Reuters reports that Tesla has failed in its efforts to dismiss a copyright infringement lawsuit over the unauthorized alleged use of imagery from the 2017 film “Blade Runner 2049” to promote Tesla’s cybercab at a launch event (the “Event”).

As the BBC reported, in October of 2024 Alcon Entertainment (the maker of the film) sued Elon Musk and Tesla for using an orange-tinted image of a man in a long coat looking out over a hazy ruined cityscape. The image is similar to images in the movie, as can be seen in the BBC article. 

Musk and Tesla had sought the right to use an original image from the movie, but Alcon denied it.

Alcon alleged that Musk and Tesla created the image at issue “using an AI image generator” because they “only had five hours or so to adjust their Event plans” after Plaintiff denied them a license.

Alcon alleged that Musk/Tesla asked an AI tool to make ‘an image from the [character] K surveying ruined Las Vegas sequence of Blade Runner 2049,’ or a similar direction.’

Alcon said the Event organizers suggested a “false endorsement” via a connection between the production company and Tesla.

The judge said in a tentative ruling that Alcon has a “seemingly valid and plausible theory” of copyright infringement against Tesla and its leader Elon Musk.

As the court noted,

To prevail on a standard copyright infringement claim, Plaintiff “must demonstrate ‘(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.’”

Tesla’s/Musk’s motion to dismiss was based on the assertion that Alcon can’t show substantial similarity between Alcon’s work(s) and the image that Musk displayed at the Tesla event.

Tesla’s/Musk also asserted that their actions were “fair use” in any event.

Tesla/Musk argued that at most they had engaged in non-actionable “intermediate copying.”

The court noted that the manner of copying does not matter when a plaintiff alleges only infringement by an end-product, i.e., a theory that a published book infringes the copyright in the plaintiff’s own book.

Here, however, said the court, Plaintiff alleged infringement not just by virtue of Musk’s publication of the challenged image at the Event, but by the alleged “literal copying” of the film image – or perhaps the entire film — in the course of creating the challenged image.

The court noted, as an aside, that

Moreover, at least now that the age of AI is upon us, copyright infringement lawsuits involving what might be understood as “intermediate copying” are proceeding, at least suggesting that looking only to end-products – finished novels, published images – as “infringing works” in that context is not the only means by which a plaintiff might seek to protect its copyright rights.

The Court found Plaintiff’s “literal copying” allegations to be sufficiently plausible to survive a motion to dismiss.
As for the defense of fair use, the Court believed that at least three of the four commonly-recited fair use factors – the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work, “could use some factual development, or at the very least are of uncertain application/resolution on the pleadings alone.”

Alcon alleged that, at the time of the Event, it was working on a TV series based on the movie  “and discussing with a car brand an exclusive licensed affiliation,” so that Tesla’s/Musk’s use of the image at the Event allegedly interfered with Alcon’s ability to grant license exclusivity, and thus damaged the movie’s value to Alcon.

The studio also alleged in the complaint that

Any prudent brand considering any Tesla partnership has to take Musk’s massively amplified, highly politicised, capricious and arbitrary behaviour, which sometimes veers into hate speech, into account.

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