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Warner Bros. Discovery is suing Midjourney Over Use of its Property

Posted on September 5, 2025 by Brett

Warner Bros Discovery Midjourney examples with Wonder Woman

2025 is absolutely going down as the year of the comic related lawsuit. We have Diamond’s chapter 11 along with all of the side suits, then there’s artists suing Cadence Comic Art. Now, Warner Bros. Discovery, along with Hanna-Barbera Productions, Turner Entertainment, DC Comics, and The Cartoon Network are suing AI startup Midjourney claiming the tech company “brazenly dispenses its intellectual property as if it were its own.” The filing was submitted September 4.

In June, Disney and Universal decided to sue Midjourney calling it a “bottomless pit of plagiarism.” In a filing, Warner Bros. Discovery highlighted that case as related.

Warner Bros. Discovery is accusing Midjourney of producing, displaying, and distributing “unauthorized derivatives” of its intellectual property including Superman, Wonder Woman, Batman, Bugs Bunny, Scooby-Doo, and more.

What’s interesting is that Warner Bros. Discovery claims that Midjourney is infringing even if specific characters aren’t mentioned. Using “classic comic book superhero battle” brings up characters like Superman, Flash, and Batman.

Warner Bros. Discovery further claims Midjourney is aware of its “breathtaking scope of its piracy and copyright infringement” but refuses to protect copyright holders.

It is hard to imagine copyright infringement that is any more willful than what Midjourney is doing here. Midjourney is purposefully exploiting Warner Bros. Discovery’s valuable intellectual property to attract subscribers to Midjourney, and it is profiting by providing subscribers with endless copies and derivatives of Warner Bros. Discovery’s Copyrighted Works.

In the filing there’s numerous examples comparing Warner Bros. Discovery’s original art and output by Midjourney and it goes into depth of representatives of the AI company admitting they don’t seek permission to use work protected by copyright as well as its use by individuals posted to various social media sites like Reddit, Instagram, Discord, and more.

Warner Bros. Discovery is seeking damages as well as the court to block Midjourney from copying, displaying, or distributing its intellectual property. It also wants Midjourney to stop offering AI tools without copyright protection measures.

Check out the initial filings below which are packed with examples from Warner Bros. Discovery:

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The Ad Hoc Committee of Consignors Submits a Limited Objection to Diamond’s Motion Going After Sparkle Pop

Posted on September 3, 2025 by Brett

At the end of August, Diamond submitted a motion with the court going after Sparkle Pop for selling consigned goods that it did not own. Those goods are part of a battle between Diamond, comic and game publishers, and now Sparkle Pop as to who owns the inventory and who should receive any money from the sale of them.

In their motion, Diamond asked the court to enforce a stay that prevented the sale of the consigned goods while other legal matters were being decided and Diamond felt there should be damages paid for it too.

Now, the Ad Hoc Committee of Consignors, which represents some of the publishers, have submitted a “limited objection” to Diamond’s motion. While that might seem odd, it is limited and an objection to certain aspects.

The Ad Hoc Committee of Consignors is making an objection as to certain aspects. The Consignors support the relief requested by the Debtors so long as:

it is without waiver of their argument as to ownership of the stock and legal ramifications thereof;
any order granting the Motion requires that any proceeds of Sparkle Pop’s sales of the consigned inventory are held in escrow by a third party or in the court registry (and not held by the Debtors), pending a further ruling on ownership of the stock at issue and claims by the Consignors and/or Debtors to recovery of those proceeds; and
without prejudice to the Consignor’s right to recover any additional claims against Sparkle Pop to the extent allowed under applicable law.

The short version is that they don’t want this court decision to impact other decisions as to who actually owns the inventory, the money gained from the sales should go into an account not controlled by Diamond or Sparkle Pop until things are decided as to who owns what and who owes what to who, and they still want to be able to go after Sparkle Pop if they choose to do so.

