Scoop: Disney sends cease and desist letter to Character.AI

Zoom in: The letter references a recent report from ParentsTogether Action and Heat Initiative that found Character.AI chatbots engaged in "grooming and sexual exploitation" and "emotional manipulation" — among other problematic behaviors — in conversations with accounts registered to children.

• Disney said the report underscores its concern with the way its characters have been utilized on the platform.
• It noted that the Character.AI service is filled with chatbots that impersonate Disney characters from classic Disney films and franchises, including Pixar movies, the Star Wars franchise and the Marvel Cinematic Universe.

What they're saying: "Character.ai's infringing chatbots are known, in some cases, to be sexually exploitive and otherwise harmful and dangerous to children, offending Disney's consumers and extraordinarily damaging Disney's reputation and goodwill," the letter reads.

• "In sum, Character.ai chose to systematically reproduce, monetize, and exploit Disney's characters, that are protected by copyrights and trademarks, without any authorization, in a way that is anathema to the very essence of the Disney brand and legacy."
• "Disney will not allow your company to hijack its characters, damage its brands, or infringe its copyrights and/or trademarks. Character.ai's conduct is egregious and must stop immediately."

State of play: In response to the letter, a Character.AI spokesperson said that Disney's characters have been removed from its service.

• While all of the characters on the platform are generated by users, the spokesperson said, "It's always up to rightsholders to decide how people may interact with their IP, and we respond swiftly to requests to remove content that rightsholders report to us. The takedown you're referring to was in response to such a request. These characters have been removed."
• "We want to partner with the industry and rightsholders to empower them to bring their characters to our platform. Our goal is to give IP owners the tools to create controlled, engaging and revenue-generating experiences from deep fandom for their characters and stories, expanding their reach using our new, interactive format," the spokesperson added.

Zoom out: Disney has taken a more aggressive stance in going after AI companies for copyright infringement in recent months.

• In June, the entertainment giant — alongside NBCUniversal — became the first major studio to sue a generative AI company when it filed a complaint against Midjourney. Warner Bros. Discovery sued Midjourney in early September.
• Earlier this month, it teamed with NBCU and WBD to sue the Chinese AI firm MiniMax, alleging large-scale piracy of their respective studios' copyrighted works.

The big picture: Disney's letter to Character.AI and its previous lawsuits indicate that the entertainment giant believes the responsibility falls on AI platforms to proactively take down user-generated content of copyrighted works.

• AI companies have typically tried to shy away from that responsibility and rather risk lawsuits than slow down the creative development of their platforms.
• OpenAI, for example, will require copyright holders to opt out of its new AI video service if they don't want their intellectual property to be used in the service, the Wall Street Journal reported Monday.

What to watch: While Character.AI appears to be willing to comply with Disney's demands, the letter shows Disney is not afraid to leverage legal action against the service should it fail to comply with its copyright demands moving forward.

• "If we do not receive written confirmation from you that Character.ai will cease the Lanham Act and copyright violations described above, Disney will take all necessary means to preserve and protect Disney's intellectual property, brands, goodwill, and reputation. All rights and remedies reserved," the letter reads.