MiniMax failed to knock out a Hollywood copyright lawsuit over Hailuo AI, leaving the Chinese AI firm exposed to claims that its image-and-video system generated protected characters including Spider-Man, Darth Vader, and Shrek without permission.
US District Judge Stanley Blumenfeld denied MiniMax’s dismissal bid on May 26, 2026, keeping the case alive in the US District Court for the Central District of California, according to CryptoBriefing. The ruling does not decide whether MiniMax infringed copyrights. It means the studios cleared the early procedural bar and can keep pressing the case.
MiniMax now faces discovery risk, not a final copyright defeat
The lawsuit was filed on September 16, 2025, by Disney and other major Hollywood studios. They accuse MiniMax’s Hailuo AI service of producing images and videos that use famous entertainment characters without authorization.
Can a foreign AI company avoid a US copyright case by saying its business sits outside the country? For now, Judge Blumenfeld’s answer is no.
MiniMax argued the California court lacked jurisdiction because the company did not have enough US contacts. It also argued that MiniMax was only a brand name, not a legal entity that could be sued for infringement. The judge rejected the dismissal bid, allowing the case to proceed.
The studios also allege MiniMax used unauthorized copies of their works to train Hailuo’s image and video models. That claim goes beyond outputs. It targets the data pipeline behind the system.
A hearing on remaining procedural issues is scheduled for May 29, 2026. That date could clarify the scope of the case, but the larger fight remains open: whether Hailuo’s training, marketing, and generated content violated Hollywood copyrights.
Hailuo was allegedly marketed as a “Hollywood studio in your pocket.”
That phrase is likely to matter. It gives the studios a clean narrative: MiniMax was not merely building a general-purpose AI tool, they allege, but selling a system around Hollywood-style output.
Studios are putting AI-generated characters on trial
The complaint focuses on Hailuo outputs that allegedly featured characters from major franchises, including Marvel, Star Wars, and other blockbuster properties. The Los Angeles Times reported that the studios also pointed to characters including Darth Vader, Wonder Woman, the Minions, the Joker, Groot, Yoda, and Superman in their allegations.
Why does Disney’s presence raise the stakes? Because its catalog is built around characters that function as long-duration commercial assets across films, streaming, games, merchandise, theme parks, and licensing.
The studios’ theory is straightforward. If an AI product can generate recognizable protected characters on demand, it may undercut the licensing markets that make those characters valuable. Their case also challenges the use of copyrighted works in training, not just the final images or videos users see.
MiniMax’s implied defense posture is also familiar in AI litigation. The company sought to stop the case early by attacking jurisdiction and pleading defects rather than litigating the merits at trial. Bloomberg Law’s summary of the earlier motion said MiniMax argued the studios failed to plead jurisdiction, registered copyrightable characters, or infringement.
The court did not accept that early exit.
| Issue | Studios’ position | MiniMax’s early defense |
|---|---|---|
| Jurisdiction | US court can hear the case | California lacks authority over the company |
| Legal identity | MiniMax can be held responsible | MiniMax is only a brand name |
| Copyright claim | Hailuo generated and trained on protected works | The complaint failed to state a valid claim |
| Current status | Case proceeds | Dismissal bid denied |
The studios are seeking to restrain further alleged infringement. The Los Angeles Times reported they also requested damages of up to $150,000 per infringed work, plus attorney fees and costs.
For readers tracking how AI disputes are moving from product hype into litigation risk, this sits near a broader legal pattern we covered in $38M Fight Dies as Musk's OpenAI Lawsuit Runs Late. The facts differ, but the lesson is similar: AI companies increasingly have to defend not only models, but the legal scaffolding around them.
AI builders now have a sharper warning on US exposure
For MiniMax, the immediate consequence is procedural but expensive. A case that survives dismissal can move toward discovery, legal costs, and closer scrutiny of how the system was trained, marketed, and tested.
What records become sensitive now? Training data sources, internal safeguards, marketing approvals, user prompts, output logs, and any documentation showing how Hailuo handled recognizable characters could all become contested evidence if discovery proceeds.
That is the practical pressure point for AI developers. Copyright cases are not only about whether a model can reproduce a famous character. They can force companies to explain how the model got there.
The ruling also weakens one defensive assumption for foreign AI firms: that operating abroad can block US litigation. CryptoBriefing framed the decision as a signal that being headquartered outside the US does not automatically shield AI developers from American copyright enforcement.
That matters for enterprise buyers and investors assessing AI vendors. Unresolved copyright exposure can affect partnerships, fundraising conversations, and product deployment when a tool may be accused of generating protected media assets.
This is analysis, not a court finding: the case could increase pressure on AI companies to strike licensing deals with rights holders, especially where products are marketed around entertainment-style outputs. A settlement could create informal benchmarks. A trial could create precedent that changes the bargaining position for both studios and model builders.
The product angle also matters. As AI systems move deeper into work tools and media production, the legal risk becomes less theoretical. Our coverage of Gemini Takes Over Google I/O 2026 — and Your Workflow shows how fast AI capabilities are being pushed into everyday creation and productivity flows. Copyright rules will shape what those tools can safely generate.
The next phase turns on prompts, outputs, and training records
MiniMax now has several paths. It can answer the complaint, seek narrower rulings later, pursue settlement talks, or prepare for discovery.
Which evidence will carry the most weight? The studios will need to connect specific copyrighted works to Hailuo’s system and show how allegedly infringing outputs resemble protected material. MiniMax will likely keep challenging the scope of those claims where it can.
The May 29 hearing may address remaining procedural issues. It is unlikely to resolve the central copyright questions by itself.
Possible outcomes include a settlement, a licensing arrangement, narrowed claims, summary judgment, or a trial. Each route would send a different signal to AI companies and content owners.
If the case settles, the market may learn little about the court’s view of AI training and generated characters, but licensing economics could start to take shape behind closed doors. If it moves deeper into litigation, the record may reveal how courts evaluate AI systems that can generate branded entertainment assets on demand.
For MiniMax, the watch item is immediate: whether it fights through discovery or looks for a deal. For the wider AI sector, the sharper question is now unavoidable — how far can generative tools build around copyrighted cultural material before permission becomes the price of admission?
Impact Analysis
- The ruling keeps a major AI copyright case alive and moves MiniMax closer to discovery.
- Hollywood studios are challenging both AI-generated outputs and the training data behind them.
- The case could shape how foreign AI firms are treated in US copyright litigation.
