Background
In early May, OpenAI surprised the tech world with news of an estimated $6.4 billion partnership and acquisition involving "io", a new venture led by renowned designer Sir Jony Ive. Ive is best known for creating iconic Apple products like the iPhone and Apple Watch. The collaboration aims to develop a groundbreaking, screenless personal AI device described by OpenAI's CEO, Sam Altman, as "unobtrusive" and "context-aware". According to Sam Altman, the goal isn't to reinvent the smartphone, but to create an entirely new category of personal technology.
Trade Mark Dispute
Shortly after the announcement, on June 9, IYO Inc. filed a lawsuit in California against OpenAI and Ive, claiming trade mark infringement and unfair competition. IYO is an audio tech startup that is developing a revolutionary screenless device worn as custom-fitted earbuds and being markets as the "world's first audio computer". IYO argues that "io" is virtually indistinguishable from "iyO" in spoken conversation and visual branding, and therefore creates a likelihood of consumer confusion. Under U.S. trade mark law, particularly the Lanham Act, a trade mark that is "confusingly similar" to a registered trade mark can amount to infringement, regardless of differences in the actual goods or services. On 20 June, U.S District Judge Trina L. Thompson's issued a temporary restraining order, compelling OpenAI to suspend all promotional activity related to "io". The order followed a preliminary hearing in which the court acknowledged while iyO couldn't allege actual infringement since OpenAi hasn't yet released the product, she still found there was a sufficient likelihood of confusion to justify immediate relief.
OpenAI has complied with the order and published a temporary notice on its site acknowledging the complaint, though it stated it "disagrees" with iyO's claims and is reviewing legal options. Additional hearings are scheduled, and OpenAI has stated that its "io" product is "at least a year away" and will not be an in-ear device like the iyO One.
Australian Context
Australia's Trade Marks Act 1995 (Cth) (Act) provides a similar legal framework. Section 44 prohibits the unauthorised use of a trade mark that is substantially identical with or deceptively similar to an existing registered mark, especially where it relates to the same or closely related goods or services. Remedies under the Act include injunctions, damages, and account of profits. In practice, this means it is critical that Australian businesses undertake detailed trade mark due diligence, carefully choose their specification of goods and services, and monitor for potentially conflicting applications. Where a conflict arises, swift legal action, including opposition or interlocutory relief, may be utilised to protect the integrity of a brand.
Protecting Your Brand
The "io" vs "IYO" dispute offers a timely reminder that trade mark law exists to safeguard not just names, but the reputation and consumer trust that brands carry. Even tech giants like OpenAI and design legends like Ive are subject to these rules. In a competitive market, a single letter can derail years of innovation and billions of dollars in investment.
A well-executed trade mark strategy doesn't just avoid litigation, it builds enduring value. By registering your name, logo, and distinctive brand elements, you lay the groundwork for recognition, trust, and commercial leverage. And if disputes arise, the Act gives brand owners the power to respond swiftly and decisively.
For further information please contact:
James Skelton, Partner
Phone: +61 2 9233 5544
Email: jas@swaab.com.au
Hugo Mahony, Associate
Phone: +61 2 9777 8396
Email: hmm@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
