Disney Sends Cease-and-Desist Letter Over AI Company’s Use of Copyright-Protected Characters

On October 1st, 2025, CNBC reported that Disney has sent a cease-and-desist letter to Character.AI demanding that the company remove its copyright-protected characters from its platform. Character.AI operates a service that allows users to create and interact with character-based chatbots, including some of the most popular Disney characters. Here, our Florida copyright infringement lawyer provides an overview of the case, the stakes, and the potential implications.

Disney Alleges Character.AI’s Services Violated its Copyrights

Florida’s largest corporation Disney had sent a cease-and-desist letter to Character.AI. The company argues that Character.AI replicated and monetized its protected characters (from Disney, Pixar, Marvel, Star Wars, and more) without permission. The letter argues such copying and public presentation constitute copyright infringement by offering immersive interactive versions of Disney’s content

A Cease-and-Desist Letter is a Step in Many Copyright Infringement Cases

A cease-and-desist letter is effectively a demand to a party to stop engaging in certain conduct. It is a common step in IP infringement cases, including those involving copyright infringement and trademark infringement. Indeed, issuing a cease-and-desist is a formal yet less adversarial demand for infringing behavior to stop before litigation. It gives the alleged infringer a chance to remedy or explain the conduct without court action. In Disney’s case, the letter demands written confirmation of compliance and warns that the company is prepared to take “all necessary means” if Character.AI continues to engage in the alleged copyright infringement.

Dispute Could Have Big Stakes for Generative AI and Copyright Law 

There are many unanswered questions about generative AI and copyright law. The clash between Disney and Character.AI sits directly at the center of AI, user-generated content, and copyright protections. If the conflict escalates, it could potentially be the legal fight that helps define how much leeway AI platforms have when users recreate or mimic copyrighted characters. If courts side with Disney, AI firms may be compelled to vet or block fan-made character bots proactively. Conversely, a more permissive ruling could expand creative uses of IP in AI systems. Here is a big copyright law question that still needs to be resolved by the courts and/or federal lawmakers:

• Can AI platforms host derivative versions of copyright protected characters without licenses?

Characters that are sufficiently distinctive (Iron Man, Elsa, etc.) are protectable creative works. Copyright gives the owner the exclusive right to reproduce, distribute, perform, display, or create derivative works based on those characters. When a platform like Character.AI allows users to create and share interactive chatbots that replicate those characters’ identities, dialogue, and personalities, courts may view this as creating unlicensed derivative works. Digital Millennium Copyright Act (DMCA) also applies. Platforms can qualify for “safe harbor” protections if they respond promptly to takedown notices and do not knowingly host infringing content.

Contact Our Florida Copyright Infringement Lawyer Today

At Perkins Law — Brand Protection, our Florida copyright infringement attorney is standing by, ready to protect your rights and your interests. If you have any questions about generative AI and copyright protection, we can help. Contact us today to arrange your completely confidential, no obligation initial case review. Our firm handles copyright law cases throughout South Florida.

Source:

cnbc.com/2025/09/30/disney-cease-and-desist-characterai-copyright.html