A US federal judge asked OpenAI to stop marketing its upcoming partnership with an iPhone designer due to a trademark dispute.
OpenAI last month announced it was buying io Products, a product and engineering company co-founded by Jony Ive, the former senior vice president of industrial design and chief design officer at Apple,** in a deal valued at nearly $6.5 billion (€5.6 billion).
A competing firm called IYO that pitched an AI hardware to OpenAI CEO Sam Altman's personal firm and Ive's design firm launched a trademark complaint against the deal.
US District Judge Trina Thompson ruled late Friday that IYO, a Google-backed hardware start-up,** has a strong enough trademark infringement case to proceed to a hearing in October.
Until then, she ordered Altman, Ive and OpenAI to refrain from “using the IYO mark, and any mark confusingly similar thereto, including the IO mark in connection with the marketing or sale of related products.”
'IYO will not roll over'
OpenAI responded by scrubbing its website of mentions of the new venture, saying instead that the page “is temporarily down due to a court order.
“We don’t agree with the complaint and are reviewing our options," the company added.
IYO CEO Jason Rugolo applauded the ruling Monday in a written statement to the Associated Press that said the start-up will aggressively protect its brand and tech investments.
“IYO will not roll over and let [Altman] and [Ive] trample on our rights, no matter how rich and famous they are,” Rugolo said.
Altman said in a June 12 court filing that he and Ive decided on the io name for their collaboration "because it is a common phrase for 'input/output'" and that their intent with the collaboration "was, and is, to create products that go beyond traditional products and interfaces".
He added that they received the io.com domain name in August 2023.
'Raising the issue of our name in bad faith'
A file sent to the court from the OpenAI team alleges that Rugolo approached OpenAI several times for either funding, propositions to sell the company for $200 million or to ask for ways the companies could work together.
After io was launched on May 21, the court filing says Rugolo contacted OpenAI's Tang Tan, io's chief hardware officer, congratulating them on the launch.
When Tan said he did not want to pursue a partnership, Rugolo then raised an issue with the name for the first time.
"I was surprised to receive this email," Tan wrote in a case declaration. "Mr. Rugolo had never mentioned any issues with the io name in any of our prior communications over the past several weeks.
"It appeared to me that Mr. Rugolo was raising the issue of our name in bad faith to try to force us to do a deal with his company," he said.
What are Altman and Ive building?
In a filing to the court, Altman and Ive's lawyers say that their io project is not working on an in-ear or wearable AI device like IYO is.
"io is at least a year away from offering any goods or services, and the first product it intends to offer is not an in-ear device like the one Plaintiff is offering for “presale” (but which is also still at least months away from its claimed release date)," the filing says.
Altman previously told OpenAI employees that the io prototype would be able to fit in a pocket or sit on a desk.
The device would eventually be a third one that users could have in addition to their smartphone and laptop.
The court filing from OpenAI also says io developed several prototypes, like objects that were "desktop-based and mobile, wireless and wired, wearable and portable".
As part of this effort, io bought a "wide range" of earbuds, hearing aids and "at least 30" different headphone sets from companies, including IYO.
The order for IYO's One earbuds asked for a downpayment of $69 and would be shipped in the winter of 2024, but was never fulfilled by the company, the case added.
