Andrea Moleri, Christian Internò, Ali Raza, Markus Olhofer, David Klindt, Fabio Stella, Barbara Hammer

Federated Learning (FL) enables distributed optimization without compromising data sovereignty. Yet, where local label distributions are mutually exclusive, standard weight aggregation fails due to conflicting optimization trajectories. Often, FL methods rely on pretrained foundation models, introducing unrealistic assumptions. We introduce FederatedFactory, a zero-dependency framework that inverts the unit of federation from discriminative parameters to generative priors. By exchanging generative modules in a single communication round, our architecture supports ex nihilo synthesis of universally class balanced datasets, eliminating gradient conflict and external prior bias entirely. Evaluations across diverse medical imagery benchmarks, including MedMNIST and ISIC2019, demonstrate that our approach recovers centralized upper-bound performance. Under pathological heterogeneity, it lifts baseline accuracy from a collapsed 11.36% to 90.57% on CIFAR-10 and restores ISIC2019 AUROC to 90.57%. Additionally, this framework facilitates exact modular unlearning through the deterministic deletion of specific generative modules.