The music business is within the grip of an intensifying debate over how AI-generated derivatives of present music needs to be created, licensed, and monetized.
Common Music Group has been on the heart of that debate. The corporate has championed a “walled backyard” mannequin for AI derivatives, central to its settlement with Udio final October, the place AI-generated music can’t be downloaded or distributed outdoors the platform on which it was created.
Michael Nash, UMG’s EVP and Chief Digital Officer, has argued that with out such restrictions, AI derivatives threat permitting customers to “successfully use artists’ content material and their model to create derivatives the place you’re going to compete with the artist on different platforms.”
That place has put UMG at odds with AI music platform Suno, whose Chief Music Officer Paul Sinclair has advocated for “open studios, not walled gardens.”
UMG and Sony Music proceed to pursue litigation in opposition to Suno, whereas Warner Music Group struck a cope with the platform in November that preserved customers’ capacity to obtain their creations.
In the meantime, the demand for AI spinoff instruments is constructing from the platform aspect. In February 2026, Spotify Co-CEO Gustav Söderström stated the streaming big’s know-how to let followers make AI-generated remixes and covers was “prepared,” however that “the absence of a rights framework” was holding issues up.
In opposition to that backdrop, an entity linked to UMG has been constructing a patent portfolio round AI-music infrastructure, via a partnership with IP asset administration, funding, and advisory agency Liquidax Capital. The know-how, relying on how it’s commercially deployed, may doubtlessly help a so-called ‘walled backyard’ method to AI-generated music derivatives, amongst different attainable functions, which at the moment stay unclear.
In July 2025, UMG introduced a strategic partnership with Liquidax, led by CEO Daniel Drolet, to speed up the event and licensing of music-related AI patents.
A brand new entity, Music IP Holdings, Inc. (MIH), was fashioned to license the know-how into the worldwide market. UMG stated on the time that it had filed 15 patents with Liquidax throughout fields together with musical collaboration, multimedia content material creation, AI risk safety, and rights administration.
By November 2025, MIH had opened a headquarters on Nashville’s Music Row, with Drolet serving as Chairman and CEO. In a press launch asserting the growth, the corporate stated it held “greater than 60 protected improvements with quite a few extra know-how households and portfolios underneath improvement” — a major growth on the 15 filings disclosed 4 months earlier.
MBW has obtained three of these patent filings and reviewed them intimately. The filings are assigned to MIH, to not UMG instantly, and neither MIH nor UMG has publicly disclosed whether or not or after they intend to make use of or license the described know-how, or to whom.
Right here’s what the filings describe…
‘AI-GENERATED MUSIC DERIVATIVE WORKS’
This submitting seeks to deal with the core copyright downside posed by AI skilled on and used to remix present music.
The invention the patent claims is a system constructed round artist approval. A person asks the AI to remodel a copyrighted monitor, the system checks whether or not the rightsholder would approve, and if it passes, the output will get a digital watermark and is launched underneath phrases the rightsholder has set.
Filed on October 24, 2024 and granted on June 3, 2025, that is the earliest-granted patent within the household. It initially listed Daniel Drolet as the only real inventor.
A subsequent expanded continuation, assigned to MIH and at the moment pending, was filed in August 2025 and provides Chris Horton, Jeremy Uzan, and Sion Elliott as co-inventors alongside Drolet. The three are recognized on LinkedIn as EVP, Strategic Know-how at UMG; Director, AI and Superior Know-how at UMG; and Director, World New Enterprise Technique at Common Manufacturing Music, respectively.
You possibly can learn the continuation right here and the unique granted patent right here.
The summary within the up to date continuation submitting describes “a system and methodology for creating AI-generated spinoff works from predetermined content material with copyright compliance and content material proprietor management”.
It provides that “in some features, the system receives predetermined content material and a user-requested transformation theme, then employs generative synthetic intelligence to create a spinoff work. The system might allow scalable rights administration for AI-generated content material throughout music, video, textual content, and different media codecs.”
It describes spinoff works as “creations which can be primarily based on a number of predetermined works” and warns that AI-generated variations “might infringe on the rights of the creator or copyright holder of the predetermined work, via replica and transformation with out permission” and “could also be adversarial to preferences of the creator or copyright holder of the predetermined work.”
