Disney and NBCUniversal Challenge Midjourney Over AI

AI continues to push ethical and legal boundaries, raising new questions about copyright infringement and intellectual property rights. In our recent breakdown of the Thomson Reuters v. Ross Intelligence decision, we explored how the courts are beginning to grapple with questions around copyright protection and AI-generated content ownership that impact businesses.

Now, a high-profile lawsuit filed by Disney and NBCUniversal against AI image generator Midjourney signals that these issues are far from settled—and that the legal scrutiny surrounding AI outputs is intensifying.

 The Case at a Glance

On June 11, 2025, Disney and NBCUniversal filed a joint federal lawsuit in the Central District of California against Midjourney. The 110-page complaint alleges that Midjourney used the studios’ copyrighted content to train its AI, then created and shared unauthorized images of their iconic characters.

Midjourney, founded in 2021 by David Holz, offers AI image generation through a paid subscription model—reportedly generating $300 million in revenue last year, according to the complaint. Within just 6 months of its launch, the platform surpassed 1 million users, and today, it’s estimated that its daily active users fluctuate between 1.2 million and 2.5 million.

The studios describe Midjourney’s alleged infringement as “a bottomless pit of plagiarism” and characterize the service as “a virtual vending machine” for unauthorized copies of copyrighted works. The filing includes dozens of side-by-side comparisons between original copyrighted characters and Midjourney-generated images, providing compelling visual evidence of the alleged infringement.

The studios hope to be awarded monetary damages and to halt the launch of Midjourney’s upcoming video generation tool.

Key Legal Arguments 

Direct and Secondary Infringement

The studios’ primary argument centers on two distinct forms of infringement. First, they alleged that Midjourney directly incorporated copyrighted works into its training datasets without authorization. Second, they contend that the AI-generated outputs themselves constitute copyright infringement when publicly displayed, downloaded, or distributed through Midjourney’s subscription service.

This dual approach is strategically significant. Unlike some AI litigation that focuses solely on the training process, Disney and NBCUniversal are targeting the monetization and distribution of outputs—a more tangible theory of harm that courts may find easier to evaluate.

Willful and Systematic Infringement

The complaint goes beyond claiming inadvertent infringement, alleging what it characterizes as a “bootlegging business model.” The studios assert that Midjourney’s infringement is intentional and systematic, pointing to the company’s alleged failure to respond to cease-and-desist requests while continuing to release newer, higher-quality versions of its platform.

This allegation of willful infringement could expose Midjourney to enhanced damages under copyright law, potentially including statutory damages of up to $150,000 per work infringed and attorney’s fees.

Profit Motive and Commercial Harm

The studios emphasize that Midjourney’s substantial revenue—approximately $300 million annually—is directly tied to the platform’s ability to recreate its intellectual property. This profit motive strengthens their infringement claims and supports arguments for significant monetary damages.

This underscores a core issue for companies developing or deploying generative AI tools: monetization strategies built on third-party IP will increasingly come under legal scrutiny.

The Broader Legal Landscape

This case arrives amid a mounting wave of IP litigation involving AI companies. From newspapers to book publishers and record labels, content creators across industries are asserting their rights against AI companies that use their works without authorization.

From a legislative standpoint, states are already discussing AI transparency laws and IP accountability frameworks. As shared in my analysis of the 2025 Texas legislative session, these developments signal early markers for broader compliance demands that businesses should anticipate.

The entry of two entertainment industry giants into this litigation landscape is particularly significant given the substantial resources and legal expertise that these major studios can bring to bear. Unlike individual authors or smaller publishers, Disney and NBCUniversal have the capacity to pursue complex, expensive litigation through appeals and beyond.

Looking Ahead

This case shifts the conversation from how AI is trained to how AI-generated content is used and monetized. For businesses exploring or investing in generative AI tools, it underscores a vital point: copyright law isn’t standing still, and the courts are beginning to draw lines in the sand.

Businesses can no longer assume that AI generation provides a legal shield for using copyrighted content. This case could lead to settlements, licensing deals, or even a dramatic reshaping of how generative AI companies operate.

If successful, this lawsuit could help protect businesses and establish that AI companies must either obtain proper licenses for copyrighted content or implement robust filtering mechanisms—or face substantial legal and financial consequences.

Navigating the emersion of AI in the workplace can be complicated. We’re available to assist you in understanding how this and related cases could affect your business and to provide the legal counsel necessary for success in this evolving landscape. As your business allies, we’re dedicated to preparing you for the changing rules and helping you decide how legal decisions impact your business. Business owners should take note of this case to watch how the potential decision will help protect their confidential property as AI generated content becomes the norm in the workplace.