AI Law Wiki News for August 25, 2026

August 25, 2026 — The company that controls the late Carl Sagan’s intellectual-property rights sued AI startup Luma AI in California federal court, alleging unauthorized use of an audio clip from Sagan in an advertisement. California lawmakers also completed final approval of AB 2025, AB 2656, and SB 503, ordering the three AI-related measures enrolled. UMG and Sony also filed an amended complaint against Suno adding a DMCA anti-circumvention claim based on alleged YouTube stream ripping. The Seventh Circuit affirmed dismissal of a federal charge based solely on private possession at home of obscene AI-generated sexual images depicting fictional children, while leaving separate production, distribution, and transmission charges pending.

Contents

1. Carl Sagan’s estate sues Luma AI over alleged unauthorized voice use
2. California gives final approval to three AI-related bills
3. UMG and Sony add DMCA stream-ripping claim against Suno
4. Seventh Circuit affirms dismissal of AI-generated obscenity possession charge

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Carl Sagan’s estate sues Luma AI over alleged unauthorized voice use

The rights holder alleges that Luma AI used Sagan’s voice without permission in an advertisement and thereby made him an unwitting spokesperson for the company.

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California gives final approval to three AI-related bills

The Assembly concurred in Senate amendments to AB 2025 by a 78–0 vote and ordered the bill enrolled. The measure would require disclosure when digitally altered images are used in promotional materials for real property.

The Assembly also concurred 74–2 in Senate amendments to AB 2656 and ordered it enrolled. The measure would require covered state and local public employers to give a recognized employee organization at least 45 days’ written notice before developing, purchasing, implementing, or using generative AI to perform represented work.

The Senate concurred 39–0 in Assembly amendments to SB 503 and ordered that measure enrolled. SB 503 would require developers and deployers of medical clinical decision-support systems to identify foreseeable biased-impact risks, describe intended uses and known risks, monitor deployments, and take reasonable mitigation steps.

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UMG and Sony add DMCA stream-ripping claim against Suno

Universal Music Group and Sony Music Entertainment filed an amended complaint on August 25 alleging that Suno obtained copyrighted recordings for AI training by circumventing YouTube’s “rolling cipher” with the YT-DL and YT-DLP tools.

Judge F. Dennis Saylor IV had permitted the labels to add the Section 1201 claim after finding it plausible at the pleading stage and requiring a developed factual record, while denying their request to add 61,026 more recordings to the existing action.

See case page: UMG Recordings, Inc. v. Suno, Inc.

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Seventh Circuit affirms dismissal of AI-generated obscenity possession charge

The U.S. Court of Appeals for the Seventh Circuit affirmed dismissal of a possession count against Wisconsin resident Steven Anderegg on August 25, holding that existing Supreme Court precedent protected the narrow circumstance alleged: private possession in the home of obscene AI-generated sexual images depicting fictional children. The court treated the decision as an as-applied ruling and did not invalidate the federal statute.

The panel said lower courts remain bound by Supreme Court decisions distinguishing entirely virtual images from material created through abuse of real children, although two judges called for further Supreme Court guidance because modern AI can make the distinction increasingly difficult. Separate federal charges alleging production, distribution, and transmission of obscene material to a minor remain pending in the Western District of Wisconsin.