Legal Battle Intensifies as OpenAI and Jony Ive’s ‘io’ Branding Appeal Denied
The ongoing legal dispute between OpenAI and iyO Inc. has escalated following a recent ruling by the 9th Circuit Court of Appeals. The court upheld a Temporary Restraining Order (TRO) that prevents OpenAI from using the ‘io’ branding for its forthcoming products, a decision that underscores the complexities of trademark rights in the rapidly evolving tech industry.
Background of the Dispute
The conflict began earlier this year when OpenAI announced its acquisition of Jony Ive’s design firm, io Products. Shortly thereafter, iyO Inc., led by CEO Jason Rugolo, filed a lawsuit alleging trademark infringement. The crux of iyO’s argument is that the ‘io’ branding closely resembles their own ‘iyO’ trademark, potentially leading to consumer confusion.
Court documents have revealed that in mid-2023, Jony Ive and OpenAI CEO Sam Altman selected the name ‘io’ for their collaborative venture aimed at developing AI-integrated hardware. This decision came after Rugolo approached Altman in early 2025, seeking funding for a project focused on the future of human-computer interfaces. Altman declined, citing his involvement in a competing initiative named ‘io.’ Rugolo responded with a proposal to collaborate, which did not materialize.
In response to iyO’s lawsuit, OpenAI contended that their initial product under the ‘io’ brand would not be an in-ear device or wearable, differentiating it from iyO’s planned AI-powered in-ear headphones. OpenAI also highlighted that Rugolo had proactively shared information about his company and even suggested that OpenAI acquire iyO for $200 million.
Despite these arguments, the court initially sided with iyO, issuing a TRO that barred OpenAI from using the ‘io’ branding. Consequently, OpenAI removed related promotional materials from its platforms. Seeking to overturn this order, OpenAI appealed to the 9th Circuit Court of Appeals.
Recent Court Decision
On December 4, 2025, the 9th Circuit Court of Appeals upheld the TRO, maintaining the prohibition against OpenAI’s use of the ‘io’ branding. The court’s decision was based on several key factors:
– Likelihood of Confusion: The court noted that ‘IO’ and ‘iyO’ are phonetically identical, and both companies aim to market AI-driven devices with natural language interaction capabilities, increasing the potential for consumer confusion.
– Reverse Confusion: The ruling acknowledged the risk of ‘reverse confusion,’ where a larger, well-funded entity like OpenAI could overshadow a smaller competitor like iyO, leading consumers to mistakenly believe that iyO is the infringer.
– Irreparable Harm: The court affirmed that OpenAI’s aggressive launch strategy jeopardized iyO’s ongoing fundraising efforts and posed a threat to the erosion of iyO’s brand identity.
Implications and Future Proceedings
With the appellate court’s decision, the case is set to proceed in the district court for a Preliminary Injunction hearing. This hearing will determine whether the existing restrictions will remain, be modified, or expanded. The legal process is expected to be protracted, with the Preliminary Injunction scheduled for April 2026, followed by further proceedings that could extend through 2027 and 2028.
Broader Context
This legal battle highlights the challenges companies face in protecting their brand identities amid rapid technological advancements and market expansions. The outcome of this case could set a precedent for how trademark disputes are handled in the tech industry, particularly concerning AI and consumer electronics.
