OpenAI’s “io” Hardware Blocked by Court in Major Trademark Ruling

A federal appeals court has barred OpenAI from using the name “io” for its upcoming AI device. The ruling is a significant setback for OpenAI and its design partner, Jony Ive. This decision upholds a temporary restraining order first issued in October. The case was brought by a smaller AI audio startup named iyO.

According to Bloomberg Law, the Ninth Circuit Court of Appeals found a real risk of consumer confusion. The court agreed that OpenAI’s massive market presence could overwhelm iyO’s brand. This legal fight now delays the marketing of one of the most anticipated tech products.

Details of the Legal Dispute and Conflicting Claims

The conflict centers on two similarly named companies working on AI hardware. iyO is developing an AI-powered audio computer for personal use. OpenAI and Jony Ive’s firm announced their collaboration on a device named “io” earlier this year.

iyO quickly sued, arguing the names were too similar. Court documents reveal iyO’s CEO met with Sam Altman in early 2025. He sought funding and even suggested a $200 million acquisition. Altman reportedly declined, stating he was already working on a competitive project.

OpenAI argued its first product would not be a wearable like iyO’s planned device. The company also noted iyO’s CEO voluntarily shared details. Despite these arguments, the district court sided with the smaller startup initially. The recent appeals decision affirms that initial judgment.

Broader Impact on AI Hardware and Startup Competition

This ruling highlights the fierce competition in the emerging AI hardware space. It also shows how large tech firms can face legal challenges from smaller innovators. The court was particularly concerned with “reverse confusion,” where a giant’s brand overshadows an original creator.

For iyO, the decision is a vital protection. The company argued that brand confusion would cripple its fundraising and launch. For OpenAI, it means a last-minute rebranding effort for its device ahead of a expected launch next year.

The immediate effect is a ban on using “io” for similar hardware products. The core litigation is far from over. A hearing for a preliminary injunction is set for April 2026. The full case could stretch into 2027 or 2028.

The court’s decision to block the “io device name underscores the growing legal complexities in the AI gold rush. It serves as a cautionary tale for major players moving into new product categories.

Info at your fingertips

What is the “io” device from OpenAI?

It is a planned AI hardware product developed by OpenAI in partnership with designer Jony Ive. Few public details exist, but it is expected to launch next year. The legal dispute has forced a pause on using the “io” name for now.

Why did the court rule against OpenAI?

The court found a likelihood of confusion with the existing startup iyO. Judges were concerned that OpenAI’s size would cause “reverse confusion,” harming iyO’s brand and business prospects. This justified the temporary restraining order.

What happens next in the legal case?

The case goes back to a lower court for a preliminary injunction hearing in April 2026. Both sides will present more evidence. The overall lawsuit could take several more years to reach a final resolution.

Can OpenAI still launch its device?

Yes. The ruling only prevents the use of the “io” trademark for marketing and selling hardware similar to iyO’s. OpenAI can still develop and launch the product, likely under a different name.

Who is Jony Ive in this project?

Jony Ive is the former Chief Design Officer of Apple. He left to form an independent design firm. His company is collaborating with Sam Altman and OpenAI on the design of this new AI hardware product.