Disney and Universal Take AI Startup Midjourney to Court Over Copyright Violations
PLUS: GOP Bill Aims to Shield AI Firms from Lawsuits with Transparency Protections
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Disney and Universal Take AI Startup Midjourney to Court Over Copyright Violations
On June 11, 2025, Disney and Universal launched a landmark legal battle against Midjourney, a San Francisco-based artificial intelligence company, accusing it of copyright infringement. The lawsuit, filed in the U.S. District Court for the Central District of California, marks the first time major Hollywood studios have targeted an AI firm for generating images that allegedly mimic their iconic characters, such as Darth Vader from Star Wars, the Minions from Despicable Me, and Elsa from Frozen.
The 110-page complaint claims Midjourney’s AI, which creates images from text prompts, was trained on vast amounts of copyrighted material from Disney and Universal without permission. The studios argue that Midjourney’s technology produces “countless” unauthorized copies of their characters, describing the company as a “virtual vending machine” for plagiarism. Examples in the lawsuit show AI-generated images of characters like Homer Simpson and Spider-Man that closely resemble the studios’ originals.
Disney and Universal previously sent cease-and-desist letters to Midjourney—Disney in 2023 and Universal in 2024—but claim the company ignored or minimally acknowledged their demands. The studios assert that Midjourney, which reportedly earned $300 million in 2024 with 21 million subscribers, could implement safeguards like those used to block violent or explicit content but has failed to do so for copyrighted material.
The lawsuit seeks unspecified damages, potentially up to $150,000 per infringed work, and an injunction to prevent Midjourney from offering its upcoming video generation service without copyright protections. The studios emphasize that their intellectual property, built on decades of investment, is vital to the $260 billion U.S. film and television industry, which supports 2.3 million jobs.
Midjourney, founded in 2021 by David Holz, did not immediately respond to requests for comment. In a 2022 interview, Holz described the company’s training process as a “big scrape of the internet,” a practice common among AI startups but increasingly contested by creators. The case joins a wave of lawsuits against AI firms, including one by The New York Times against OpenAI and Microsoft, as industries grapple with the ethics and legality of AI training data.
This legal action signals Hollywood’s growing concern over generative AI’s impact on creative industries. While Disney and Universal support AI’s potential for “responsible” innovation, they argue that unchecked use threatens the incentives driving American entertainment. The outcome could set a precedent for how AI companies handle copyrighted material in the future.
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GOP Bill Aims to Shield AI Firms from Lawsuits with Transparency Protections
On June 11, 2025, Republican Senator Cynthia Lummis of Wyoming introduced a groundbreaking bill designed to protect artificial intelligence companies from civil lawsuits, provided they maintain transparency about their AI systems. The proposed legislation, detailed in an NBC News report, seeks to balance innovation in the fast-growing AI sector with accountability, addressing rising legal challenges over AI-generated content.
The bill outlines a “safe harbor” provision, granting immunity from civil liability to AI developers who disclose key details about their systems, such as training data sources and operational mechanisms. This transparency would enable users to better understand how AI outputs are generated, potentially reducing disputes over issues like copyright infringement or misinformation. However, the bill does not exempt AI firms from criminal liability, ensuring accountability for illegal activities.
Senator Lummis, a known advocate for tech-friendly policies, argues that the legislation will foster AI innovation in the U.S. by reducing the risk of costly lawsuits that could stifle smaller startups. “We need clear rules to keep America at the forefront of AI development while protecting consumers,” Lummis stated. The bill responds to recent high-profile cases, such as Disney and Universal’s lawsuit against AI firm Midjourney for copyright violations, highlighting tensions between AI companies and content creators.
Critics, including some Democratic lawmakers and consumer advocacy groups, warn that the bill could weaken protections for intellectual property holders and victims of AI-related harms, such as deepfake fraud. They argue that transparency alone may not deter misuse or adequately address complex legal issues. The bill’s passage remains uncertain, as it faces scrutiny in a divided Congress.
If enacted, the legislation could set a precedent for regulating AI liability nationwide, potentially influencing global standards. It comes at a time when the U.S. is competing with China and the European Union to shape the future of AI governance. The bill’s supporters see it as a step toward a pro-innovation framework, while opponents call for stronger safeguards to protect public interests.
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Business Tip of the Day
Implement AI-Driven Document Analysis with Transparent Data Sourcing to Minimize Legal Risks
A cutting-edge business automation tip for 2025 involves using AI-powered document analysis tools to streamline workflows, such as contract review, compliance reporting, or invoice processing, while mitigating lawsuit risks through transparent data sourcing.
AI tools like those leveraging natural language processing (NLP) can automate repetitive tasks—such as extracting key terms from legal documents or flagging compliance issues—saving significant time and reducing human error. For example, JPMorgan Chase’s COiN platform automates complex legal document reviews, cutting processing time from 360,000 hours annually to seconds.
To avoid legal pitfalls, particularly around copyright or data privacy lawsuits, businesses should prioritize AI systems that use licensed or ethically sourced training data and provide transparency about their data origins. This aligns with the proposed GOP bill by Senator Cynthia Lummis, which offers liability protections for AI companies that disclose training data and operational details. To implement this safely:
Choose AI Tools with Clear Data Provenance: Select platforms that document their training data sources, avoiding those that rely on unverified web-scraped content, which could infringe on copyrights (e.g., Disney and Universal’s lawsuit against Midjourney).
Integrate Human Oversight: Use AI to generate initial drafts or insights, but ensure human review to catch potential biases or errors, reducing risks of algorithmic discrimination lawsuits (e.g., the HireVue case).
Adopt Compliance-Focused AI: Leverage tools that automate regulatory reporting (e.g., sustainability data or financial audits) to ensure adherence to laws like Texas’s CUBI or Illinois’ BIPA, minimizing privacy-related legal exposure.
Regularly Audit AI Outputs: Conduct periodic checks to ensure AI-generated outputs don’t inadvertently reproduce copyrighted material or violate privacy laws, as seen in cases against OpenAI and Google.
By focusing on transparency and compliance, businesses can harness AI for automation—potentially saving hours per task, as seen with Microsoft 365 Copilot’s 30% productivity boost at companies like Head Start Homes—while staying ahead of evolving legal standards. Always consult legal experts to ensure compliance with local regulations.
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