IP Law Daily, COPYRIGHT—C.D. Cal.: Disney’s contributory infringement claim against AI company Hailuo survives a Cox v. Sony challenge, (May 27, 2026)

By Matthew Hersh, J.D.

The complaint adequately alleged inducement of infringement.

Disney can proceed for now on its secondary copyright infringement claim against the two companies allegedly behind AI service Hailuo because the complaint adequately alleged that the companies induced their users to infringe on the entertainment company’s copyrights, the District Court for the Central District of California has held. The court, in denying the companies’ motion to dismiss, also found that Disney adequately alleged ownership of valid copyrights in the movie and TV characters at issue, adequately alleged direct copyright infringement by the two companies, and adequately alleged that the court had personal jurisdiction (Disney Enterprises, Inc. v. Minimax, No. 2:25-cv-08768-SB-E (C.D. Cal. May 22, 2026)).

The opinion came in a lawsuit brought last fall by Disney Entertainment, Universal City Studios, Warner Bros. Entertainment, and a host of other affiliated studios (among them, Marvel Characters, Lucasfilm, Twentieth Century Fox, DreamWorks, and Turner Entertainment). The lawsuit takes aim at the operators of Hailuo AI, a Chinese artificial intelligence image and video generating service that, according to the studios’ complaint, “pirates and plunders [their] copyrighted works on a massive scale.” The lawsuit alleges that Hailuo enables its users to generate infringing images of well-known movie and TV characters such as Spider-Man, Superman, Darth Vader, the Joker, Shrek, Bugs Bunny, and the like.

Both companies moved to dismiss the claim, leading to this opinion.

Personal jurisdiction. The court first found that it had personal jurisdiction, at least at the present stage of the case, over both companies. Disney took aim at two affiliated companies allegedly behind Hailuo: a Chinese company headquartered in Shanghai named SXJT, and a Singaporean company headquartered in Singapore named Nanonoble (both are sister entities within the so-called MiniMax Group). SXJT moved to dismiss the claim for lack of personal jurisdiction, claiming that it focused only on research and development in China while Nanonoble operated the Hailuo platform in markets outside China. The court was not persuaded.

The problem with the Chinese company’s motion, the court found, was that the company purposefully directed activities toward the United States by filing a trademark application with the U.S. Patent and Trademark Office to use the MINIMAX mark in connection with computer software for providing AI services. What’s more, the court found, the company filed along with the application a statement of use of the mark in connection with “online software that employs AI for content creation, processing, and editing of text, speech, audio, and visual content.” To be sure, the court noted, SXJT produced declaration testimony that it had no presence in the United States and that it conducted all business operations in China. If true, the court acknowledged, that might eventually pose a problem for Disney. “But at the pleading stage,” the court emphasized, “conflicts of evidence must be resolved in Plaintiffs’ favor.” SXJT would remain in the case, at least for now.

Copyright infringement. The court also refused to dismiss the lawsuit on its merits. The court began with the validity of Disney’s copyrights. The AI companies alleged that Disney did not adequately allege ownership of valid copyrights in the actual characters at issue, independent of the underlying works in which they appear. The court disagreed. “Although not every character in a comic book, movie, or television show is entitled to copyright protection,” the court noted, “characters that are especially distinctive—i.e., that are sufficiently delineated and display consistent, widely identifiable traits—are protected.” The complaint identified “dozens of extremely well-known characters that satisfy this standard,” the court also noted, “along with hundreds of copyrighted works in which they appear.” To be sure, the court noted, there remained open questions about the validity of copyrights over some of the characters named in the complaint—but that was not fatal to the lawsuit. “The Court need not assess each character individually because a single protected character is sufficient to sustain a plausible claim,” the court noted, “and Defendants concede that some of the characters are protected.”

The court also found that Disney adequately alleged direct copyright infringement by the AI companies. Indeed, the court found, the complaint adequately alleged that the companies infringed on their copyrights in the characters in two different ways: first, by reproducing the characters as part of their development and training of Hailuo AI, and second, by reproducing those characters again as outputs in response to user inquiries. Moreover, even if it was true that some of the examples of allegedly infringing outputs were generated in response to inputs composed by Disney’s lawyers, the court noted, those examples still “plausibly establish[ed] that Hailuo AI readily produces infringing images when prompted.” In any event, the court noted, the complaint “identified examples of other infringing reproductions not produced by Plaintiffs’ counsel, including images used in Defendants’ social media posts.”

Finally, the court found, Disney also adequately alleged that the AI companies were secondarily liable for Hailuo users’ own acts of infringement. The companies’ motion to dismiss leaned heavily into Cox Communications, Inc. v. Sony Music Entertainment, the Supreme Court decision from earlier this year that narrowed copyright contributory infringement claims to cases where a defendant either “affirmatively induced” the infringement or “sold a service tailored to infringement.” But that case would not help the AI companies here, the court held, because Disney adequately alleged inducement. The complaint alleged, the court noted, that the two companies “market Hailuo AI as a ‘Hollywood studio in your pocket,’ advertise with Hailuo AI-generated videos featuring Plaintiffs’ protected characters, and sponsor instructional videos showing how to create infringing content on Hailuo AI by using the prompt ‘Spider-man and Supergirl kissing in the park’ to generate a video depicting those two protected characters.” At the pleading stage, the court noted, “these allegations are sufficient to plausibly allege contributory infringement based on Defendants’ affirmative steps to induce infringement.”

The Case is No. 2:25-cv-08768-SB-E.

Judge: Blumenfeld, Jr., S.

Attorneys: David R. Singer (Jenner & Block LLP) for Disney Enterprises, Inc. Robert M. Schwartz (Quinn Emanuel Urquhart & Sullivan, LLP) for Shanghai Xiyu Jizhi Technology Co. Ltd.

Companies: Disney Enterprises, Inc.; Shanghai Xiyu Jizhi Technology Co. Ltd.

Cases: Copyright AINews CaliforniaNews TechnologyInternet