If you saw the adverb “forever” in a contract, would it give you pause?  It would me—I would wonder who allowed that to slip through.  As text-to-audio generative AI models desperately try to normalize their shoot-ready-aim ingestion of likely stolen works to support their next round of financing (or in some cases perhaps a VC exit by IPO), it’s likely that we will see some efforts at “licensing” reminiscent of the Napster era. “Licenses” that actually paper over the main act—stop the lawsuit before they start. What will that look like and what should we look for buried in the not so fine print?

Generative AI companies are coming to the negotiating table with “music licensing agreements” (and probably other artists’ too). That sounds encouraging — it suggests they want to do the right thing and pay for the content they use. Trust me, they don’t. What they want is to get away with it.

Not every document titled “license” actually functions like one. Some of these deals are better described as litigation insurance dressed up in licensing language, and if you sign one without reading the small print, you may be giving away far more than you realize. Because as Tom Waits taught us in the classic Step Right Up, the large print giveth and the small print taketh away.

Here’s a practical checklist of red flags to watch for if you want to look past the hype:

☐ Check Whether the “License” Actually Includes a Perpetual “Covenant Not to Sue”

A quick definitional note: a covenant not to sue is a contractual promise in which you agree in advance never to bring a legal claim against the other party — regardless of what happens, regardless of whether you even know you have a claim, and often regardless of whether the conduct at issue would otherwise be something you could sue for or get a court to stop (like with an injunction). Unlike a license, which grants permission and can expire, a covenant not to sue can be a permanent waiver of your right to seek a remedy. It’s the difference between handing someone a key to your house and signing a contract promising you’ll never call the police no matter what they do inside.

A real license gives someone permission to use your work under defined conditions, and when the term ends, so does the permission. Watch out for agreements that include a separate clause in which you irrevocably promise — both during and after the term — never to bring any claim against the company or even its users. If the covenant not only covers copyright, publicity rights, moral rights, defamation, and lawsuits over issues that may not exist yet, you are not licensing your work. You are surrendering your right to enforce your rights, permanently. Or you know, “forever.” Make sure you understand the difference before you sign.

☐ Beware a “Non-Exclusive” License That Binds Your Co-Writers

Remember the 100% licensing debacle back in 2016? Tenants-in-common co-ownership of a copyright means any co-owner can grant a non-exclusive license without the others’ consent — but that principle can be weaponized. If an agreement requires you to represent and warrant that no third-party consent is needed, and that you will not encourage your fellow songwriters to take any position inconsistent with the deal (again with the censorship), you may be dragging your co-writers into an arrangement they never agreed to. Worse, if the covenant not to sue extends to all contributors, your co-writers’ enforcement rights could be compromised by a deal they had no say in. Before you sign, make sure the AI platform isn’t leveraging TIC principles to bind people who aren’t at the table. Here’s why this matters in practice: under TIC co-ownership, a non-exclusive license granted by one co-owner is generally binding on all co-owners, even without their consent. That means if you grant a non-exclusive license — or, more critically, a covenant not to sue — covering the full composition, your co-writer may be unable to bring an infringement claim against the same company for the same use, because the company can point to your grant as a complete defense. The co-writer’s right to sue isn’t technically extinguished, but it’s rendered practically worthless. The result is that one publisher’s signature can neutralize enforcement rights across an entire song’s ownership chain. Ask your lawyer.

☐ Look for a Sweeping Pre-Signing Release

Some agreements bury a broad release of all claims arising before the effective date — known and unknown, suspected and unsuspected. That’s not a license, it’s a preemptive settlement masquerading as a license.  Worse, they may ask you to preemptively waive protections like California Civil Code Section 1542, which exists specifically to protect people in this exact situation. The statute prevents people from accidentally releasing claims they don’t yet know about. If an AI company has been training on your catalog without permission for years, a release like this could function like a contractual safe harbor and eliminate any leverage you had to seek compensation for that unauthorized use, or better yet an injunction. You know, kind of like the Music Modernization Act.  Ask yourself: why does a forward-looking license need a backward-looking release? Aside from wanting a pony.

