IP Law Daily, TRADEMARK NEWS: IYO, Inc. sues OpenAI for trademark infringement, unfair competition, (Jun 12, 2025)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The lawsuit alleges that OpenAI wilfully infringed IYO, Inc.’s registered and common law rights in its IYO trademark (IYO Mark) in connection with its audio-centric hardware and software.

IYO, Inc. has filed a lawsuit against IO Products, Inc. (IO); OpenAI, Inc., OpenAI, LLC, (collectively, OpenAI), OpenAI’s CEO Sam Altman, and Sir Jonathan Paul Ive (Jony Ive)(collectively, defendants), in the U.S. District Court for the Northern District of California, alleging trademark infringement and unfair competition under the Lanham Act; contributory trademark infringement; inducement of trademark infringement; unfair competition under California Business and Professions Code; and false designation of origin and unfair competition under California common law. According to the complaint, the defendants had actual knowledge of the registered IYO Mark prior to their first use of the term IO. The lawsuit also alleges that the defendants are blatantly and knowingly usurping IYO’s goodwill and the goodwill and consumer recognition that IYO has built in its IYO Marks and its products, causing confusion in the marketplace and disrupting IYO’s marketing plans, manufacturing plans, and capital raise (IYO, Inc. v. IO Products, Inc., No. 3:25-cv-04861-TLT (N.D. Cal. filed Jun. 9, 2025)).

IYO, Inc. was founded in 2021 and has used the IYO mark continuously in commerce in the United States since at least as early as February 2, 2024, in connection with its audio-centric hardware and software, according to the complaint. IYO, Inc.’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 marketed for sale through IYO, Inc.’s website, and is available for pre-sale to the general public, with shipping expected in September or October 2025. IYO is in the process of manufacturing an initial 20,000 units for 2025.

According to the complaint, IYO owns federal trademark Registration No. 7,409,119 issued by the United States Patent and Trademark Office (USPTO) for its IYO mark covering Audio headphones; Earphones; Computer hardware and recorded and downloadable software system containing an auditory user interface in the form of a molded earpiece for use in listening to, accessing, transmitting and sharing information, applications and data in an audio format, amplifying and reducing sounds and noise, natural language processing, and allowing communication between users, electronic devices and wireless devices in Class 9. To consumers, the IYO trademark identifies IYO as the single source of products 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.

OpenAI, Inc. is an AI organization founded in December 2015 with a primary goal is to develop artificial general intelligence (AGI). As a leading organization in the ongoing AI boom, OpenAI is known for the GPT family of large language models, the DALL-E series of text-to-image models, and a text-to-video model named Sora.

Unbeknownst to IYO, IO Products, Inc. was formed as a Delaware corporation on September 21, 2023. According to the complaint, IYO, Inc. had no idea that the defendants had formed a company to work together on hardware products intended to allow users to interact with smartphones, computers, artificial intelligence, and the internet without the use of screens, keyboards, mice, or other similar physical interfaces. But the defendants knew about IYO and its technology and brand prior to adopting the IO name. On May 21, 2025, Altman and Jony Ives announced the existence of IO, its $6.5 billion acquisition of IO by OpenAI, and its decision to make this new category of computer devices 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.

IYO, Inc. alleges that the defendants’ collaboration in a new venture, IO, the name of which is a homophone of IYO, Inc.’s IYO name, and the purpose of which is to launch a product whose purpose and function is eerily similar to and competitive with IYO’s product amounts to willful infringement of IYO’s registered and common law rights in its IYO Mark or contributing to or inducing such infringement.

IYO, Inc. asserts that the defendants are not associated or affiliated with IYO and have never been authorized or otherwise licensed to use the IYO Mark in connection with any products or services. The defendants adopted the IO name with full knowledge of IYO, Inc., its product, and its IYO trademark. According to the complaint, days prior to the defendants announcing their “IO” business to the public, Mr. Tan, the co-founder of IO, requested that IYO fit members of his team for the IYO device. IYO ended up fitting seven of the defendants’ representatives to demo IYO ONE devices. Mr. Tan indicated to IYO that its product had potential. Additionally, after meeting with IYO, Inc. and experiencing the IYO ONE in person, the defendants were sufficiently interested to request that they be allowed an opportunity to review IYO’s intellectual property portfolio.

Claims, remedies sought. IYO, Inc. asserts six causes of action: (1) trademark infringement in violation of Section 32 of the Lanham Act, (2) false designation of origin unfair competition in violation of Section 43(a)(1)(A) of the Lanham Act, (3) unfair competition in violation of Section 17200 et seq. of the California Business and Professions Code, (4) false designation of origin and unfair competition under California common law, (5) contributory trademark infringement, and (6) inducement of trademark infringement.

Among other relief, IYO, Inc. is seeking a jury trial and asks the court to: temporarily, preliminarily and permanently enjoin the defendants from using the term IO or any designation or design so similar as to be likely to cause confusion, mistake, or deception in connection with the defendants’ goods and services; award compensatory and/or actual damages and to treble that award; require the defendants’ to disgorge all of its profits from its infringing acts; require the defendants to pay corrective advertising; and award IYO, Inc. punitive damages, attorney fees, and costs.

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

Judge: Thompson, T.

Attorneys: Andrew David Skale (Mintz, Levin, Cohn, Ferris, Glovsky And Popeo, P.C.) for IYO, Inc.

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

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