Ninth Circuit Affirms Trademark Injunction Against OpenAI Company in Dispute Over Similar Marks

The U.S. Court of Appeals for the Ninth Circuit on Wednesday affirmed a district court’s decision to grant a temporary restraining order (TRO) in a trademark dispute between two tech companies, IYO, Inc., and IO Products, Inc, which was acquired by OpenAI in May 2025. The order prevents IO, a company co-founded by Sam Altman and Jonathan Paul Ive, from using the IO mark in connection with products that are related to IYO’s AI-based “audio computer.” The decision was authored by Circuit Judge S.R. Thomas and joined by Circuit Judges Daniel P. Bress and Salvador Mendoza, Jr.

The case arrived at the Ninth Circuit after IO, OpenAI, Inc., OpenAI, LLC, Sam Altman, and Jonathan Paul Ive appealed an order from the U.S. District Court for the Northern District of California. That order granted a TRO motion filed by IYO, which argued that the IO mark was confusingly similar to its own IYO mark.

IYO alleged a theory of “reverse confusion,” in which consumers who encounter the senior user’s mark (IYO) believe they are dealing with the junior user (IO) because the junior user is more well-known. The dispute arose after IO’s highly publicized launch announcement in May 2025, which generated significant media attention. Both companies describe their products as aiming to replace traditional computers and provide a more natural way to interact with artificial intelligence (AI).

On appeal, IO argued that the case was not ripe for decision because it had not yet released or advertised a product and did not plan to do so for at least a year. The Ninth Circuit disagreed, finding that “trademark infringement ‘does not require any actual sale of goods and services.’” The court determined that IO’s May 21 video announcement was specifically designed to generate anticipation for its first product and could itself be considered an infringing advertisement. The court concluded that the infringement was “sufficiently imminent” because IO had a working prototype, planned to compete with IYO, would market its product with the disputed mark, and intended to release the product in 2026.

The Ninth Circuit then reviewed the district court’s finding of a likelihood of confusion for clear error. The appellate court analyzed the two “always important” factors of the similarity of the marks and the relatedness of the goods in AMF Inc. v. Sleekcraft Boats. The court found that both factors favored IYO as the marks IO and IYO “only differ by one letter and are pronounced identically.” The goods were also deemed related, as both companies are developing AI-powered devices intended to offer a new form of computing. The court also noted that correspondence from IO had described its product as “competitive” with IYO’s.

Other factors in the likelihood of confusion analysis either favored IYO or were neutral. The court found that the strength of the mark factor favored IYO because IYO is conceptually strong, while IO is commercially strong due to the extensive media coverage of its launch. The court also found that the reaction of IYO’s investors to IO’s launch could serve as a “proxy” for actual consumer confusion.

Regarding irreparable harm, the Ninth Circuit found no clear error in the district court’s conclusion. The district court had based its finding on declarations from IYO’s CEO and investors, which indicated that IO’s launch had jeopardized IYO’s ongoing fundraising efforts. The TRO was also deemed necessary to prevent the erosion of IYO’s brand. Under 15 U.S.C. § 1116(a), a plaintiff is “entitled to a rebuttable presumption of irreparable harm…upon a finding of likelihood of success on the merits” for infringement of a registered mark.

In its final decision, the Ninth Circuit emphasized the limited scope of the district court’s relief. The court noted that a recent denial of IYO’s contempt motion by the district court showed that the TRO does not prevent all uses of the IO mark. The injunction applies only to the marketing or sale of “related products,” which the court construed to mean products that are “sufficiently similar to IYO’s AI-based ‘audio computer.’” The TRO would not prevent IO from using the mark in connection with unrelated products.

Ultimately, the Ninth Circuit affirmed the district court’s order granting the temporary restraining order.