2/7/25 | Read time: 3 min
Midjourney is a subscription-based generative AI platform that creates images from text prompts submitted by its users. The subscription levels range from $10 to $120 per month.
Similar to many other generative AI platforms, Midjourney’s model is trained on data scraped from the internet, which includes copyrighted materials of third parties. In most instances, the incorporation of copyrighted materials in AI training models occur without the relevant consent of copyright holders. In Midjourney’s case, no speculation is required as its founder, David Holz, admitted in a 2022 Forbes interview that it does not seek consent from living artists or work still under copyright.
On 11 June 2025, Disney and Universal filed a lawsuit against generative AI company, Midjourney.
In the 110-page complaint, Disney and Universal allege that Midjourney has generated endless unauthorised copies of Disney and Universal’s copyrighted works including its famous characters. In addition, Midjourney uses Disney and Universal’s famous characters to promote its image service, which falsely implies the plaintiffs’ endorsement.
Prior to filing the lawsuit, Disney and Universal had sent cease-and-desist letters to Midjourney requesting that it stop infringing their copyrighted works and implement technological measures to prevent further generation of infringing material. The plaintiffs claim that despite acknowledging receipt of the cease-and-desist letters, not only did Midjourney continue with the infringing conduct, but it also released and promoted a newer version of its image service and teased its upcoming video service (which has since been launched).
Disney and Universal call out Midjourney as a ‘quintessential copyright free-rider and a bottomless pit of plagiarism’ and only ‘focused on its own bottom line’.
Midjourney has yet to formally respond to the lawsuit.
It is anticipated that Midjourney will rely on ‘fair use’ as a defence and specifically, ‘transformative use’. Under the US Copyright Act, ‘fair use’ allows the use of copyrighted works without obtaining the relevant consent under certain circumstances such as for criticism, commentary, news reporting, teaching, scholarship, and research.
The US Copyright Office generally considers ‘transformative’ uses as ‘fair’. This involves adding something new, with a further purpose or different character, and does not substitute the original use of the work. The meaning of ‘transformative’ will likely be crucial in Midjourney’s defence. However, the court may consider that Midjourney’s outputs are too close to the original works to be deemed ‘transformative’.
In Australia, there is a much narrower defence to copyright infringement. The Copyright Act 1968 (Cth) outlines specific ‘fair dealing’ exceptions, which are use for the purpose of research or study, criticism or review, parody or satire, report news or a legal professional providing advice. If use (without relevant consent) does not fall into at least 1 of these categories, it will be difficult to argue a defence to copyright infringement.
While this is not the first time that Midjourney or an AI platform has found itself on the receiving end of a copyright infringement lawsuit, this is the first time major Hollywood heavyweights have taken legal action against an AI firm.
The outcome of this landmark case will set a precedent for other jurisdictions internationally, including Australia. Australia’s copyright laws do not currently contemplate the use of artificial intelligence.
If Disney and Universal are successful in this lawsuit, this will be a massive win for creators and will have implications for all developers of AI platforms. If it is ruled that training AI models on publicly available sources is not considered fair use and constitutes copyright infringement, many AI developers will need to significantly modify their training models. This may include licensing content to train AI models, training AI models on copyright-free materials or implementing measures to block generations of potentially infringing materials.
Users will also need to be extra vigilant to ensure their prompts or results do not infringe on anyone’s copyright. In any event, users should already be taking these precautions.
Regardless of the outcome of this lawsuit, it will certainly accelerate discussions of copyright law reforms in Australia if it hasn’t already.
Senior Associate
Winnie is a lawyer at Bespoke with experience in intellectual property, commercial and consumer law matters in both private practice and in-house. Before (Read more)