Within the submitting’s personal language, the strategy covers “receiving a request to remodel the predetermined content material right into a spinoff work, receiving a requested theme for the spinoff work, utilizing generative synthetic intelligence to create the spinoff work generated as a operate of the predetermined content material and the requested theme, figuring out if the generated spinoff work is authorized primarily based on a machine studying mannequin configured to find out a content material approval rating as a operate of content material proprietor preferences, in response to figuring out the generated spinoff work is authorized, making use of a digital watermark to the authorized spinoff work, configuring an authorization server to manipulate use of the authorized spinoff work primarily based on the digital watermark and offering person entry to the approved spinoff work.”
The person’s directions to the AI may be gathered conversationally. The submitting states that “the requested theme could also be decided utilizing a Giant Language Mannequin (LLM) and a chatbot interview.”
Watermarks may expire, giving rights holders a approach to handle how lengthy a spinoff stays approved. The submitting states that “the authorization server could also be configured to revoke, or not renew, approval for a spinoff work, primarily based on permitting the watermark embedded in a spinoff work to run out.”
‘MULTI-STAGE APPROVAL AND CONTROLLED DISTRIBUTION OF AI-GENERATED DERIVATIVE CONTENT’
Filed on Could 2, 2025 and granted on September 23, 2025, this submitting, which you’ll be able to learn right here names Chris Horton, Jeremy Uzan, Sion Elliott, and Daniel Drolet as inventors. It builds on the earlier-granted patent, with broader claims.
The place the sooner patent establishes the bottom system, this one tackles a unique downside: easy methods to construct approval logic that displays the artist’s personal preferences at each ends of the artistic course of.
The submitting describes a way that mixes a machine-learning method with “predefined rule units established by content material house owners that specify permissible and/or impermissible transformations for particular content material” — the 2 can function “both individually or together, to accommodate completely different content material proprietor preferences and use circumstances.”
The core addition is a two-stage approval course of: one examine earlier than the AI generates something, one other examine on the completed output.
The submitting refers to “pre-generation choice information” and “post-generation choice information” related to a “content material authority” — outlined broadly as “any entity having authentic management, decision-making energy, or governance rights over digital or artistic content material and its permissible transformations,” together with “a pure individual (comparable to an artist, creator, or designated particular person)” in addition to authorized entities and rights administration organizations.
The submitting provides a concrete instance of how the approval system displays artists’ private values: “If an artist is vegetarian and doesn’t need their voice or type for use in songs about meat consumption, this choice may be captured by their label forward of time and supplied to the content material derivation platform. This enables filtering to happen each on the immediate degree and on the output degree, making certain alignment with the content material proprietor’s values all through the creation course of.”
“If an artist is vegetarian and doesn’t need their voice or type for use in songs about meat consumption, this choice may be captured by their label forward of time and supplied to the content material derivation platform.”
excerpt from Music IP Holdings patent submitting
Artist consent can be constructed into voice-substitution claims throughout the submitting. The submitting describes a characteristic that lets customers “exchange the lead vocals in an present recording with the voice of one other artist who has consented to such transformations” — and notes that “the choice motion itself might set off the attribution and remuneration system, which ensures applicable compensation to each the unique and substitute artists.”
Rejected requests can include a proof. The submitting describes “a remediation report when a spinoff work fails to fulfill approval standards”, analyzing what precipitated the failure so the person can strive once more.
The patent additionally units out how distribution controls can forestall unauthorized use of derivatives on third-party platforms. Associate platforms together with streaming companies, social networks and distribution aggregators “could also be contractually required to scan incoming content material for the presence of such markers, and take automated enforcement motion primarily based on the encoded guidelines.”
The submitting additionally describes “context-restricted playback, the place reworked works are solely accessible throughout the authorized media atmosphere” — one in every of a number of distribution configurations the patent covers, however one which sounds quite a bit just like the ‘walled backyard’ method championed by UMG. Not one of the filings use the time period ‘walled backyard’.
The submitting additional describes automated income distribution, with “a wise contract that robotically allocates income from every approved distribution of the spinoff work to stakeholders recognized within the utilization registry”, triggered “every time the digital identifier is verified throughout a streaming session.”
The rights framework the patent describes has parts in widespread with the type of infrastructure Söderström recognized as at the moment lacking — although the submitting makes no reference to Spotify or some other platform, and MBW has no info on industrial discussions between MIH and any streaming service.
