From Courtrooms to Collaboration: Disney’s Strategic Shift in the Age of AI

[1]

Generative AI has quickly become a normal part of today’s media-driven society.[2] The ability to distinguish what is real from what is AI-generated is becoming more difficult.[3] Those familiar with social media may recognize the OpenAI generative video system called Sora.[4] Sora is an AI platform designed to generate short-video content in response to user prompts.[5]                  

Typically, generative-AI platforms, like Sora, would sound the alarm for major entertainment and intellectual property driven companies because these platforms provide real potential for copyright and trademark infringement.[6] In recent years, major companies have often chosen to combat generative AI companies with lawsuits, but The Walt Disney Company has decided to pursue a different course.[7] 

The Walt Disney Company recently reached a three-year agreement (“the Agreement”) with OpenAI, which includes a reported one-billion-dollar investment and a licensing arrangement tied to OpenAI’s generative video model Sora.[8] Under the Agreement, OpenAI is granted limited access to Disney owned intellectual property for use within Sora.[9] The licensed material includes characters and creative elements from Disney, Pixar, Marvel, and Star Wars.[10] The Agreement explicitly excludes the use of performer likenesses and voices thereby drawing a clear distinction between character-based copyright interests and individual rights of publicity.[11] This distinguishment between copyright interests and rights of publicity reflects growing sensitivity to the legal risks surrounding unauthorized use of real personas in generative AI systems.[12]

Moreover, turning to copyright infringement cases, AI companies have often relied on fair use to justify unlicensed use of copyrighted works.[13] However, the courts have yet to definitively determine whether the use of copyrighted works to train generative AI systems qualifies as fair use.[14] From a copyright perspective, the Agreement demonstrates how licensing can function as a solution to unresolved questions surrounding AI training and output rights.[15]  By entering into a licensing agreement, Disney can strategically avoid the legal uncertainty associated with those unresolved issues and OpenAI can benefit from the use of obtaining certain rights to use globally known Disney characters in its generative AI platform.[16]

Trademark considerations also play a central role in the structure of the Agreement.[17] Disney’s trademarks are among the most widely recognizable and valuable in the world, and improper use could result in consumer confusion or brand dilution of the famous marks.[18] The Agreement reportedly includes content controls and usage limitations designed to ensure that AI-generated outputs remain consistent with Disney’s brand standards.[19]

Beyond copyright and trademark law, the Agreement reflects broader concerns about responsible AI deployment.[20] Both companies have publicly emphasized inclusion of safeguards to Open AI that intend to prevent misleading, inappropriate, or potentially harmful content as well as the implementation of age-appropriate safety measures as an effort to provide protection to younger users.[21] These safeguards acknowledge that AI-generated media can raise legal and reputational risks that must be consistently monitored and mitigated.[22]

The announcement of the Agreement has not come without scrutiny and concern from others within the media and creative community.[23] Some labor advocates have expressed concern that licensing arrangements of this kind may accelerate the displacement of human content creators or alter the economics of creative labor in general.[24] However, proponents of the deal counter-argue that formal licensing arrangements allow for greater transparency of intellectual-property-based data use as opposed to unlicensed use by AI companies to train their AI systems.[25]

Within the field of intellectual property law, the Disney and OpenAI agreement may serve as a model for future collaborations between content holders and AI developers with the goal of creating an ecosystem in which both can thrive functionally, economically, and legally.[26] For intellectual property lawyers, the Disney and OpenAI partnership highlights the potential need for transactional strategy in the AI era.[27] By favoring licensing over litigation, the Agreement may influence how future disputes in intellectual property between generative AI companies and creative content owners are resolved.[28]

References

[1] Photo by Kaleb Tapp, A Statute of Walt and Mickey in Front of a Castle, (Feb. 22, 2022), https://unsplash.com/photos/a-statue-of-walt-and-mickey-mouse-in-front-of-a-castle-ijZx09v5kh4?utm_source=unsplash&utm_medium=referral&utm_content=creditShareLink 

[2] See Steven Lee Myers & Stuart A. Thompson, A.I. Videos Have Flooded Social Media. No One Was Ready, N.Y. Times (Dec. 8, 2025), https://www.nytimes.com/2025/12/ 08/technology/ai-slop-sora-social-media.html?searchResultPosition=4.

[3] See id.

[4] See Dawn Chiemelewski & Deborah Mary Sophia, Disney to Invest $1 Billion in OpenAI, License Characters for Sora Video Tool, Reuters (Dec. 11, 2025), https://www.reuters.com/busin ess/media-telecom/disney-makes-1-billion-investment-openai-brings-characters-sora-2025-12-11/.

[5] See id.

[6] See Novika Ishar, Disney and OpenAI Announce Strategic Sora AI Partnership and $1 Billion Investment, Romano L. (Jan. 2, 2026) https://www.romanolaw.com/disney-and-openai-announce-strategic-sora-ai-partnership-and-1-billion-investment/.

[7] See id.

[8] See id.

[9] See The Walt Disney Company and OpenAI Reach Landmark Agreement to Bring Beloved Characters from Across Disney’s Brands to Sora, OpenAI (Dec. 11, 2025), https://openai.com/in dex/disney-sora-agreement/.

[10] See id.

[11] See Reber M. Boult & Joshua L. Rojas, Disney–OpenAI’s Sora Deal: What it Signals for IP, Licensing, and Responsible AI, Adams and Reese (Dec. 16, 2025), https://www.adamandreese.co m/insights/disney-openais-sora-deal-what-it-signals-for-ip-licensing-and-responsible-ai.

[12] See The Walt Disney Company and OpenAI Reach Landmark Agreement to Bring Beloved Characters from Across Disney’s Brands to Sora, supra note 9.

[13] See Boult & Rojas, supra note 11.

[14] See Eriq Gardner, Disney’s Sora Wager & Hollywood’s Next A.I. Legal Battles, Puck (Dec. 16, 2025), https://puck.news/disneys-sora-wager-hollywoods-next-ai-legal-battles/.

[15] See Disney’s Deal With OpenAI: Copyright Law and AI use, LawShelf, https//:www.lawshelf .com /blogentryview/disneys-deal-with-openai-copyright-law-and-ai-use.

[16] See Boult & Rojas supra note 11.

[17] See Ishar, supra note 6.

[18] See id; see also AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-53 (9th Cir. 1979) (explaining balancing test to prove likelihood of confusion); 15 U.S.C. § 1125(c) (outlining elements to establish dilution by blurring). 

[19] See The Walt Disney Company and OpenAI Reach Landmark Agreement to Bring Beloved Characters from Across Disney’s Brands to Sora, supra note 9.

[20] See Boult & Rojas supra note 11.

[21] See The Walt Disney Company and OpenAI Reach Landmark Agreement to Bring Beloved Characters from Across Disney’s Brands to Sora, supra note 9.

[22] See Boult & Rojas, supra note 11.

[23] See Douglas McLennan, What the Disney/OpenAI Deal Says About a Creative Marketplace Dominated by AI, Post Alley (Dec. 21, 2025), https://www.postalley.org/2025/12/21/what-the-disney-openai-deal-says-about-a-creative-marketplace-dominated-by-ai/.

[24] See id.

[25] See Boult & Rojas, supra note 11.

[26] See id.

[27] See Ishar, supra note 6.

[28] See Boult & Rojas, supra note 11.