this means for brands and creators

The Learfield data covers only deals arranged through one platform at a group of schools. The actual market is significantly larger. But the trend it reflects is real: female athletes are not a niche category in NIL anymore.

For brands considering NIL partnerships: the competitive advantage of moving early into female athlete deals is compressing. A year ago, this was an underserved market. The numbers suggest it's becoming a mainstream one. The window for getting in ahead of the crowd — with better terms, more authentic relationships, and higher relative ROI — is narrowing.

For female athletes reading this: the market is validating what smart NIL advisors have been saying for a couple of years — that your value isn't just your sport's viewership, it's your audience relationship. Brands most frequently partnered with female athletes through production shoots, social media content, and ambassador programs. Those deal structures reward engagement and authenticity, not just name recognition. Know what you're bringing to the table, protect your rights in the contract, and don't undervalue it.

One structural note worth understanding: the House settlement's direct revenue sharing (schools can now pay athletes up to $20.5M per year collectively) sits alongside NIL — it doesn't replace it. Third-party NIL deals remain fully available, and the data suggests female athletes are increasingly capturing that opportunity.

See you next time,

Hank

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About Hank's IP Brew

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