OpenAI – Centre on Knowledge Governance

IP Meets AI: Disney’s Deal with OpenAI

Andres Izquierdo / 2 February, 2026

Originally posted at Kluwer Copyright Blog and Andrés Izquierdo Lawyers Generative AI has triggered a wave of legal uncertainty in copyright law, with over 70 lawsuits worldwide challenging the unlicensed use of creative works in AI training. The recent deal betweenDisney and OpenAI could signal a turning point. Rather than fight in courts, Disney has licensed over 200 of its most valuable characters to OpenAI’s Sora platform in exchange for equity, transforming litigation into a possible strategic alliance. But this isn’t just a licensing play; it could suggest a new model for resolving the AI–IP standoff: collaborative frameworks where rights holders and tech companies co-design value-sharing mechanisms, governance standards, and licensing architectures for the AI era. What’s in the Deal? At its core, the agreement has several pillars: ● A three-year licensing agreement allowing OpenAI’s Sora app to include more than 200 characters from Disney, Pixar, Marvel, and Star Wars in user-generated videos and images. ● Integration of selected fan-generated AI content into Disney+, marking a rare crossover from AI-created works into a mainstream entertainment platform. ● A $1 billion equity investment, plus stock warrants allowing Disney to increase its stake if OpenAI’s valuation grows, signaling a financial alignment between creative IP holders and AI platforms. ● Internal deployment of OpenAI tools across Disney’s operations, spanning content workflows, product development, and audience engagement initiatives. Together, these pillars bring a new proposal for how intellectual property can operate within the AI economy. Notably, they sidestep the legal ambiguities around fair use and training data by using private contracts to define new rules of engagement. From Litigation to Licensing: A New IP Market Architecture The timing of this deal is no coincidence. Courts in the U.S., Europe, and Asia are grappling with lawsuits over whether AI training on copyrighted works constitutes infringement. The outcomes remain uncertain, and rights holders are increasingly anxious about how generative AI models extract and remix cultural capital without consent or compensation. Rather than waiting for legislative reform or judicial clarity, Disney and OpenAI are designing their own legal infrastructure. As explored in my earlier blog post, AI is testing the boundaries of copyright law, pushing stakeholders to negotiate new frameworks where innovation and rights protection can co-exist. This is part of a broader shift in the digital economy: “private ordering” through contracts and platform governance is stepping in where statutory law has lagged. The Disney–OpenAI deal effectively preempts the courtroom by creating a market-based system where IP access is negotiated, compensated, and controlled. However, this model is not without its critics. Private contracts, while expedient, often privilege large players with bargaining power, leaving independent creators and smaller rights holders with little leverage or visibility. These agreements do not necessarily resolve systemic questions about AI training data, derivative works, or fair remuneration across jurisdictions. Moreover, private licensing frameworks could entrench power asymmetries, replicating past inequities under the guise of innovation. It is also important to consider that licensing is not the only path forward. Regulatory reform, collective licensing regimes, or technical solutions like metadata tagging and rights registries could offer inclusive and transparent alternatives. As the legal terrain continues to evolve, a mix of models – public, private, and hybrid – may be necessary to safeguard rights while fostering innovation. The Creators’ Dilemma: Value, Labor, and Legal Gaps Not everyone is celebrating. The Writers Guild of America East has voiced concerns about how such licensing deals may sideline human creators and devalue creative labor. As the Guild stated, companies like OpenAI have “stolen vast libraries of works owned by the studios and created by WGA members and Hollywood labor to train their artificial intelligence systems,” raising urgent questions about creative compensation and control. While Disney’s structured licensing may offer legal clarity, it doesn’t resolve broader questions about authorship, attribution, or the economic displacement caused by generative AI. This highlights a deeper challenge: as private deals could become the new norm, creators operating outside major ecosystems may be left with limited bargaining power and few protections. Without systemic legal frameworks, the benefits of AI monetization could remain concentrated among tech giants and legacy IP holders. The emergence of a new class of synthetic media creators, trained on decades of human-generated content, also raises fundamental questions: Who gets to participate in this new economy? Who sets the terms? And what happens to the economic and cultural value of original works in the process? Why Equity Matters: From Fees to Future Value One of the most intriguing features of the deal, as reported by Bloomberg, is its financial structure. Disney opted not to receive traditional licensing fees upfront. Instead, most of the compensation is structured as tied to OpenAI’s performance. This reflects a shift in how IP value is conceived in the age of AI. Rather than monetizing past works through one-time fees, rights holders like Disney are now betting on the future value of the platforms that use their content. Equity-based compensation aligns incentives between rights owners and tech companies, offering a shared stake in the success of AI-powered media ecosystems. Yet, this too raises questions. Equity stakes are normally inaccessible to smaller creators or rights holders, and they introduce speculative risk. As a model, it could reward institutional players while excluding those without the resources, the capacity, or the legal infrastructure to engage on such terms. What This Means for the Future of Media Law The Disney–OpenAI agreement could reshape how IP is governed in the AI era: ● It may accelerate a shift from rights enforcement to platform-based licensing models. ● It establishes financial structures where rights holders participate in AI platform growth. ● It signals that legal innovation can emerge from private strategy, not just public regulation. But it also exposes the limitations of relying solely on private arrangements to govern public cultural and legal challenges. Lawmakers, courts, and multilateral bodies must still grapple with the foundational questions that private deals sidestep. Transparency, equity, and universal access remain unresolved. For legal professionals, the message is clear: the future of IP will be negotiated in boardrooms as much as in courtrooms. As generative AI

