Judge halts OpenAI’s $6.5B Jony Ive partnership over trademark dispute

OpenAI has temporarily removed all mentions of its $6.5 billion partnership with legendary iPhone designer Jony Ive from its website following a federal judge’s ruling in favor of a trademark dispute. The legal challenge comes from IYO, an AI hardware startup that claims OpenAI’s “io Products” branding infringes on its trademark, forcing the tech giant to halt marketing efforts for the high-profile collaboration until an October hearing.

What you should know: U.S. District Judge Trina Thompson ruled that IYO has a strong enough case to proceed, issuing a temporary restraining order against OpenAI, CEO Sam Altman, and Jony Ive.

• The judge ordered them to stop “using the IYO mark, and any mark confusingly similar thereto, including the IO mark in connection with the marketing or sale of related products.”
• OpenAI responded by scrubbing its website of the May 21 announcement about acquiring io Products, Ive’s product and engineering company.
• The company’s webpage now displays a message stating it “is temporarily down due to a court order” and adds: “We don’t agree with the complaint and are reviewing our options.”

The backstory: IYO claims it pitched its AI hardware concept to both Altman’s personal investment firm and Ive’s design firm back in 2022, establishing prior use of the trademark.

• The startup is developing its own AI hardware products under the IYO brand, which it argues creates consumer confusion with OpenAI’s similarly named venture.
• IYO CEO Jason Rugolo said the company “will not roll over and let Sam and Jony trample on our rights, no matter how rich and famous they are.”

Why this matters: The legal dispute threatens to derail one of the most anticipated partnerships in AI hardware development, potentially delaying OpenAI’s push into physical AI devices.

• The collaboration between Altman and Ive was seen as a significant move to create consumer AI hardware that could rival existing smart devices.
• The case highlights how trademark disputes can impact even well-funded tech ventures, regardless of the prominence of the companies involved.

What’s next: A full hearing is scheduled for October, where the court will determine whether IYO’s trademark claims have merit and what remedies might be appropriate.