Is Generative AI Fair Use? Maybe.

The collision of AI and property rights is driving a reassessment of whether existing copyright laws are sufficient or if new legal frameworks are needed.

In June 2025, Walt Disney Co. and NBCUniversal (Universal Studios) filed a landmark copyright lawsuit against Midjourney, a popular generative AI image platform (and a personal favorite).

Stolen Inspiration?

Disney and NBCUniversal claim Midjourney "pirated" the studios' visual libraries to produce "endless unauthorized copies" of iconic characters, including Darth Vader, Iron Man, and the Minions, in violation of copyright protections.

Midjourney's founder, David Holz, and others in the AI industry have pushed back against these allegations of piracy. Holz compared his image generator's process to a kind of visual search engine or a human artist's learning process.

When George Lucas created the character Darth Vader, he drew inspiration from several sources, but Lucas' primary inspiration came from Japanese samurai culture. In particular, Vader's appearance —helmet and black armor— comes from paintings and descriptions of legendary warlord Date Masamune, known as the "One-Eyed Dragon of Ōshū."

So, essentially, the AI industry is arguing that rather than duplicating existing works, patterns discovered and analyzed in training data "inspires" generative tools to create new images —and text, for that matter.

Fair Use

In 2020, political cartoonist Bill Day drew an image of President Trump wearing Vader's helmet and armor. Day was attacking Trump and his supporters and using cultural context, i.e., Vader's villainous reputation, to help make his point.

It could be argued Day "pirated" Disney's copyright-protected character. He used the character's likeness — albeit badly drawn — and capitalized on Vader's story arc. Without Disney's "property," Day's cartoon makes no sense.

No one, however, thinks there is anything wrong with Day's Vader appropriation. It is considered fair use. In fact, Day's caricature is itself copyright protected. Day needed no license or permission to use it.

Thus, the question at hand is this. If a content creator goes to Midjourney and prompts the AI to create an image of California Governor Gavin Newsom dressed like Darth Vader, is that also considered fair use?

This question of fair use is at the heart of what must be decided, and how it is decided will have a stunning impact on the future for content creators.