Hollywood vs. AI: Disney and Universal Launch Landmark Copyright Suit
On June 11, 2025, The Walt Disney Company (“Disney”) and Universal Pictures (“Universal”) filed a joint copyright infringement lawsuit against AI image generator Midjourney in the U.S. District Court for the Central District of California. The studios claim damages and Midjourney’s profits. Alternatively, they seek statutory damages of up to US$150,000 per infringed work, or such other amounts as may be applicable under 17 U.S.C. § 504. This marks the first time major Hollywood studios have taken legal action against an AI firm for alleged intellectual property violations – a move that could set a precedent for how courts address generative AI’s use of copyright content.
The 110-page complaint alleges that Midjourney unlawfully scraped the content libraries of Disney and Universal to train its AI model, enabling the platform to generate “endless unauthorized copies” of iconic characters such as Elsa from “Frozen” and Darth Vader from “Star Wars.”
The studios issued warnings and cease-and-desist requests, which Midjourney is alleged to have ignored. “Our world-class IP is built on decades of financial investment, creativity and innovation,” said Horacio Gutierrez, Disney’s chief legal and compliance officer. “These investments are only possible because copyright law gives creators the exclusive right to profit from their works.” Kim Harris, general counsel for Universal, added: “We are bringing this action to protect the hard work of all the artists whose work entertains and inspires us.”
In a 2022 interview with The Associated Press, Midjourney CEO David Holz described the platform as “kind of like a search engine,” pulling from countless images across the internet. “Can a person look at somebody else’s picture and learn from it and make a similar picture? Obviously, it’s allowed for people ... To the extent that AIs are learning like people, it’s sort of the same thing.”
The studios argue that Midjourney is profiting from their creative investments by offering an image-generation tool they liken to a “virtual vending machine” that generates unauthorized reproductions of copyright works for commercial gain. The concerns include that Midjourney’s forthcoming AI video service, will generate and distribute videos featuring their copyright-protected characters.
Unlike other lawsuits focusing on avoiding scraping copyright-protected works altogether, the relief sought includes that Midjourney filters what it generates. Disney and Universal contend that Midjourney has already demonstrated the technical ability to restrict certain types of content, such as violent imagery, and therefore could implement similar safeguards to prevent the replication of recognizable copyrighted material.
AI companies have defended their practices by invoking the “fair use” doctrine under 17 U.S.C. § 107, which permits limited use of copyrighted material without permission for purposes such as research, commentary and education. U.S. courts generally evaluate “fair use” based on four factors:
- the purpose and character of the use;
- the nature of the copyrighted work;
- the amount of copyrighted material used; and
- the effect on the potential market for the copyrighted work.
While AI firms argue their outputs are transformative and novel, many artists and media companies claim that use of generative AI tools exploits their work without consent or compensation, raising questions about whether such use falls within the boundaries of fair use.
This lawsuit joins a growing number of legal challenges against AI firms. In Getty Images v. Stability AI, Getty Images alleges that Stability unlawfully scraped millions of its copyrighted photographs to train its image-generation model, Stable Diffusion. Meanwhile, The New York Times v. OpenAI centers on whether AI firms can train their models using copyrighted journalism and reproduce such content without permission. Though not rooted in the entertainment space, both cases echo the same core tension: how to balance transformative technology with creative ownership.
The Midjourney case will undoubtedly help set the foundation for how copyright law is applied to generative AI in the entertainment industry.
The Sports, Media & Entertainment Group at Aird & Berlis LLP assists clients in navigating contracts, transactions, regulations, disputes and more. Please contact the authors or a member of the group if you have questions or require assistance.
