Disney (DIS  ) and Universal, the powerhouse studios behind Star Wars, Frozen, and Kung Fu Panda, have filed a major copyright lawsuit involving an AI startup, described by Entrepreneur as a potential first for Hollywood. The case targets Midjourney, a text-to-image generator that allegedly enabled users to produce visuals featuring copyrighted characters owned by the studios.

Filed in the U.S. District Court in Los Angeles, the 110-page complaint accuses Midjourney of building a commercial enterprise off protected intellectual property. According to the lawsuit, the studios had issued cease-and-desist letters to Midjourney's counsel, demanding the unauthorized content be stopped.

"Midjourney, which has attracted millions of subscribers and made $300 million last year alone, is focused on its own bottom line and ignored Plaintiffs' demands," the filing reads. When those warnings were ignored, Disney and Universal moved forward with legal action. The lawsuit says that Midjourney's paid plans reportedly range from $10 to $120 per month, contributing to its explosive financial growth since launching.

Midjourney's Fast Growth Draws Major Legal Firepower

Founded in 2021, Midjourney has grown rapidly by offering AI-generated images within seconds, fueled entirely by user prompts. With just 11 full-time employees, the company describes itself as a small, self-funded operation. The lawsuit alleges its rapid expansion has come at the expense of long-established copyrights, turning beloved characters into AI fodder without authorization.

The lawsuit highlights a roster of well-known characters allegedly reproduced by Midjourney's platform. Disney's complaint cites the unauthorized use of Darth Vader from Star Wars, Elsa from Frozen, Lightning McQueen from Cars, and Homer Simpson from The Simpsons. Universal's claims include the depiction of Minions from Despicable Me, Po from Kung Fu Panda, Shrek, as well as Hiccup and Toothless from How to Train Your Dragon.

According to the filing, only the studios maintain legal rights to commercialize these characters and develop content or merchandise around them. One line in the complaint describes Midjourney as a "bottomless pit of plagiarism," accusing the startup of undermining the basic framework of U.S. copyright law. The studios are seeking a jury trial to establish boundaries around what generative AI platforms can legally create.

Broader Battle Looms For AI And Copyright Control

In the filing, Disney and Universal frame the lawsuit as more than a defense of individual characters, describing Midjourney's business model as a direct threat to the creative economy and the broader U.S. film industry.

Calling the infringement "systematic, ongoing, and willful," the plaintiffs argue the damage is both substantial and irreparable, not just to their own properties but to the incentive system that fuels the $260 billion American motion picture economy.

The lawsuit arrives during a critical moment for AI litigation. Just one week prior, Reddit (RDDT  ) filed its own suit against Anthropic, alleging unauthorized use of its forum content for AI training purposes, The Wall Street Journal reports. Getty Images (GETY  ) is also pursuing a multimillion dollar case against Stability AI for allegedly scraping over 12 million copyrighted visuals from its platform.