The legal battle between OpenAI and iyO took a new turn following a ruling from the 9th Circuit Court of Appeals. Here are the specifics.
### Some background information
Earlier this year, shortly after OpenAI announced its acquisition of Jony Ive’s io company, iyO, Inc. initiated a lawsuit over purported trademark infringement.
In the ensuing days, several documents were made public, revealing intriguing details, such as the attempt by iyO CEO Jason Rugolo to recruit Evans Hankey while she was still Apple’s VP of Industrial Design, prior to her joining Ive’s new venture.
The documents further indicated that Ive and Altman selected the name io in mid-2023, and that Rugolo reached out to Altman in early 2025 requesting funding for a project focused on “the future of human-computer interaction.”
At that time, Altman turned down the proposal, disclosing that he was engaged in “something competitive,” to which Rugolo responded, “ruh roh. / want to work together?”
Therefore, when iyO filed a lawsuit, asserting that OpenAI was poised to enter its sector under a similar name and with comparable products to its intended AI-driven in-ear headphones, OpenAI responded.
The firm asserted that io’s initial offering would not include an in-ear headphone or a wearable, and claimed that Rugolo had not only provided unsolicited information about his company but also suggested OpenAI acquire ioY for $200 million.
Initially, the court sided with iyO and granted a Temporary Restraining Order (TRO), preventing OpenAI from utilizing the io branding. Consequently, OpenAI removed the partnership announcement video and references to io from its website.
Following this ruling, OpenAI appealed to the 9th Circuit Court of Appeals, leading us to the latest ruling.
### The latest ruling
On Wednesday, the 9th Circuit Court of Appeals upheld the TRO, indicating that OpenAI remains barred from using the io branding to promote forthcoming products that could be akin to those of iyO.
According to iyO’s press release, the court substantiated iyO’s grievances regarding:
– **Likelihood of Confusion:** The Court observed that “IO” and “iyO” are phonetically similar and that the offerings are related, as both firms aim to market new computers featuring AI-powered natural language interaction.
– **Reverse Confusion:** The Court acknowledged the risk of “reverse confusion,” where a larger, better-financed secondary user (OpenAI/IO Products) floods the market, causing consumers to think the smaller primary user (iyO) is the infringer.
– **Irreparable Harm:** The Court confirmed that the defendants’ aggressive launch “jeopardized iyO’s ongoing fundraising efforts” and posed a threat to iyO’s brand integrity.
With the 9th Circuit Court of Appeals’ ruling, the case is expected to proceed in the district court for a Preliminary Injunction hearing, which will either maintain, narrow, or broaden the restrictions.
Do not expect a quick resolution. After the court granted the TRO, the Preliminary Injunction was set for April 2026, with fact and expert discovery, dispositive motions, and a jury trial extending through 2027 and 2028.
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