In Diamond’s original motion it included the words “for purposes of this motion” which we took as to ease the concerns of the Ad Hoc Committee. But, that’s clearly not the case and there’s more to worry about and raise to make sure everything is covered.

They Ad Hoc Committee is protecting their previous arguments and trying to prevent Diamond from using this to help its claim it has a right to sell consigned inventory.

What stands out also is this nugget:

Although the Chief Restructuring Office, Robert Gorin, testified in August that the Debtors’ Transition Services Agreement (“TSA”) permits the Debtors to sell consigned stock and then require Sparkle Pop to “pick, pack and ship” that stock at Debtors’ cost, in reality no provision exists in the TSA that gives Sparkle Pop the right to sell the consigned stock.

The Ad Hoc also believes Diamond’s motion would:

…permit Sparkle Pop to continue selling consigned goods absent a Court Order authorizing the Debtors to assign the consignment contracts to Sparkle Pop after first curing any defaults thereunder.

Reading the transcript, what seems to be in question is Diamond’s “hiring” of Sparkle Pop to ship and pack any consigned goods Diamond sells.

We fully expect publishers to step in with their own lawsuits and court motions against Sparkle Pop for the sale of the consigned goods and this might be the first step in exactly that.

You can read all of the documents below:

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Diamond Chapter 11

Alliance vs. Diamond Gets Movement with a Counterclaim and Omnibus Opposition

Posted on August 21, 2025 by Brett

While this week has been focused on Diamond’s Chapter 11 hearings, there’s other lawsuits that are orbiting the Diamond Chapter 11 saga. There were two filings in that court case which involves the claim by Alliance Entertainment of fraud by Diamond during the bidding process for Diamond’s assets. Alliance was the winning bid at one point (then they weren’t, then they were again, then they withdrew their bid and weren’t again). They withdrew their bid claiming “fraudulent misrepresentation” by Diamond where they didn’t disclose their relationship with Wizards of the Coast who were ending their distribution deal with Alliance Games (different company than the bidder Alliance Entertainment).

Diamond filed to dismiss the lawsuit by Alliance Entertainment against Diamond Comic Distributors but Alliance has responded to that. Alliance lays out six points, 28 cases, and 2 rules to make their point. It’s a Counterclaim to Diamond’s Counterclaim.

It dives deep into the cases but also goes over the basic facts from Alliance’s perspective of the bidding process for Diamond’s assets:

On January 14, Diamond filed chapter 11, and Raymond James & Associates was hired to commence a sale process for all or substantially of Diamond’s assets;
Raymond James set of a Virtual Data Room featuring 2,145 documents for purchasers and what Alliance calls “limited information.” There’s a distributor agreement between WOTC and Alliance Games from December 8, 2021 and a second amendment dated January 1, 2025 but the expiration dates of the agreement are redacted;
Alliance Entertainment singed a confidentiality agreement on October 2024 which means Diamond was planning on a sale at least 3 months before they declared chapter 11;
On February 11, 2025, the Court entered an order setting a deadline for bids;
Alliance submitted a bid of $51,559,450 which included an assumption of certain liabilities but excluded certain adjustments;
Alliance wired a depost of $3.6 million;
On March 21, 2025, Raymond James notified Alliance it was conditionally approved as a Qualified Bidder but did not meet certain requirements and could not be approved;
After an extension and revisions, on March 23, 2025, Alliance was notified it was a Qualified Bidder;
The auction for Diamond was held on March 24 and March 25;
At the end of the auction, Alliance’s bid of $72,2450,000 was determined to be the highest and “best” bid;
Diamond demanded changes and Alliance agreed to pay $85.37 million for Diamond’s assets;
Diamond then said it would seek approval of the backup bid by Universal Distributors and Ad Populum which was then filed on April 5 which was a “lesser value” than Alliance’s bid;
Alliance filed an adversary proceeding and motion for an injunction to stop the sale;
Alliance’s challenge was successful and they were declared the winner;
Alliance increases its deposit to $8.5 million;
Alliance was to by $85,368,053 at that point with $61,613,309 in cash due at closing with the closing date no later than 5pm ET on April 25.
On April 12, 2025 (the document says 2024) Alliance gets an unredacted copy files and discovers the distribution agreement with WOTC expired on December 31, 2024 and was then extended to March 31, 2025. A third extension was produced that extended it to April 30, 2205. That was signed on March 12 by Diamond and WOTC on April 1;
Alliance Entertainment has now discovered Alliance Games’ relationship with WOTC isn’t what they thought and Alliance Entertainment sees that as a “material adverse change” to the assets;
Diamond’s counsel calls Alliance’s counsel stating WOTC’s distribution agreement ends on April 30. The call happened on April 17;
Alliance attempts to negotiate an adjustment to their purchase price reflecting the loss of WOTC revenue but Diamond “refused to meaningfully engage”;
On April 23, Alliance informs the loss of WOTC would reduce Alliance’s revenue by 25% and “fundamentally alters” the economic projections and Alliance wants a discussion on the impact and necessary amendments to the agreement. If there’s no resolution, Alliance would terminate the purchase agreement on April 24, 2025 at 4pm;
Diamond didn’t engage in discussion so the deal was terminated stating that Diamond’s “breach was incurable” and claiming “fraud.” They also wanted the release of their deposit.
On June 4, 2025 (the filing says 2024), Diamond sent their own letter terminating the agreement which had technically been void since April 2024.

