A still from an old film, a classic scene decades old, can now be re-enacted by anyone who uploads a few pictures. It sounds like a fan's toy, but behind it lies a business negotiation that ran for much of half a year: when a Chinese company's generated video uses Hollywood characters, who gets to decide.
The two ends of this look a little tangled. On one end, Stephen Chow's films were turned into official templates and people are welcome to remix them; on the other, an industry group across the ocean first sent a cease-and-desist letter saying the generated characters had crossed a line. The same company signing licenses on one side and receiving warnings on the other: copyright has never been black and white.
Three Old Films on the Platform
Start with the domestic side. According to the Chinese People's Political Consultative Conference news site and Beijing News, on June 10 the Volcano Ark copyright commercialization platform of Volcano Engine went live, and Stephen Chow's Bingo Group came on board as a first batch with three films, King of Comedy, CJ7 and The God of Cookery, reaching an AI video creation copyright partnership.
The mechanics are quite concrete. The platform turns representative scenes from the films into templates; users upload a small amount of material and can generate their own famous moments with one click, while a set of marketing templates was opened to businesses. Douyin would add related features later. Licensing, protection, review, distribution and monetization were strung into one chain.
One caution here: this is not a free-for-all where anyone can alter a film. The premise is officially licensed material and templates, and the platform added portrait and copyright safety standards covering every stage before and after generation. Put simply, give rights holders a boundary they can define first, then talk about how many people get to join in.
A Letter from Hollywood
Now switch to the United States. According to China Intellectual Property News and 21st Century Business Herald, in February this year the video model Seedance 2.0 drew attention after internal testing, and also stirred controversy by generating well-known Hollywood characters; the Motion Picture Association then sent a cease-and-desist notice over it and the image model Seedream.
The MPA is not a single company; it represents Disney, Paramount, Netflix, Sony, Universal and Warner. After the letter, ByteDance replied that it would strengthen copyright protection, including limiting uploads of real-person reference images and restricting generation of famous characters. Some reports said the model's global rollout was slowed for a time because of it.
So the phrase about talking business first needs its first half restored: studios were not willing to sit down from the outset; a fairly sharp letter came first, and only then did months of contact follow. Erase that order and a negotiation is easily misread as pure goodwill.
Why not go straight to court, as happened with some other generative tools? According to media reports, ByteDance's business in the U.S. is large enough that studios would rather first work out a set of guardrails that can actually be enforced than push a major customer to the opposite side. Talking is often cheaper than suing.
Guardrails First, Business Later
The months in between were spent almost entirely on guardrails. According to media reports, in April Volcano Engine issued compliant-use guidelines requiring copyright proof for uploaded material; when the API opened fully, it added safety mechanisms such as face verification and portrait licensing alongside it.
None of this sounds glamorous, yet it decides whether a deal is even possible. Whether a face can be uploaded, who a generated figure resembles, who is liable for infringement, how revenue is split: each needs an answer first. What rights holders fear most is never lack of use, but use that spins out of control, distorts the work, and cannot be traced or recalled.
The June platform is exactly this logic put to work: write the license into the template, let rights holders draw their own boundaries, and promise a dashboard where usage and revenue are visible. With guardrails up first, IP is willing to move. Reverse the order and the deal most likely never happens.
The August Memorandum
On August 17, according to a joint announcement by the MPA and ByteDance and reports by Jiemian and Sina, the two sides signed a global memorandum of understanding, establishing a framework for intellectual property protection around models including Seedance and Seedream. From the February letter to the August memorandum, six full months had passed.
This has to be stated precisely. A memorandum is a framework, a statement of intent; it is not a law and not a court settlement. Its specific terms were not disclosed, and it certainly does not mean every dispute is settled. It signals a willingness to keep working together on guardrails, not that copyright suddenly has a standard answer. Anyone who writes that it has become law has read it wrong.
There is one more thread worth mentioning in the U.S. According to public congressional records and media reports, a bill protecting voice and likeness and restricting unauthorized digital replicas cleared the Senate Judiciary Committee in June and advanced to the Senate agenda, but has still not become law. Legislation and commercial negotiation are two parallel forces.
On Training Data, No Consensus Yet
What is easily overlooked is that everything above concerns the output side: who a generated thing resembles, whether a character can be used. The harder question sits further upstream: what a model learns from. Where the material comes from, and whether permission is needed first, get different answers around the world.
Some places judge case by case under fair use, some set aside text-and-data-mining reservations, and some treat the training stage and the final output separately: the former is more permissive, while an infringing output leaves the platform liable. The same code and the same batch of material can produce the opposite conclusion in a different jurisdiction.
That is also why companies prefer to sort out the visible output side first. Ownership of training data will not have a unified answer soon, but licensed templates, portrait verification and revenue dashboards are things that can be done today and checked by the other side. Doing what can be done is not the same as the dispute disappearing.
With Guardrails, Business Lasts
Read the timeline as a whole: a letter in February, guidelines in April, a platform in June, a memorandum in August, each step looking more like building a set of rules than dodging a lawsuit. What is unusual about a Chinese company dealing with Hollywood is not who won or lost, but that the guardrails were negotiated first.
For ordinary people the change is plain too. Want to make a short video from a classic scene? No more guessing whether you are crossing a line: the official template is right there, and what can and cannot be changed is clear at a glance. A lower barrier to creation and a clearer boundary are not contradictory.
Of course, one memorandum is far from the end. Terms are undisclosed, the training-side dispute is unresolved, and rules across countries still do not line up. But at least someone got the order right: not grow wild first and pay fines later, but guardrails first, business afterwards. That is probably the line most worth remembering from these six months.
Back to that still from an old film. Being able to re-enact it rests not only on how well a model draws, but on the unglamorous ledger behind it: who licensed it, who may alter it, how the revenue is split. Technology pushed the door open; what keeps it open are those rules that are not glamorous at all.
Disclaimer: This article is based on publicly available information and is for reference only. It does not constitute investment advice.