What do you get when you mix a $6.5 billion AI hardware deal with a two-letter trademark dispute? A federal judge stepping in to put the brakes on OpenAI and its new venture with famed Apple designer Jony Ive.
Startup IYO, spun out of Google’s moonshot X lab, just won a major victory in its lawsuit against OpenAI, Sam Altman, and Ive’s design studio LoveFrom. On Friday, U.S. District Judge Trina Thompson issued a temporary restraining order barring the defendants from using the name “IO” to market their new AI device—at least for the time being.
The issue? IYO claims “IO” sounds too much like its own brand. Even though the two are spelled differently, trademark infringement is based on meaning and appearance, in addition to the way the two marks sound. Courts have sided with companies in similar situations before, like Seycos vs. Seiko and XCEED vs. X-Seed. And in this case, the judge found IYO’s argument strong enough to order OpenAI to scrub all public mention of its IO product off the internet, which it did over the weekend.
The lawsuit alleges this wasn’t just a coincidence. IYO argues OpenAI and Ive’s studio knew about the IYO brand since at least 2022. They’d been in talks—actual meetings—where IYO showed off its AI earbud, the IYO ONE, and even discussed joint fundraising. According to the complaint, OpenAI expressed interest in IYO’s IP and asked for more details on its tech.
But instead of investing, OpenAI instead partnered with Ive and launched a product under the name IO—a name IYO feels is just too close for comfort.
Judge Thompson agreed that the risk of confusion was real enough to justify a temporary restraining order, which will stay in place until a full hearing in October. Until then, OpenAI can’t use “IO” or anything that might be confused with “IYO” in connection with similar products.
OpenAI disagrees with the court’s decision and is weighing its next steps. IYO, for its part, says it’s not going to back down just because it’s up against a pair of tech titans.
“IYO will not roll over and let Sam and Jony trample on our rights, no matter how rich and famous they are,” said IYO CEO Jason Rugolo.
The court’s decision is a reminder to every business, big or small to vet all proposed trademarks thoroughly. And if someone else already has a name—even one that just sounds like yours—you might want to think twice before rolling it out. Especially if you’ve already seen their pitch deck.
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