An omnibus opposition to the defendant’s partial motions to dismiss the complaint was also submitted. It lays out 7 arguments for their case along with 54 cases and 1 rule knocking down the defendant’s (which is more than Diamond) reasons they think things should be dismissed.

Both are a lot of legalese and court cases but it’s all an interesting read with a more laid out timeline as to what happened with Alliance’s bid for Diamond’s assets.

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17 Artists File a Lawsuit against Cadence Comic Art and Paolo Belfiore

Posted on August 18, 2025 by Brett

2025 might go down as the year for comic related lawsuits. A lawsuit on behalf of 17 artists was initially filed on August 7 in the Southern District of New York against Cadence Comic Art and Paolo Belfiore.

The lawsuit is over “egregious misconduct” by Cadence Comic Art and Belfiore accusing them of defrauding the plaintiffs out of money. Cadence Comic Art is/was a popular site to purchase original comic art. In full disclosure, I’ve purchased comic art from the site, an original piece by Jenny Frison, one of the plaintiffs, about twelve years ago, and some of the complaints sound similar to that purchasing experience.

The plaintiffs include Becky Cloonan, David Marquez, Wesley Craig, Paolo Villanelli, Leila Leiz, Alessandro Cappuccio, Danai Christina Kilaidoni, Elena Casagrande, Valerio Schiti, Mahmud Anjum Asrar, Joelle Jones, Yildiray Cinar, Rafael Albuquerque, Tyler Crook, Jenny Frison, Pia Guerra, and Jill Thompson, and they are being represented by Adwar Ivko.

The 15 page complaint accuses Cadence Comic Art with Belfiore of breaching their fiduciary duties by not providing accurate and regular account statements, commingling funds, and neglecting to safeguard their work from loss, damage or theft. They claim financial harm and that the actions violate ACAL. N.Y. Arts & Cultural Affairs law (ACAL) is that when an artist consigns a work of art to a merchant, proceeds from the sale are considered property held in a statutory trust which prevents it from becoming property of the art merchant’s creditors.

The initial filing states the amount in dispute is over $473,000 and that the defendants collected over $236,253 in commissions for their services with this going back to 2008. There was also “secret sales and secret transfers” which were failed to be reported. In addition, unsold consigned artwork and inventory records weren’t returned.