☐ Make Sure “Training Rights” Aren’t Irrevocable in Practice

A license to include your works in a training corpus sounds civilized, but look closely at the removal mechanics (and take a class in “machine unlearning“). If the company is only required to retrain its model a limited number of times per year — say, twice — then even if you pull your catalog, your works may remain embedded in the AI model for months or even “forever”. There are no guarantees that “retraining” will actually remove your works from the model and, in fact, the literature suggests it won’t. And if the covenant not to sue survives the term for anything created while the deal was active (or before the deal was active), the training that already happened is effectively locked in. You may be inadvertently granting a right for yourself and maybe your co-writers that you can never meaningfully take back.

☐ Don’t Pre-Approve a Statutory Streaming License They May Not Be Entitled To

Some AI music platforms aspire to become full on-demand streaming services — and their agreements may include language contemplating exactly that expansion, with provisions stating the company will simply obtain a blanket mechanical license from the Mechanical Licensing Collective under 17 U.S.C. § 115(d). But whether a generative AI platform that creates synthetic music qualifies for the statutory compulsory license designed for traditional on-demand streaming is a genuinely open legal question. If you agree to terms that treat this expansion as a foregone conclusion — or worse, if your covenant not to sue or conditional authorization greenlights streaming functionality by default — you may be conceding the argument before it’s ever litigated. Don’t let an agreement’s assumptions about statutory eligibility become your assumptions. That question should be tested, not waived.

There’s a deeper problem here, too. The Section 115 compulsory license has always contained an anti-piracy prerequisite: you cannot obtain a compulsory license to use a musical composition if the sound recording you’re working from was not lawfully fixed or authorized by the sound recording’s copyright owner. If an AI platform trained its model on sound recordings it ingested without authorization (as is currently being litigated), its entire statutory license theory may be built on a foundation of infringement. The compulsory license was never designed to launder unauthorized use of sound recordings into lawful use of the compositions they embody. By agreeing to terms that treat the platform’s eligibility as settled, you may be implicitly conceding that the platform’s use of those sound recordings was authorized — a concession likely worth far more than anyone is probably paying for it and that can get you sideways with the sound recording owners.

☐ Scrutinize “Guardrail Failure” Safe Harbors

Technical safeguards — input filters, output filters, vocal classifiers — are only as good as the consequences for failure. Be wary of provisions that excuse the AI company from breach liability when its guardrails fail, so long as the failures are characterized as “inadvertent” and “de minimis” which are in the eye of the beholder and just buying a lawsuit.  If the agreement treats guardrail failures as non-breaches by default, you’ve effectively agreed that the company can produce unauthorized outputs of your works without meaningful accountability, as long as it promises to try to fix the problem after the fact with no stick if it fails.

☐ Watch Who Owns the AI Model — and Learned “Insights”

Ownership clauses in AI agreements often go further than you’d expect. The company may claim ownership not just of the AI model, but of all “insights” it learns which can be damn near anything. That “learning” is including those developed using your content. That language could be read to mean that everything the AI extracts, learns, or derives from your catalog belongs to the platform. Make sure you are not inadvertently ceding ownership of the creative intelligence embedded in your works.

☐ Don’t Let a Third Party’s Binding Calculation Determine Your Payment

I am no fan of market share revenue share deals, particularly when the revenue pool is a fixed number. Some revenue pool deals delegate the calculation of your market share — and therefore your payment — to a third party, and then declare that calculation to be binding on you, even if you had nothing to do with calculating either your market share (under the “license” not in general) or your share of the revenue or minimum guarantee. If you have no right to challenge the methodology or the math, or to audit that third party, you could be found to have agreed to be paid whatever someone else decides you’re owed, with no recourse if they get it wrong.

☐ Trace the Revenue Through Every Deduction Before Celebrating the Rate

A headline royalty rate means nothing if it’s applied to a revenue base that has already been carved down by layers of deductions including off the top fees, advertising costs, technical fees, inference compute costs, app-store commissions, performance royalties, and more. Each deduction may sound reasonable in isolation, but stacked together, they can reduce the revenue pool to a fraction of what you’d expect. Always model your actual payout, not just the stated percentage.

☐ Beware Conditional Authorizations That Expand the Deal Without Your Active Consent

Some agreements include provisions for future features such as API access, enterprise customer pricing, new product versions, downloads, or interactive streaming that automatically activate once a majority of other rightsholders sign on. If the trigger is what other labels or publishers do rather than what you approve, you may find that the scope of the license has expanded well beyond what you agreed to, without any additional negotiation or compensation.  And remember what they say about if everyone else was running off a cliff.

