German Court Decides U.S. Copyright Claims

 

Munich Justizpalast

By Burkhard Mücke – Own work, CC BY-SA 4.0

The training of artificial intelligence (“AI”) models on copyrighted works, such as books, articles, and songs, has produced disputes about the legality of the use of the works for such a purpose if the training occurs without permission or a license from the copyright owners. Copyright owners and their representatives have now sued AI companies in the courts of several countries, alleging that the companies had infringed copyrights through the training and deployment of the AI models. Some commentators have already noted that these cases might generate complex choice-of-law issues because the training of AI models, including the collection of the training materials, and the deployment of the tools based on the models have often stretched across national borders (e.g., here and here).

Standard conflict-of-laws rules would suggest that a U.S. AI company would be unlikely to face a claim for violating U.S. copyright law in a court outside the United States; a foreign court would only have specific jurisdiction over the U.S. defendant, which would limit the court to deciding infringement that had occurred only within the court’s own country and, given the wide acceptance of the principle of lex loci protectionis for copyright infringements (law of the country for which protection is claimed), result in the foreign court applying its own country’s copyright law to the infringement. The AI companies could face other legal challenges stemming from their activities, such as liability under the AI Act in the European Union, but they should not face liability for copyright infringement under U.S. law in courts outside the United States for their activities in the United States. However, a different situation transpired in GEMA v. Suno, a case decided on July 31, 2026, by a panel of the District Court of Munich.

The Case

GEMA, the Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte, is a German collective management society that represents more than 100,000 composers, lyricists, and publishers in matters pertaining to copyright to their musical works. In 2025, GEMA filed a lawsuit in the Munich court against Suno, a U.S. company that offers an AI music generator; in the suit, GEMA alleged among other things that Suno had infringed copyrights both in the United States, where Suno reproduced the copyrighted works (fully or partly) for the purposes of training its AI model, and in Germany, where Suno reproduced (fully or partly) the copyrighted works in the AI model and also made some of the copyrighted works publicly available by allowing them to be incorporated into the AI-generated output. Because Suno had no permission or license to do any of these acts, GEMA claimed that the copyrights to the works were infringed in the United States and Germany, under U.S. copyright law and German copyright law, respectively. The case and the July 31, 2026, judgment by the Munich court generated much attention, at least in part because of the court’s decision that the European Union’s exception for text and data mining did not cover Suno’s acts at issue in the case. But the judgment is also noteworthy from a conflict-of-laws perspective.

The First Surprise

The main surprise of the decision might be that a U.S. entity could be sued in a German court for infringement of a copyright that was supposed to have occurred outside of Germany; because the German court would have only specific jurisdiction over the U.S. defendant, it would not be expected to adjudicate infringements committed outside of Germany. Such a result would indeed be the rule under section 32 of the German Code of Civil Procedure, which vests specific jurisdiction in the court in the place of a tort (the EU Brussels I Regulation (Recast) does not apply because Suno is not domiciled in the EU), but in this case the court turned to section 131 of the German Act on the Management of Copyright and Related Rights by Collecting Societies, which gives, in copyright infringement cases brought by a collective management society, exclusive jurisdiction to a court in the place where the infringing acts were initiated or to the court in the place of the collective management society, and affords such courts jurisdiction to adjudicate all claims that the collective management society may bring against the same infringer. The court thus recognized the principle of dual functionality (“Doppelfunktionalität”), according to which international jurisdiction may be inferred from the rules on local jurisdiction.

The generous jurisdictional scope that the collective management societies enjoy under German law in these types of cases is emblematic of a German pro-author copyright policy, which seems consistent with a system where copyright not only always vests in authors who, under German law, are always natural persons, but also remains with the authors because it is non-assignable. The German system, which regards copyright owners/authors as the weaker parties, is thus quite different from some other copyright law systems, such as the system in the United States, where copyright is often owned by entities, either because copyright initially vested directly in an entity or because an author assigned copyright to the entity. Another example of a pro-author jurisdictional rule exists in France, where strong copyright protection is afforded to authors, even though the economic rights from copyright are assignable; section L132-24 of the French Intellectual Property Code provides for jurisdiction of French courts in cases when an author of a musical work that was incorporated into an audiovisual work, or an assignee of the copyright to such work, enforces the rights under certain internationally-mandatory provisions of the Code.

The Second Surprise

The second conflict-of-laws-related “surprise” of the GEMA v. Suno judgment, which flows logically from the first, is that the Munich court applied U.S. copyright law to the acts that the U.S. defendant committed in the United States. The court’s 137-page judgment included 31 pages analyzing U.S. copyright law and its application in the case. The court relied on the U.S. Copyright Act and U.S. Supreme Court opinions in copyright cases, including Warhol v. Goldsmith (2023). The court cited other important authorities, including several key copyright decisions by lower U.S. courts and the major copyright law treatises Goldstein on Copyright and Nimmer on Copyright. It was impressive that the court not only referred to, but actively engaged with, two U.S. district court decisions rendered only last year in Bartz v. Anthropic and Kadrey v. Meta—cases that involved alleged copyright infringements by generative AI companies. Although disputes have already arisen about the merits of the Munich court’s decision, and particularly its assessment of the fair use defense under U.S. law, it is indisputable that the Munich court had good access to information about, and a solid understanding of, U.S. law.

With respect to other choice-of-law matters, the court referred to the U.S. Copyright Act’s provision on standing in section 501(b) and applied German law (under Article 4(2) of the Rome I Regulation) to assess whether GEMA had the right to represent the authors based on its contract with the authors, and whether GEMA had standing to bring the U.S. law-based claims. For purposes of the U.S. law-based claims, the court assessed the protectability of the works at issue under U.S. copyright law and, following its holdings that Suno had infringed copyright under U.S. law and that Suno’s actions were not covered by the fair use defense, the court decided, with respect to the U.S. law-based infringements, the question of damages under U.S. law and also the availability of an injunction under U.S. copyright law and U.S. principles of equity.

The idea that a German court would apply U.S. copyright law to adjudicate U.S.-based actions of a U.S. defendant might be remarkable to some, but the reality is that German law seems to permit this outcome in cases brought by collective management societies.

Conclusion

Conflict-of-laws issues in copyright cases are neither new nor limited to the jurisdictional and choice-of-law issues raised in GEMA v. Suno; cross-border cases involving copyright infringement pre-date significantly the current wave of lawsuits against AI companies. After an attempt at an international treaty, studies commissioned by WIPO, and a series of academic projects, the International Association for the Protection of Intellectual Property (AIPPI) made jurisdiction and the choice of law applicable in cross-border online copyright infringement cases the focus of its Study Question 299, which will be discussed at the AIPPI World Congress in October 2026 with the goal of adopting a resolution on the matter. Whether the issues, particularly if they are propelled by interest from AI companies, can move beyond the major disagreements among countries on jurisdiction in IP matters that were apparent in the discussions of The Hague Conference’s Jurisdiction Project, is as yet unknown.