April 29, 2026

Action! Hollywood Joins the Battle Over AI

By Emily Poler

About a month ago, the Supreme Court in Cox Communications, Inc. v. Sony Music Entertainment reversed a $1 billion verdict against Cox, an Internet service provider. That verdict stemmed from Cox’s failure to prevent subscribers from infringing Sony’s copyrighted works by sharing pirated copies over Cox’s network. The Supreme Court held that a service provider can only be liable for what is called “contributory infringement” by a third-party (in this case, a user) if the service either induced the infringement or sold a service specifically tailored for infringement. In its decision, the Court held Cox was not liable for contributory infringement because it failed to do anything to affirmatively prevent it. Put another way, Cox’s inaction was not enough to incur liability. 

One AI company quickly jumped on this decision to argue that it shouldn’t be liable for what users do with its own platform. In Disney Enterprises, Inc. et al v. MiniMax et al, Disney and other large studios are suing China-based MiniMax and its Singaporean owner Nanonoble Pte. Ltd., which offers an app called Hailuo AI. This app allows users to create short videos in response to prompts and is marketed with the tagline, “A Hollywood studio in your pocket.” In theory, this is cool, except that what Hailuo also does is let users make little videos starring Star Wars and Marvel characters, among other well-known properties.

Since Hailuo is AI, naturally the Plaintiffs claim it was created using unauthorized copies of the studios’ works. And, of course, Plaintiffs say any user output that publicly reproduces Darth Vader, Spiderman et al. are unauthorized copies or derivative works of the studios’ copyrighted properties. 

MiniMax makes a bunch of arguments as to why the complaint should be dismissed, some of which have enough teeth to maybe lead to dismissal or partial dismissal. For example, MiniMax argues that much of its conduct took place outside of the United States and, therefore, cannot serve as the basis for a claim under U.S. copyright law. In fact, the Plaintiffs spent months after their initial filing unsuccessfully attempting to serve the Defendants in Singapore and China, and the federal judge in the case had threatened to toss the lawsuit in December as a result of these issues.

Other of the Defendants’ arguments are more, shall we say, creative. MiniMax asserts that while the studios complain that Hailuo’s outputs depict characters from their movies and TV shows, the studios can’t point to specific copyright registrations covering those characters. That argument is a bit much because it seems impossible to obtain an image of, say, the Mandalorian or Iron Man, without reproducing a portion of the copyrighted work they appear in. It seems equally hard to claim that a user can make a Shrek short without intruding on the copyright owners’ rights to make derivative works based on their copyrighted materials.

In the wake of the Supreme Court’s Cox decision, MiniMax also argues it shouldn’t be held liable merely because it didn’t prevent Hailuo from outputting infringing content, despite having that ability. (The company did put guardrails in place to prevent Hailuo from creating pornographic or violent content.) According to MiniMax, the failure to include these guardrails is, at most, inaction and not an affirmative act, and within the framework of Cox there’s no contributory liability for mere inaction. However, the line between inaction and action is pretty blurry here. Creating and marketing a platform that is appealing because it lets users make fan films of their favorite characters seems pretty active to me. 

On top of that, MiniMax is claiming it’s not responsible for user infringement because it didn’t actively encourage that infringement. Really? Hailuo’s tagline of “A Hollywood studio in your pocket” sounds pretty encouraging to me. MiniMax says the slogan describes “the quality and creative capability” of Hailuo,” but I think it could be interpreted as urging users to create works based on those of Hollywood studios. My view is buttressed by the claim, according to the complaint, that MiniMax allegedly used Spiderman in Hailuo’s marketing materials. This type of question — a fact question — is going to make it hard for the judge to dismiss the complaint. 

And that means that despite miniMax’s assertions, there should be plenty of action ahead in this case.