Further accusations include holding over 49 pieces of art which had not been sold and refusing to return the items even after being sent a formal demand from the artist’s lawyer that also included a cease and desist from further representing the artists. A demand was sent to the defendant on September 10, 2024 and they never responded with a follow up on November 8, 2024 with no response.

They are asking the court to take action to return the art, get an accounting of all sales, transfers, or other disposition of the art, and for damages in excess of $473,000.

After some initial filing issues by the attorney for the artists, things are getting rolling with a summons issued to Belfiore and Cadence Comic Art on August 13, 2025.

Cloonan v. Cadence Comic Art Inc is being overseen by Judge Jennifer L. Rochon. A pre-trial conference is currently set for November 18.

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Sparkle Pop Amends its Complaint Against Alliance Entertainment

Posted on July 30, 2025 by Brett

In January 2025, Diamond Comic Distributors filed for Chapter 11 bankruptcy. In the months since, the drama that has come out due to the proceedings has been worthy of an HBO miniseries with bids made, bids rejected, last minute switches, and now accusations of NDAs broken and corporate espionage. On June 9, 2025, Sparkle Pop, one of the winners of Diamond’s assets, filed a complaint against Alliance Entertainment and asked for a temporary restraining order. Alliance Entertainment was the original winning bidder for Diamond’s assets during the bankruptcy but pulled its bid accusing Diamond and its representatives of fraud. During San Diego Comic-Con, that initial complaint was amended with a bunch of changes.

The changes, which you can see below, seems to tighten up the language a bit as well as add some more specifics as to what Alliance is accused of and how it negatively impacts Diamond. That is likely in response to Alliance who said the initial complaint was very general without specifics and examples of what it was being accused of.

Now, Sparkle Pop has expanded its accusation surrounding the theft of trade secrets, laying out exactly what that is including “customer information,” “vendor information,” “employee information,” and “marketing information.” It goes into detail that Diamond has built up a knowledge of the product mixes that customers would be interested in and that a competitor would not know that detail, even if they knew the identity of vendors/customers. Weirdly, it mentions employee compensation as something that was a “trade secret,” when it could easily have been ascertained by just asking individuals. Conversations about salaries and salary ranges seem normal, even among competition.

It now straight up accuses Alliance of never really being interested in Diamond and instead it was all a ruse to expand Alliance’s “reach and its product portfolio.”

There’s a lot of weird statement of details too like getting a list of Diamond employees, something that can be gained from LinkedIn with little effort.

There seems to be an effort with this amended complaint to strengthen Sparkle Pop’s case, it now says that in the acquisition of Diamond by Sparkle Pop, the APA says that Sparkle Pop can now defend Diamond’s “intellectual property” and “trade secrets,” something Alliance has said Sparkle Pop had no standing to do.

What does seem new are details regarding Alliance’s hiring of former Diamond Staff. Mike Schimmel, former head of sales at Diamond, is particularly singled out. The timeline states that Schimmel resigned and only after did Sparkle Pop/Diamond send out an email firing staff. Afterwards, Schimmel obtained that email and Schimmel was not dismissed or fired by Sparkle Pop/Diamond. Further, it says the six other employees hired by Alliance were part of a list that Schimmel provided Alliance.

There does seem to be one error we found. In point 61:

“In particular, several reported that Diamond Comic had made concerted efforts to recruit and solicit Diamond Comic employees at the Los Angeles Toy Fair, held between April 28 and May 2, 2025.”

We think they mean “Alliance had made concerted efforts…”

It would really seem that the possible loss of Amazon as a client is what Diamond/Sparkle Pop is scared of. It’s called out in point 68 and 69 and has been mentioned before.

You can keep up with the full history, including a timeline, of Sparkle Pop vs. Alliance here. You can read the new amended complaint below as well as the “red line” version which shows everything that has been changed from the initial complaint.

Overall, the new amended complaint feels like it’s a bit more focused, a stronger argument, with more details.

