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While we may not be in the business of making cartoons or video games, this latest development overlaps beautifully with Intellectual Property law.
Background
OpenAI has just launched a short-form AI video app called Sora, allowing users to create short videos by simply typing a prompt. Within days, the platform has been flooded with AI-generated clips featuring iconic brands and characters - from SpongeBob SquarePants and Rick and Morty to McDonald's mascots and even Pikachu from Pokémon.
Why is this a problem?
Because characters, logos and branded imagery are protected by copyright and trade mark law. Companies like The Walt Disney Company and NBCUniversal have already sued AI platforms for using their characters without authorisation. When users generate videos that feature these protected works - especially in ways that alter their behaviour or image - it can lead to copyright and trade mark infringement.
The Dispute (or rather, the brewing storm)
In one now-viral example, OpenAI CEO Sam Altman stands alongside Pokémon characters and jokes: “I hope Nintendo doesn't sue us.” This might have been said playfully, but legally, it touches a nerve. If Sora users are generating content that uses protected characters or marks without a licence, it could expose OpenAI and users to IP infringement claims.
The legal issue is straightforward:
- Characters and logos are protected intellectual property.
- Using them without authorization is typically infringement.
- A “notice to opt out” model doesn't override existing IP rights - rights holders must usually give explicit permission before their IP can be used.
- OpenAI has said it will allow rights holders to block specific characters or request takedowns. But this reactive model doesn't remove the underlying legal exposure - especially if content spreads quickly before being removed.
Conclusion
This is shaping up to be one of the more interesting tests of how copyright and trade mark law will apply to generative AI platforms. If companies lose control over what their characters and brands say or do in AI-generated content, it won't just be a PR problem - it will be a legal one.
While no lawsuit has been filed yet, history tells us it is only a matter of time. As we have seen in past IP disputes, control over brand identity and character use is something rightsholders will fiercely protect.
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