‘AI-GENERATED DERIVATIVE CONTENT SCALING FOR MERCHANDISE’
Filed on October 3, 2025, this pending submitting names Horton and Uzan as inventors.
This submitting, which you’ll be able to learn right here, tackles a unique industrial downside: easy methods to prolong the identical approval-and-watermark system past audio into bodily and digital merchandise. It applies to “AI-generated album art work derivatives, attire designs, posters, and digital items”, all underneath the identical governance framework because the audio filings.
The fan-facing aspect of the system is designed round a five-step journey on a cellular app. The fan first picks a supply asset — lyrics, moments from a music, or themes linked to an artist. The AI then generates a set of design variations. The fan picks one, customizes it by adjusting colour, dimension, and place, and sees a real-time preview rendered both as a bodily product or in augmented actuality. On the ultimate step, the fan chooses to purchase or save.
Behind the app sits a backend that pulls from a library of artist reference supplies — artist logos, artist fonts, lyrics and textual content, album artwork, and tour visuals (see illustration beneath). That is the curated set of artistic property the rightsholder makes accessible for followers to remix.
The fan’s request passes via two AI elements. A “information agent” checks it in opposition to the rightsholder’s model tips. An “motion agent” then runs the generative AI and produces the design. The design then goes via an approval examine: if it fails, it’s rejected (a T-shirt studying “Music is simply noise!” within the submitting’s personal illustration); if it passes (a T-shirt studying “Stage is my canvas”), it strikes on to achievement.
From there, the system splits in two. Bodily merchandise is routed to a “print agent” that feeds a print-on-demand accomplice, and a “store agent” that lists the product on an e-commerce storefront. Digital merchandise takes a separate path to a 3D rendering engine and metaverse platforms — the place, within the submitting’s illustration, an avatar is proven carrying the AI-generated design inside a digital atmosphere.
Each tracks feed right into a contract that distributes income to stakeholders. One authorized design can turn out to be a bodily T-shirt, an e-commerce itemizing, and a wearable merchandise inside a metaverse — with automated royalty funds routed on the finish.
The submitting additionally describes the platform working in actual time throughout dwell occasions, with concert-synchronized merchandise era pulling in information concerning the music being performed, stage visuals, lighting, crowd engagement, and venue location to provide context-specific gadgets. Fan co-creation interfaces examine every modification in opposition to model guidelines in actual time. Authentication combines bodily parts like holographic tags or QR codes with embedded digital identifiers.
The three publicly accessible filings reviewed right here characterize solely a fraction of what MIH says it’s constructing.
The corporate’s declare of greater than 60 protected improvements suggests the portfolio extends effectively past the spinoff works household into the opposite fields UMG has referenced, including musical collaboration, music and well being, and AI risk safety.
UMG’s Michael Nash publicly referenced the corporate’s AI patent exercise in remarks on the HumanX convention on April 8.
“With respect to leaning into innovation too, to display to artists that we’re targeted on directing our assets to additionally create options, we’ve developed a lot of AI patent functions,” Nash stated. “One good instance can be by way of well being and wellness. We developed a course of that’s enabled by AI which helps our unique participation within the Sound Remedy class on Apple Music.”
MBW has beforehand reported on a separate UMG patent submitting overlaying AI-generated binaural beats.
On UMG’s Q2 2025 earnings name final July, Chairman and CEO Sir Lucian Grainge famous that the know-how underpinning Sound Remedy just isn’t the one tech constructed in-house utilizing AI.
He added that the corporate had been creating AI-powered know-how since 2020 “to help artist advertising, analytics and distribution”.
He described the Liquidax partnership as the subsequent step: “To speed up and scale the event of our patents, we not too long ago partnered with Liquidax Capital, an IP asset administration investing advisory agency,” Grainge stated, acknowledging that “Liquidax, on our behalf, has already filed 15 patents within the fields of musical collaboration, multimedia content material and marketing campaign creation, AI risk safety, music administration and rights administration.”
He added that UMG’s “significantly expanded patent portfolio can then turn out to be a catalyst to speed up introduction of merchandise to {the marketplace}.”
UMG has declined to remark additional, and the complete plan for the tech described within the filings above stays unclear.Music Enterprise Worldwide
