Disney and NBCUniversal's Midjourney Lawsuit Isn't About Money — It's About Setting AI Precedent

It isn't every day that individual artists and creators and mega-studio conglomerates are actually aligned in what they want, but that's just the sort of villain that artificial intelligence has become when it comes to the entertainment sphere.
Last week, both Disney and NBCUniversal sued AI company Midjourney in a case of copyright infringement. For several years, there have been countless lawsuits filed by individuals against companies such as Midjourney objecting to the use of copyrighted material in the training of AI models and in these models' outputs. But two major studios teaming up to sue one of the bigger AI image generation tools for the same reason is a big step.
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Before we start holding up any studio as a defender of artists' rights, there's a very good chance that how this lawsuit ultimately plays out will inform Disney, NBCUni, and other studios' own playbooks in building their own AI models. For now, the Midjourney suit has the potential to set a precedent around artificial intelligence, how AI companies can operate or train their models, and have an impact on all creatives.
'It's going to be an important case that'll affect the rights held by almost all creatives, regardless of how large they are,' said Ray Seilie, a trial attorney with Kinsella Holley Iser Kump Steinsapir. 'It's a rare alliance in the legal industry, or the entertainment legal industry, where you see studios actually doing something that artists are 100 percent behind.'
The 143-page lawsuit against Midjourney filed last Wednesday is a simple copyright lawsuit, even if it comes at the intersection of AI and bigger legal debates about whether AI-generated material can be considered copyrightable. Disney and NBCUniversal allege that Midjourney is willfully infringing on their biggest characters and IP and making a profit from doing it. It claims that anyone with a subscription to use Midjourney's image generating tool — and soon its video generation tool — can prompt the AI model to create an image of Darth Vader or the Minions, and it will spit out an almost perfect copy.
The lawsuit includes some convincing side-by-sides of the real movie stills and the images Midjourney has created. It's not as if those examples are a close facsimile that can be mistaken for something else, they're not a parody, and they're not a transformed iteration of existing characters; it's just an AI-generated copy. That's going to be a problem when Midjourney — which has yet to file a response to the complaint — tries to say it's just fair use.
'Just candidly, I think it is hard to see how the courts will let Midjourney keep doing what it's doing without any kind of restriction,' Seilie said. 'To me, I think the studios have a very strong case here.'
Seilie said Midjourney will likely try to say that it is just the middleman providing the tools, and it's the users creating the images who are violating the copyright and are breaking the terms of service. That is a stretch, since Midjourney profits off subscriptions and controls what its users can and can't do.
Case in point: the lawsuit says Disney and NBCUniversal tried to get Midjourney to restrict users from creating images of copyrighted material, but it has ignored those pleas. Midjourney already prevents users from generating images of a violent or sexual nature, so why can't they just flip another switch to keep people from generating Yoda?
'Legally speaking, it's clear that Midjourney is willfully infringing. They're intentionally infringing, and it sounds like they didn't take any steps to try to mitigate or limit what the users could do on their platform,' said entertainment attorney Dale Nelson, who works with Donaldson Callif Perez and is former in-house counsel for Warner Bros. 'And willful infringement is far worse than infringement of the type where you have a good faith belief that what you were doing was okay. So the fact that they didn't respond to the studios' letters just doesn't look good for Midjourney.'
Nelson said Midjourney may also argue that any ruling against them could have unintended consequences on the whole industry and what AI models are able to do. But the studios' lawyers have thought of that too.
'I think that they have made very specific factual allegations in their complaint, probably wisely so, that it's not a lawsuit just about all AI. This is a very specific use that they're complaining about,' Nelson said.
All this matters to Disney and NBCUni because it represents lost revenue. If someone can just generate an image with AI of their favorite 'Star Wars' character, why would they want to buy anything specific from Disney itself? It could also be damaging to Disney's brand if AI can easily generate images of Disney characters that are more adult in nature than they'd prefer and let the average user distribute that image widely on the web.
Seilie said this could be a very narrow ruling, one that only impacts Midjourney and how it operates or needs to operate moving forward, but more likely, any ruling will cause other AI companies to be proactive and change what their models can do or how they're trained based on what the court decides. They don't want their own lawsuits if they can avoid them. It could also just be settled with Midjourney agreeing to pay Disney and NBCUniversal a licensing fee to keep creating copies of their IP.
But Seilie expects this to go deeper and believes the studios will want a ruling of some kind — and will fight until they get one. Seilie believes Disney and NBCUniversal will want discovery with the ability to get a clear sense of exactly how Midjourney's models were trained and how they're used.
'The studios want the precedent here,' Seilie said. 'They want a district court opinion that says that scraping data for a training engine or using copyrighted material in training data is a copyright violation. I think they're gonna want a ruling that says that, and it'll probably go through appeals.'
Precedent is the crux of the issue here, giving the studios clarity on exactly what can and can't be used in training AI models, whether it's licensing someone else's to make movies or training their own internally. Because the flip side, should the courts rule in favor of Midjourney, could be 'earth shaking' for how the studios do business.
'It would be a sea change in the way that copyrighted material works,' Seilie said. 'We would see a lot of changes in how studios operate or how creatives, frankly, operate.'
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