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Dynamic Forces/Dynamite’s Motion to Expedite their Hearing to get their $1 million owed by Diamond Denied

Posted on July 2, 2025 by Brett

A hearing was held today regarding the motion filed by Dynamic Forces to expedite their claim against Diamond. In Dynamic Force’s motion, they say they’re owed over $1 million for shipments made to Diamond and Ad Populum. They state the majority is administrative expenses and their original motion highlighted $509,114.21 worth of goods that were sent to Diamond.

In Dynamic Forces’ motion they stated that due to the money owed, it doesn’t “have the funds to make payroll next week” if it isn’t promptly paid by Diamond.

This puts Dynamic Forces and Dynamite in a clearly difficult spot as they’ve stated the financial hardship they would be under if not paid.

While we don’t know the exact reasons given for the denial, the motion states “For the reasons stated on the record at the hearing held on July 2, 2025.”

We’ll see if we can find out any more details as to the logic of the decision. What this means for the future of Dynamic Forces/Dynamite Entertainment is unknown.

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Dynamic Forces Files a Motion to Expedite its Claim Against Diamond in order to meet Dynamite’s Payroll

Posted on July 1, 2025 by Brett

Dynamic Forces, aka Dynamite Entertainment, has filed a motion to expedite the hearing concerning its claim against Diamond. The proposed dates are July 3 or July 7 for the hearing.

The motion states that Dynamite is owed over $1 million for shipments made to Diamond and Ad Populum, “a majority of which are administrative expenses.” The original motion had mentioned $509,114.21 owed as well as lawyer fees, etc. Dynamite is described as a “small company” with less than 30 employees and “does not have the funds to make payroll next week, if it is not promptly paid by the Debtor.“

In the motion, Dynamite states there’s other publishers unpaid “millions of dollars of shipments post-petition.”

The lack of communication is also raised, that Diamond has had weeks to prepare for a hearing and have not communicated with Dynamite regarding the motion.

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Diamond and more Defendants Attempt to Dismiss the Alliance Lawsuit Against Them

Posted on July 1, 2025 by Brett

Alliance Entertainment has a lawsuit against Diamond Comic Distributors, Comic Holdings, Comic Exporters, Diamond Select Toys & Collectibles, Raymond James & Associates, Getzler Henrich & Associates LLC, Robert Gorin, Charlie Tyson, and Dan Hirsch claiming there was fraud committed during the bidding process for Diamond’s assets. This is different than the general Chapter 11 process of Diamond’s or Sparkle Pop’s lawsuit against Alliance. They’re all related though.

At its heart, Alliance claims that the group “misrepresented the status of the Debtors’ relationship with Wizards of the West Coast,” the publisher of Magic: The Gathering. Alliance says that WotC made up of about 25% of Alliance Gaming (one of Diamond’s assets being purchased) revenue and that they conspired to get Alliance Entertainment to pay more than it was worth and on multiple occasions misrepresented Diamond and Alliance Gaming’s relationship with WoTC. In December 2024, WoTC said it wouldn’t renew its distribution agreement with Alliance Gaming. Chapter 11 was filed in January 2025. Alliance Entertainment said that it wasn’t until April that they were informed that Wizards of the Coast would not be renewing its distribution agreement and that Alliance had been attempting to verify that agreement well before but were denied by representatives of Diamond.

Multiple motions have been filed to dismiss counts II through V of the complaint:

II – Fraud
III – Aiding and Abetting Fraud
IV – Negligent Misrepresentation
V – Breach of Implied Covenant of Good Faith and Fair Dealing

There’s a lot more details as to the dealings between Alliance Entertainment and Diamond during the proceedings. The motion to dismiss goes through the Alleged Facts followed up by Legal Arguments as to why they should be dismissed with a lot of references to prior legal cases. The APA (the purchasing agreement) comes up in this case, it’s been highlighted in others, and Diamond and the defendants state there’s a clause that prevents claims “based upon extra-contractual statements or omissions.” Alliance Entertainment made its decision to end its bid, according to the new motion, after learning more details outside of the purchase agreement. Alliance Entertainment then wanted its deposit back but Diamond denied the allegations at which point Alliance Entertainment sued. The defendants call the lawsuit an “obvious play for leverage” to put pressure on Diamond to return the deposit.

