Disney and Universal have moved the fight over AI copyright into Hollywood’s biggest arena. Their lawsuit against Midjourney accuses the San Francisco-based AI image generation startup of creating unauthorized images tied to the studios’ intellectual property, while presenting the dispute as a broader threat to the motion picture business.
The case arrives amid dozens of copyright lawsuits against AI companies in the US court system. Visual artists brought a class action lawsuit against Midjourney in 2023, but this is the first time major Hollywood studios have entered the legal fight directly.
What Disney and Universal allege
The complaint describes Midjourney as a “bottomless pit of plagiarism” that generates “endless unauthorized copies” of the studios’ work. It includes dozens of images that the studios say show how the tool can produce visuals featuring their intellectual property.
One example in the complaint shows Yoda from Star Wars holding a light saber. The prompt cited for that image was “Yoda with lightsaber, IMAX.” Another example says that entering “The Boss Baby” produced an animated child in a tuxedo closely resembling the protagonist of Universal’s The Boss Baby franchise.
The studios also allege that they asked Midjourney to “adopt technological measures” to stop its image generators from producing infringing material. According to the complaint, Midjourney “ignored” those demands.
The lawsuit also challenges the training process. It alleges that Midjourney “cleaned” copies of Universal and Disney’s work during training, which “necessarily included creating more copies of the materials.” Midjourney did not immediately respond to requests for comment.
Why the output question matters
AI companies facing copyright lawsuits have often argued that their use of copyrighted work is protected by the “fair use” doctrine. In those disputes, courts often examine whether a new work is “transformative,” meaning whether it adds a new meaning or message.
IP lawyer Chad Hummel described the lawsuit as “an extremely significant development.” He views the complaint’s collection of images as strong evidence that “the output is not sufficiently transformative.”
Matthew Sag, a professor of law and artificial intelligence at Emory University, also sees this case as different from earlier AI copyright fights. In his view, Midjourney may face a harder fair use argument because the studios are not only pointing to training data. They are directly attacking what the model produces.
“The reason it’s different is that Disney directly attacks the output of the model. It doesn’t just use a few cherry-picked examples to prove that the model was trained on its works,” he says. “It’s going to be very difficult for a court or a jury to accept that it is transformative to take 1,000 pictures of Darth Vader and use them to produce even more pictures of Darth Vader.
That distinction is central to the dispute. The lawsuit is not just about whether copyrighted images were part of training datasets. It is about whether an AI image generator can be prompted to produce images that resemble well-known protected characters and franchises.
The licensing market in the background
Midjourney, like many generative AI startups, trained its tools by scraping the internet to assemble large datasets of images instead of seeking specific licenses. In a 2022 interview with Forbes, CEO David Holz described the process openly.
“It’s just a big scrape of the internet. We use the open data sets that are published and train across those,” he said. “There isn’t really a way to get a hundred million images and know where they’re coming from. It would be cool if images had metadata embedded in them about the copyright owner or something. But that's not a thing; there's not a registry.”
Since the AI boom started, a market for licensing creative works as training data has developed. Startups like ProRata and organizations like the Dataset Providers Alliance are operating between creatives and AI companies.
Some companies involved in AI litigation are also making licensing deals. The New York Times is in the middle of a lawsuit with Microsoft and OpenAI, but recently inked a deal with Amazon to license its works. WIRED parent company Condé Nast signed a deal with OpenAI last August.
Hummel summarized the shift plainly: “What’s very clear now is that there is a vibrant market for licensing.” For Disney and Universal, that market matters because it supports the argument that AI companies have options other than unlicensed use.
Hollywood’s broader AI conflict
In other ongoing AI copyright cases, some judges have emphasized that plaintiffs need to show financial harm. The Disney and Universal complaint frames the conflict in much larger terms, calling it an existential threat to the film industry.
“Midjourney’s bootlegging business model and defiance of US copyright law are not only an attack on Disney, Universal, and the hard-working creative community that brings the magic of movies to life, but are also a broader threat to the American motion picture industry which has created millions of jobs and contributed more than $260 billion to the nation’s economy,” it reads.
The lawsuit also lands as generative AI tools become more advanced. Google’s Veo 3 video generator is capable of generating highly realistic video in seconds. Within the entertainment industry, unions like SAG-AFTRA have fought for guardrails around how AI is used in filmmaking.
At the same time, some prominent filmmakers have shown interest in the technology. Titanic and Avatar director James Cameron has joined the board of AI image generator Stability AI and advocates for use of the technology.
What the case could shape
This lawsuit brings together several unresolved questions: what counts as fair use, whether AI outputs can be treated as infringing copies, how training data should be licensed, and what protections studios can demand for their characters and franchises.
Disney is widely known for being tough on copyright. By taking Midjourney to court alongside Universal, it has turned a long-running AI copyright debate into a direct confrontation between major studios and a leading image generation company.
No single case can settle every dispute around generative AI. But this one may help define how courts think about AI image outputs, Hollywood intellectual property, and the business models behind creative AI tools.