Entertainment giant Disney has issued a formal cease and desist letter to China-based ByteDance, accusing the company of unlawfully using its iconic characters to train and power ByteDance’s Seedance 2.0 artificial intelligence video generator. The dispute marks a significant escalation in the growing AI copyright dispute between major content creators and technology platforms.

Allegations of Unauthorized Use of Iconic Characters

According to a source familiar with the matter, Disney claims that Seedance 2.0 was pre packaged with a pirated library of copyrighted characters from major franchises, including Star Wars and Marvel properties. The company alleges that these characters were presented as if they were public domain material, despite being protected intellectual property.

The letter reportedly states that Seedance has reproduced, distributed, and created derivative works featuring characters such as Spider-Man and Darth Vader without authorization. Disney argues that such actions amount to clear infringement and contribute to a broader AI copyright dispute affecting the entertainment industry.

This is not the first time Disney has taken action in a similar matter. The company previously demanded that Character.AI halt the unauthorized use of its intellectual property.

ByteDance Responds and Promises Safeguards

Seedance 2.0 Came out last week and quickly became popular online in China. Some of its AI-made videos have become very popular, like one that shows actors Tom Cruise and Brad Pitt fighting in a movie. People have compared the tool to other advanced AI systems, like DeepSeek, because it can make movie-like stories from very few prompts.

ByteDance told the BBC that it would make Seedance 2.0 safer to stop people from using copyrighted characters and celebrity likenesses without permission.

The growing AI copyright dispute highlights the tension between rapid technological advancement and the protection of creative rights.

Industry-Wide Concerns and Additional Legal Pressure

It looks like the problem goes beyond Disney. Variety says that Paramount Skydance has also sent a cease and desist letter to ByteDance, accusing the Chinese company of clearly stealing its intellectual property. The fact that many studios are involved shows how serious the AI copyright dispute is and suggests that there may be legal problems in the future.

As generative AI tools get better, media companies are more worried about how their characters and franchises are used in training datasets and output generation. The AI copyright case has become one of the most important legal battles in the tech and entertainment industries.

Contrast With Licensed AI Partnerships

Disney has also embraced AI through official partnerships, which is interesting. The company signed a licensing deal with OpenAI in December. This lets the Sora video generator use characters from Star Wars, Pixar, and Marvel. That deal showed that protecting intellectual property and making new AI technology can happen at the same time if the right licensing systems are in place.

The difference between cooperative licensing deals and enforcement actions against unauthorized use shows how companies are trying to find the right balance in the changing world of AI.

The Broader Implications

This new AI copyright case could be very important for how courts and regulators around the world deal with generative AI systems that copy copyrighted material. As AI video generators become more powerful and easier to use, entertainment companies will probably pay more attention to how they get and use their content.

For Disney and other studios, protecting their intellectual property is still the most important thing they can do to keep their brands valuable and their creative control. Technology companies like ByteDance will need to make sure they follow the rules while still coming up with new ideas if they want to get through the growing AI copyright dispute that is changing the future of digital media.

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