According to a recent tweet shared by AI enthusiast Nick St. Pierre, the alleged theft occurred last Saturday. It is claimed that employees from Stability AI infiltrated Midjourney’s database and stole all prompt and image pairs, an action that also caused a 24-hour outage. In response, MJ reportedly banned all Stable Diffusion developers from its services, a move supposedly disclosed internally within the company on Wednesday.
The image output themselves might not be protected by copyrights. However, that does not mean that there are no rights over the code (or prompts) used to generate those images or over the database compilations themselves (https://www.copyright.gov/reports/appendix.pdf).
The code is obviously protected by copyright. Not sure why anyone would question that?
If the prompt is protected, then the output image will be too (and by the same owner). I suspect it depends on how detailed the prompt is (just like a tweet might not be eligible for copyright, unless it’s a particularly creative joke/haiku/etc).