In the response, Diamond and the defendants refute Alliance Entertainment’s claim that they attempted to hide the fact Wizards of the Coast was not extending its distribution agreement, calling it “100% false,” even claiming redactions, which Alliance points to as keeping key info from them, are a normal part of the process.

Diamond and the defendants go on to say the allegations by Alliance are vague and all tied together so if one claim falls apart, they all fall apart, it’s further reason it should be dismissed.

Here’s some of the new information out of the following:

Alliance Entertainment felt the loss of Wizards of the Coast’s distribution agreement “warranted a downward adjustment of the APA purchase price in the range of $18-$25 million.”
Alliance Entertainment’s original bid was $85.37 million in March
Alliance Entertainment’s revised bid was $58.9 million also in March
Diamond held a belief that Alliance Entertainment always was planning to back out of its bid
In April Diamond told Alliance Entertainment that it was going to go with Universal Distribution and Ad Populum at which point Alliance Entertainment agreed to the original agreed upon price
Alliance Entertainment’s deposit was $8.5 million

It’s all an interesting read about the back and forth, documents provided, redactions (and how that’s normal) and more. It reads more on technicalities and clauses in the purchasing agreements than an outright denial of obfuscation and fraud and the dismissals are really tied into parts of Alliance’s lawsuit that don’t stand on their own.

You can read all of documents below and there’s a lot to go over. We’ll still pouring over the details!

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Key Documents in Ad Populum’s Purchase of Diamond and lawsuit against Alliance Revealed with Juicy Details

Posted on June 24, 2025 by Brett

In the lawsuit between Ad Populum/Sparkle Pop and Alliance Entertainment, a motion to seal documents was denied, resulting in numerous business documents to be unredacted. The documents give a deeper insight into the purchase process as well as Ad Populum/Sparkle Pop’s takeover of Diamond’s assets during the Chapter 11 process.

We’ve put together this center featuring more details as well as a timeline concerning the ongoing lawsuit.

Asset Purchase Agreement

Ad Populum/Sparkle Pop purchased Diamond for a previously reported $7,459,050 less any critical vendor payments and amounts owed to NECA, Wizkids, and their affiliates (those companies are sister companies of Ad Populum/Sparkle Pop. In reality, that $7.5 million isn’t the final amount and there’s a formula involved based on a lot of factors that isn’t yet determined and has some due dates. For instance, Sparkle Pop needs to provide a report to (old) Diamond of the “Incentive Amount” which is a formula that makes my head hurt.

There’s also a lot of who is responsible for what and basically, Sparkle Pop and (new) Diamond is not responsible for the debts of (old) Diamond.

In the APA, Sparkle Pop and (new) Diamond was to “offer continued employment to most employees who are principally engaged in Diamond’s business on the same or similar terms as their current terms of employment. Sparkle Pop doesn’t have to provide continuing employment to any of Diamond’s employees, including, without limitation, senior management or executives. (old) Diamond is responsible for any liabilities like severance earned before the closing date of the sale.” Sparkle Pop gutted key staff not long after its takeover.

There is a Termination agreement which likely covers Alliance Entertainment’s not going through with its winning bid of Diamond and its assets.

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Transition Services Agreement

Also revealed is the Transition Services Agreement which covers what Diamond needed to provided Sparkle Pop in the handover. While just interesting to read, there’s nothing very juicy as far as details.

