Rainbow Says Existing Model Releases Already Cover…

In June 2026, model Francheska Pujols filed a lawsuit against apparel chain Rainbow USA, alleging that the company used generative AI to create unauthorized depictions of her. The case centers on whether a 2024 modeling release agreement permits the use of AI to transform original photographs into entirely new compositions.

What happened

Pujols claims that Rainbow exceeded the scope of their September 2024 Freelance Model Waiver/Release/Indemnification Agreement by creating AI-generated images featuring her recognizable likeness in settings, poses, and clothing not present in the original photoshoot. While the contract allowed for certain modifications to existing photographs, Pujols argues it did not authorize the creation of new AI-generated depictions.

In a July 2026 motion to dismiss the case, Rainbow argued that the dispute is a matter of contract interpretation rather than a novel legal issue regarding artificial intelligence. The retailer contends that the 2024 agreement grants it broad rights to use images “whether intact or in part, composite or distorted in character or form, cropped or altered, without restriction as to changes or transformations.” Rainbow maintains that these provisions apply regardless of the technology used, asserting that the contract does not prohibit or restrict the use of AI, Photoshop, or other technological enhancements.

Rainbow’s defense relies on established New York contract and right-of-publicity precedent to argue that the rights granted under the agreement cover the challenged uses. The company has moved to dismiss the claims brought under the Lanham Act and New York Civil Rights Law. This case, Pujols v. Rainbow Shops, Inc., highlights a growing trend where brands defend the use of generative AI by pointing to existing contractual language in model releases, suggesting that initial legal battles over AI advertising may be decided by traditional contract law rather than new regulations.