IP Law Daily, TRADEMARK—N.D. Cal.: OpenAI temporarily barred from using “IO” to sell AI computer devices, (Jun 24, 2025)

By Linda O’Brien, J.D., LL.M.

OpenAI’s use of the mark “IO” in marketing its new computer product was too similar to a California technology start-up’s trademarked “IYO” as to likely cause reverse consumer confusion.

A technology start-up established a likelihood of success on the merits of its trademark infringement claims against OpenAI over its use of “IO” to market its new product for computer devices as being too similar to its trademark “IYO,” the federal district court in San Francisco, California has held. The company sufficiently showed that it would suffer irreparable harm and the balance of the equities and the grant of a temporary restraining order was in the public interest. Thus, the technology company’s motion for temporary restraining order was granted (IYO, Inc. v. IO Products, Inc., No. 3:25-cv-04861-TLT (N.D. Cal. Jun. 20, 2025)).

A technology start-up founded in 2021, IYO, Inc. owns trademark Registration No. 7,409,119 covering audio hardware and software. IYO has used the IYO mark continuously in commerce in the U.S. since at least as early as February 2024. IYO’s most recent product—the IYO ONE—allows users to interact with their smartphones, computers, AI, and the internet without the use of screens, keyboards, mice, or other similar physical interfaces. IYO ONE is being marketed for sale through its website, is available for pre-sale to the general public, and IYO is in the process of manufacturing an initial 20,000 units for 2025.

IO Products, Inc., a hardware company focused on developing devices using AI, was acquired by OpenAI, Inc., a developer of artificial general intelligence, which is known for its large language model GPT. In May 2025, OpenAI announced its decision to make a new category of computer devices, under the brand “io” that allow users to interact with their smartphones, computers, AI, and the internet without the use of screens, keyboards, mice, or other similar physical interfaces.

On June 9, 2025, IYO filed suit against IO Products, Inc., OpenAI, Inc., OpenAI CEO Sam Altman, and IO Products designer Jonathan Paul Ive (“OpenAI”), asserting claims for trademark infringement, false design and unfair competition, violations of the California Unfair Competition Law, common law false designation of origin and unfair competition, contributory infringement, and inducement of infringement. Before the court was IYO’s motion for temporary restraining order.

Imminent injury. First, the court determined that IYO set forth sufficient allegations to establish an imminent injury for the purposes of ripeness. It was undisputed that OpenAI has not yet launched a product with the “io” mark. OpenAI’s argument that its announcement of the IO Products acquisition and development of a new family of products was insufficient to show an actual or imminent injury was rejected. OpenAI has admitted that it has a working prototype, the product would compete with IYO, the product is called by the disputed mark “io”, the product will be released in a year, it owns the domain “io.com”, the product will be mass marketed on io.com, the product announcement was titled “Sam and Jony introduce io”, and it was declined to cease using the io mark. Those allegations were sufficient to show that injury was imminent, the court noted.

Likelihood of success on the merits. The court found that IYO sufficiently demonstrated a likelihood of success on the merits as to its trademark infringement claims to warrant a temporary restraining order. It was uncontested that IYO has a valid federal registration for its IYO trademark and therefore IYO established a protectible ownership interest in the mark. OpenAI has a working prototype that will compete with IYO’s product and will be called by the disputed mark, which was sufficient to show that OpenAI has used the disputed mark in commerce in connection with the sale of goods or services. Regarding the strength of the mark, the IYO mark was conceptually strong as it was arbitrary or fanciful and the USPTO issued the registration without a presentation of secondary meaning and the OpenAI’s use of its IO mark was become so commercially strong that it has overtaken IYO’s senior mark and caused actual confusion among investors.

Additionally, IYO was likely to succeed in showing that the IYO and IO products are related and proximate in the market as both companies are developing products that are intended to allow users to interact with their smartphones, computers, AI, and the internet without legacy hardware and the intended consumers for both products are members of the general public. The appearance and sound of the respective marks are strikingly similar, confusion by IYO investors could serve as a proxy for actual consumer confusion, and evidence that OpenAI encountered the IYO mark before using “io” showed its intent in selecting the IO mark showed the likelihood of reverse consumer confusion, the court stated.

Irreparable injury and balance of the equities and public interest. IYO demonstrated that it was likely to suffer irreparable harm if OpenAI’s use of the infringing mark was not enjoined. IYO had contended that: (1) the injury was ongoing as its fundraising campaign to secure funding to manufacture its IYO ONE has faltered after OpenAI’s May announcement; (2) it is unable to recruit new talent which is required for company growth; and (3) IYO did not delay in filing this action as it immediately demanded that OpenAI cease infringement after the May announcement. In balancing the equities, IYO only seeks to enjoin OpenAI’s use of the name “IO” in connection with its new company and products and does not prevent it from pursuing a competitive product under a difference, resulting in very little harm. Finally, an injunction that prevents consumer confusion in trademark cases serves the public interest, the court concluded.

The Case is No. 3:25-cv-04861-TLT.

Judge: Thompson, T.

Attorneys: Anthony J. Viola (Mintz Levin Cohn Ferris Glovsky & Popeo PC) for IYO, Inc. Elle Xuemeng Wang (Quinn Emanuel Urquhart & Sullivan, LLP) for IO Products, Inc.

Companies: IYO, Inc.; IO Products, Inc.

Cases: AINews TechnologyInternet Trademark CaliforniaNews GCNNews