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Non-Disclosure Agreement

The Non-Disclosure Agreement (NDA) is part of the lawsuit by Sparkle Pop against Alliance Entertainment. The NDA is dated October 26, 2024, almost three months before Diamond declared bankruptcy showing they knew they were in trouble for quite some time. It lays out the terms that bidders had to agree to including:

The Evaluation Material was to only be used to evaluate the transaction, aka buying Diamond.
Anyone that doesn’t win the bid has to return any copies of the evaluation material.
It defines what evaluation material is and that’s basically anything one couldn’t already get other ways.
THIS ONE IS KEY. Until the deal is done, bidders can’t initiate or maintain contact with any officer, director, employee, agent, customer, creditor, supplier, vendor, or other business associate of Diamond without the permission of Diamond’s CEO.

That last point is a key part in the argument against Alliance’s hiring of former Diamond employees. This is mentioned and highlighted in the cease-and-desist letter that was also released and you can read below.

For a period of two years from the date hereof, you shall not solicit for employment or, directly or indirectly, hire any employee of the Company or any of its subsidiaries with whom you have had contact during the period of your investigation of the Company or its subsidiaries or whose identity you learned during such period; provided, however, that the foregoing provision will not prevent you from soliciting or employing any person who: (i) responds to a general solicitation of employment through an advertisement not specifically targeted at the Company or its employees; or (ii) has not been an employee or an independent contractor of the Company for at least one hundred and eighty (180) days prior to the commencement of employment or service discussions between you and such employee or independent contractor. It is understood that all requests for information, tours and meetings, all questions or discussions relating to the procedures in making a proposal and all communications regarding the Transaction will be directed to the Company’s financial advisor, Raymond James & Associates, Inc. (“Raymond James”). The Company shall be free to conduct the process for exploring a potential Transaction as they in their sole discretion shall determine and to discontinue or change such process (including any previously announced rules or procedure) at any time without notice to you, and none of the Company, Raymond James, or any of their respective officers, directors, employees, agents or affiliates, shall have any liability to you as a result of such process.

When Alliance contacted Diamond employees or vice-versa that were hired will be key to the lawsuit.

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Employee Manual

Also part of the legal dispute between Sparkle Pop and Alliance is Diamond’s Employee Manual which you can read in its entirety below.

The manual lays out some of the benefits from the company, its history, its organizational structure, and sister companies among other things to open things up.

It makes it clear that employees are “At Will” in 1.01, a key point raised in Alliance’s objection to Sparkle Pop’s lawsuit. It states that employees are free to resign at any time and Diamond can terminate employment at any time.

Use of confidential business information is also a part of the lawsuit and is first mentioned in the document at 1.06 “Non-Disclosure” and lists examples:

compensation data
computer processes
computer programs and codes
contracts
customer information (preferences, business plans, etc)
customer lists
financial information
marketing strategies
pending projects and proposals
vendor information and lists

1.07 “Conflicts of Interest” is also important as it specifically mentions employees can’t use company time, equipment, facilities, etc. to engage in or pursue another business or occupation. Sparkle Pop has intimated this was done by employees.

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Exit Interviews

Exist Interviews of the employees who left Diamond for Alliance is also an exhibit Sparkle Pop is relying on for their case. Each is key in why individuals left but also gives us an idea of what work life was like at Diamond and thoughts of the employees about the purchase and subsequent communication/management of Sparkle Pop concerning Diamond.

What’s interesting is it features one less exit interviews than those left. Presented are six employees when seven left the company. An exit interview by Mike Schimmel isn’t present and he’s one of the former Diamond employees at the center of the lawsuit. You can read his declaration in support of Alliance that refutes some of Sparkle Pop’s key claims, with evidence.

Lee Butman left for Alliance and said that he sent out his resume for a few months and needed stability for him and his family. A lack of communication from Ad Populum led to the decision. A “Merchandise Team Manager” at Diamond, he is now the “Buyer – Consumer Product Specialist” at Alliance.

Matt Demory also said he needed to do what was best for his family and that Diamond had lost “too many employees and the core competency” and wasn’t sure how Diamond Book Distributors sales was supposed to function. An “Assistant Manager – Print Team” at Diamond, he’s now a “Buyer” with Alliance Entertainment and specifically highlights that Alliance “has their own systems and way of doing things.”

