Disney Enterprises, Inc. v. Minimax

District court denies motion to dismiss copyright infringement claims filed against operator of generative AI platform Hailuo, holding defendants are subject to personal jurisdiction in U.S., and that movie studio plaintiffs plausibly alleged infringement of their copyrighted characters both during AI training process and in generating outputs of “near perfect likenesses” of those characters.

Disney Enterprises, Universal Studios and Warner Bros., the “largest movie studios in the world,” brought a copyright infringement action against two defendants—SXJT, a Chinese company headquartered in Shanghai, and Nanonoble, headquartered in Singapore. Plaintiffs claimed defendants, acting under the name MiniMax, infringed their copyrights in numerous fictional characters through the development and operation of the Hailuo AI platform, both as part of the training process and as a result of infringing outputs. Hailuo AI, which defendants market as a “Hollywood studio in your pocket,” allows paying or trial users to generate images and short videos based on text prompts. In advertising the Hailuo AI platform, defendants featured AI-generated images and videos of many of plaintiffs’ superhero characters (including on WeChat, TikTok and Instagram) and conducted “paid partnerships” with Instagram users to advertise Hailuo AI’s abilities with AI-generated images of plaintiffs’ characters.

The movie studios alleged that “the outputs created by MiniMax are substantially similar reproductions and derivative works of [plaintiffs’] valuable copyrighted characters,” often containing “extensive nuance and detail, background elements, costumes, and accessories beyond what was specified in the prompt.” Defendants continued offering the service even after plaintiffs sent MiniMax a letter documenting its extensive infringements and demanding that it cease. Plaintiffs then filed suit, alleging claims for direct and secondary copyright infringement.

Defendants moved to dismiss the complaint on three grounds: (1) that they were not subject to personal jurisdiction in the United States, (2) that plaintiffs did not plausibly allege ownership of valid, registered copyrights in the characters at issue, independent of the underlying works in which they appear, and (3) that plaintiffs’ theory of infringement based on the development and training of Hailuo AI and the outputs it generates was inadequate.

The court first rejected defendants’ personal jurisdiction challenge. Because defendants were not subject to general jurisdiction in any state court, plaintiffs needed to show that defendants had minimum contacts with the United States as a whole. The court held that defendants’ application to the U.S. Patent and Trademark Office for a trademark registration to use the mark MINIMAX in the United States gave rise to a prima facie showing of personal jurisdiction.

As to copyrightability of the characters at issue, the district court cited DC Comics v. Towle for the proposition that “copyright protection extends not only to an original work as a whole, but also to ‘sufficiently distinctive’ elements, like comic book characters, contained within the work.” The court explained that the complaint identified dozens of well-known characters that satisfied this standard.

The court then found that the sample content generated by plaintiffs’ counsel “plausibly establish[ed] that Hailuo AI readily produces infringing images when prompted.” Plaintiffs also alleged that defendants trained their AI program using plaintiffs’ copyrighted content and then specifically used those characters to advertise Hailuo AI’s ability to reproduce them. The court also found that this was sufficient to plead secondary infringement on a theory of contributory liability, because defendants took affirmative steps to induce infringement through this targeted advertising.

Summary prepared by Tal Dickstein and Jacob Seivers