The Great Flip: Can Opt-Outs be a Permitted Exception? Part II

By Lokesh Vyas and Yogesh Badwal. This post was originally published on Spicy IP. In the previous part, we examined whether the opt-out mechanism, as claimed in Gen-AI litigations, constitutes a prohibited formality for the “enjoyment and exercise” of authors’ rights under Article 5(2) of the Berne Convention. And we argued no. In this post, we address the second question: Can opting out be permitted as an exception under the three-step test outlined in Article 9(2)? If you haven’t seen the previous post, some context is helpful. (Or, you can skip this part) As we mentioned in the last post, “Many generative AI models are trained on vast datasets (which can also be copyrighted works) scraped from the internet, often without the explicit consent of content creators, raising legal, ethical, and normative questions. To address this, some AI developers have created and claimed “opt-out mechanisms,” allowing copyright holders or creators to ask that their works not be used in training (e.g., OpenAI’s Policy FAQs). Opt out under the Copyright Exception A question arises here: What are the other ways opt-out mechanisms can be justified if the states want to make a mechanism like that? One may say that opt-outs can be valid under the Berne Convention if an exception (e.g., an AI training exception with an inbuilt opt-out possibility) passes the three-step test. And this way, opt-outs can be regarded as a legitimate limit on holders’ exclusive rights. For reference, the three-step test was created in the 1967 revision conference, later followed in Article 13 of TRIPS and Article 10 of WCT. The test creates a room for the nations to make certain exceptions and limitations. Article 9(2) authorises the member countries “to permit the reproduction” of copyright works in 1.) “certain special cases, provided that such reproduction 2.) does not conflict with a normal exploitation of the work and 3.) does not unreasonably prejudice the legitimate interests of the author”. Although we don’t delve into the test, how opting out can be a part of an exception can be understood from an example. For instance, as Ginsburg exemplifies, if a country states that authors lose their translation rights unless they explicitly reserve or opt out of them, it would violate Article 5(2) because such rights under Berne must apply automatically, without formalities. This actually happened with Turkey in 1931, whose application for membership was rejected due to the condition of deposit for translation rights in its domestic law. (See Ricketson and Ginsburg’s commentary, paragraph 17.18.) But if an exception (like allowing radio retransmissions in bars) already complies with Berne’s provisions and applies equally to all authors, then letting authors opt out of that exception would give them more rights than Berne requires. And this should be permissible. Notably, introducing an exception, such as for AI training, must first pass the three-step test. Opt out can be built therein. However, remember that every exception presupposes a prima facie infringement. Within that frame, the opt-out offers the author a chance not to lose. Thus, it creates an inadvertent expansion of her rights beyond the convention. Additionally, opt-out can fare well with the three-step test due to the factor of “equitable remuneration to authors.” As Gompel notes in his piece, “…‘opt out’ eases compliance with the three-step test because it mitigates some of the adverse effects of the proposed copyright exception. That is, it enables authors to retain exclusivity by opting out of the compensation scheme.” Another question also exists: Did Berne contain particular provisions that directly allowed an opt-out arrangement? Well, the answer is Yes. Does opting out equal the right to reserve under Article 10bis? Not really. Setting aside the debate over formality and the three-step test, the Berne Convention contains an opt-out-style provision, albeit limited, where authors must explicitly reserve their rights to avoid specific uses of their work. Relevant here is Article 10bis of the Convention, which allows member countries to create exceptions for the reproduction of works published in newspapers on, among other topics, current economic, political, or religious issues. However, it also allows the authors to ‘expressly reserve’ their work from reproduction. Indian Copyright Act, 1957 also contains a similar provision in Section 52(1)(m). Interestingly, the right to reserve exploitation has been part of the Berne Convention since its earliest draft. It first appeared in Article 7 alongside the provision on formalities, which was numbered Article 2 in the draft. Article 7 became Article 9(2) in 1908, when formalities were prohibited and the no-formality rule entered the Berne Convention. This historical pairing raises a strong presumption: opting out of a specific mode of exploitation cannot automatically be deemed a prohibited formality. Ginsburg confirms this, citing the 1908 Berlin Conference, which clarified that the reservation/opt-out clause (then Article 9(2)) was not considered a formality. But can this special setting (created in Article 10bis(1)) be used to open the door for general opt-out AI exception measures by countries? We doubt it. As the negotiation history of the 1967 revision conference suggests, Article 10bis(1) is a lex specialis, i.e., a narrow and specific exception (See page 1134 of Negotiations, Vol. II). This means that it may derogate from the general no-formalities rule, but it cannot serve as a model for broader declaratory measures. Conclusion The upshot is that opt-outs may be de facto formalities. However, not all formalities are prohibited under the Berne Convention. The convention enables countries to make some formalities on “the extent of protection.” Three key points emerge from this discussion: One, opting out may not be a formality that prevents the enjoyment and exercise of rights, as Gompel and Sentfeln confirm, and Ginsburg argues otherwise. Two, it can be a part of an AI training exception if such an exception can pass the three-step test. When applying this test, opting out would support the factor of equitable remuneration. Three, Article 10(bis) on the right to reserve cannot be read expansively. While it can be used to justify the three-step test as Sentfleben does, it might not be extended generally. Okay. That’s it from our end. À bientôt’ Primary Sources:-