Joe Lunday who was Diamond’s “Director of Ecommerce Sales” is helping Alliance “build the collectibles and toy program.” Lunday mentions his concern over Diamond’s future as to why he was leaving and that morale was very low with Ad Populum providing no communication. Lunday also highlights a meeting with Ad Populum’s owner Joel Weinshanker that was supposed to be 15 minutes but lasted 4 minutes and felt like it was “2 minutes longer than Joel would have liked.” Lunday described the meeting as off putting and that he walked away with the impression the purchase was really just for Diamond’s warehouse. Others had the sim impression.

Trista Peterson was a “Sales Manager” for Diamond and stressed she wasn’t poached by Alliance and had applied for the company months ago which was allowed according to the above bidding agreement.

Sadie Campos was Diamond’s “Business Development Manager” and it was discovered through LinkedIn she was leaving for Alliance. There is again a mention of a lack of communication even when it came to major events like shutting down Diamond Select Toys.

Ryan Shelkett was Diamond’s “Executive Director of Applications Development” and moved to Alliance as their “Vice President of Purchasing.” Shelkett said Alliance contacted him about a job offer but he had been looking for a job since Diamond’s bankruptcy announcement but had stopped because he was told that he’d receive a retention bonus of $16,000 if he stayed which he had not received as of his exit interview. With Alliance Shelkett noted he and Mike Schimmel would be working in completely different departments than their time at Diamond and his employment with Alliance came about after running into someont.

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Cease-and-Desist Letter

Finally there’s the Cease-and-Desist Letter sent to Alliance Entertainment. It highlights the section we highlighted above about contact with employees of Diamond and generally highlights what has been mentioned in Sparkle Pop’s lawsuit.

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If you want to keep up with this important lawsuit, check back regularly here or our center where you can get all of the information in one handy place including a timeline.

Disney and Universal Sue Midjourney calling it a “Bottomless Pit of Plagiarism”

Posted on June 12, 2025 by Brett

It took long enough, but major Hollywood studios are jumping into the fight against AI. Disney and Universal have filed a lawsuit against Midjourney, the AI image generation tool. They called it a “bottomless pit of plagiarism” that generates “endless unauthorized copies.” There’s already a class action lawsuit against Midjourney by various artists that was launched in 2023.

The complaint features images that show how Midjourney uses the studios’ intellectual property. One image of Yoda from Star Wars holding a lightsaber is an example and it was generated by using the prompt “Yoda with lightsaber.”

AI is arguing that their use of other’s creations and copyrighted works is fair use. Some execs have admitted publicly if they had to pay for the use, there’d be no business model as it’d be too cost prohibitive. The question really before the courts is if what AI is doing is transformative enough to fall under fair use. The end answer may be what’s generated is but what is used to get there isn’t. Some lawyers have stated that Disney’s examples make it a very hard case for Midjourney to win. The Disney and Universal complaint specifically highlights how Midjourney hurts and threatens their business.

In an interview with Rob Salkowitz at Forbes, Midjourney Founder/CEO David Holz stated:

It’s just a big scrape of the internet. We use the open data sets that are published and train across those. There isn’t really a way to get a hundred million images and know where they’re coming from. It would be cool if images had metadata embedded in them about the copyright owner or something. But that’s not a thing; there’s not a registry.

The quote has been taken as a tacit admission Midjourney was trained on copyrighted material.

Disney and Universal are asking Midjourney to “adopt technological measures” to prevent image generation using infringing materials. They also claim Midjourney ignored theur demands, cleaned copies of Universal and Disney’s work during the training process which created more copies of the material.

Up to this point, it’s mainly been the creators themselves leading the fights against AI theft with numerous lawsuits launched against multiple AI companies. Other businesses have cut deals to allow their content to be used to train AI models.

Disney vs Midjourney

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