☐ Censorship Clauses: Don’t Agree to Never Contradict the Deal

Representation and warranty sections sometimes include a covenant that you will not take, or encourage your artists or songwriters to take, any position at any time (whether during or after the term and whether or not truthful) that is inconsistent with the hoorah narrative about AI or the applicable license. Read that carefully. It could be interpreted to prevent you — or your writers — from ever publicly criticizing the deal, advocating for stronger protections, or supporting legislation that conflicts with the agreement’s framework, even years after it expires even if the AI platform is in breach.  Aside from censoring your freedom of speech, this has nothing, and I mean nothing, to do with a license.

☐ Understand What Walled Garden Actually Means for Your Writers

A service that restricts AI-generated content to a “walled garden” with no downloads sounds contained. But if users can generate unlimited content using your works, share tracks or links to tracks across social media, and the company retains the right to expand into other product lines (including non-AI product lines like an on-demand streaming service) all within the same agreement, any “walled garden” may be pretty ephemeral.

☐ Confirm That Your Minimum Guarantee Is Actually Guaranteed

A minimum guarantee that is “fully recoupable” against future royalties is not a floor — it’s an advance. If the service underperforms, you keep the advance, but if it succeeds, the guarantee is just an interest-free loan. Make sure you understand whether the guarantee represents real minimum compensation or simply front-loaded royalties you would have earned anyway. Also, plan for both failure and success—if you’re a publisher or label, how on earth are you going to be able to account to your songwriters or artists while you’re recouping any minimum guarantee or afterwards?

☐ Demand Flow-Down Protections in the Platform’s Terms of Service

An AI platform’s Terms of Service are where your contractual protections actually meet the end user — and if the ToS doesn’t carry your rights forward, your rights may exist only on paper, if at all. Before you sign, confirm that the agreement requires the platform’s user-facing ToS to include, at a minimum:

• An ownership disclaimer — users must acknowledge they acquire no copyright or ownership interest in AI outputs that embody your works.
• A reverse-engineering prohibition — users must be prohibited from extracting, reconstructing, or isolating your works from the model’s outputs.
• A downstream training restriction — users must be barred from using AI-generated outputs containing your works to train their own AI models.
• User indemnification that flows to you — if a user misuses your works, you shouldn’t have to rely solely on the platform to make you whole.
• A meaningful commercial-use definition and enforcement mechanism — if the deal says “personal, non-commercial use only,” the ToS needs to define what that means and impose real consequences for violations, not just account revocation. Remember, “non-commercial” has been used for text and data mining exceptions in various countries that are huge and unintended exceptions to copyright.
• An anti-circumvention clause — users should be explicitly prohibited from attempting to bypass input/output filters and guardrails, not just prevented by technology that may fail.
• Publisher review and approval rights over ToS language — if the agreement references ToS protections as part of your deal, you should have the right to review and approve the actual language implementing them.

If the platform isn’t required to flow these protections down to users, then the guardrails in your agreement are a ceiling, not a floor.

☐ Ask Whether Any Other Rightsholders Are Getting Equity — and Whether You Are, Too

If the agreement includes an MFN clause promising you’ll receive the “most favorable economic terms” offered to any other licensor, ask the obvious follow-up: are large rightsholders receiving equity stakes in the AI platform as part of their deals like the majors and Merlin did with Spotify? We’ve seen this movie before. When streaming platforms launched, labels negotiated equity positions that dramatically increased the total value of their agreements — value that was never shared with publishers or songwriters. If an AI company is offering stock, warrants, or other equity consideration to labels while offering publishers only cash royalties and a minimum guarantee, then the MFN clause is cosmetic. The “most favorable economic terms” aren’t favorable at all if they exclude the most valuable component of the deal. Before you accept the premise that you’re being treated equally, ask what the royalty rate would look like if nobody were getting equity. That’s the number that tells you whether the cash terms are fair on their own — or whether they’re subsidized by equity you’ll never see.

Now What: When an AI company presents you with a “licensing agreement,” read it like a litigator, not a dealmaker. (When presented with a contract, dealmakers look at the money, litigators look at the remedies.). The title of the document matters far less than what’s inside it. If the agreement includes a perpetual covenant not to sue, a retroactive release of claims, and an ownership clause that captures everything the AI learns from your work, what you’re being offered isn’t a license — it’s capitulation with a royalty attached.

Know what you’re signing. Read it yourself, don’t buy the hoorah.