OpenAI, Inc. v. Open Artificial Intelligence, Inc.

Background

OpenAI, Inc. and Open Artificial Intelligence, Inc. used nearly identical names—“OpenAI” and “Open AI”—for artificial-intelligence-related activities. OpenAI was founded in December 2015 and launched OpenAI Gym in April 2016. Guy Ravine purchased the “open.ai” domain in March 2015 and applied to register “Open AI” with the United States Patent and Trademark Office the day after OpenAI announced its founding. The trademark office rejected the application because the mark was descriptive and the filing did not show use in commerce. Ravine later submitted a substitute specimen depicting his product Hub and registered the mark on the Supplemental Register.

OpenAI later developed products including ChatGPT and Dall-E 2. After those products became successful, Ravine launched similar chatbot and image-generator products called Ava and Boom. OpenAI sued in 2023, asserting five claims: federal trademark infringement and unfair competition, common-law trademark infringement, fraudulent registration, cancellation for lack of bona fide use, and cancellation for misrepresentation of source. Ravine and Open Artificial Intelligence, Inc. asserted seven counterclaims, including federal and common-law trademark infringement and claims seeking declarations about ownership, non-infringement, and invalidity.

Summary judgment on cancellation claims

The court granted OpenAI summary judgment on its claims for fraudulent registration, cancellation based on no bona fide use, and cancellation based on misrepresentation of source. The court also granted summary judgment against Ravine’s corresponding counterclaim under the federal trademark statute for registered marks.

The court found no genuine dispute about Ravine’s representations to the trademark office. It concluded that Hub was not available in 2015, when Ravine initially filed his application, and that the substitute specimen did not show actual commercial use. The court also found that Ravine submitted a version of Hub without date stamps that would have shown the specimen was not available in December 2015. It concluded that the evidence established knowledge and intent to mislead the trademark office.

Ravine’s trademark counterclaims

The court granted OpenAI summary judgment on Ravine’s remaining counterclaims for federal trademark infringement, common-law trademark infringement, and a declaration that Ravine owned the “Open AI” mark.

The court ruled that Ravine’s mark was descriptive rather than inherently distinctive because it described a feature of his services. A descriptive mark can receive protection if it develops “secondary meaning,” meaning that consumers associate the mark with a particular producer. The court found that Ravine presented no evidence showing that his mark acquired secondary meaning before OpenAI’s relevant use. It therefore rejected Ravine’s infringement and ownership theories.

OpenAI’s trademark claims

The court granted OpenAI summary judgment on its federal and common-law trademark-infringement claims and on Ravine’s remaining counterclaims seeking declarations of non-infringement and trademark invalidity.

OpenAI agreed that “OpenAI” was descriptive, so the court considered whether the mark had acquired secondary meaning and when that occurred. The court found that OpenAI had acquired nationwide secondary meaning by at least November 2022. It relied on evidence including OpenAI’s product use, website traffic, product users, media coverage, industry participation, research publications, social-media activity, and evidence that consumers associated the name with OpenAI.

The court found that Ravine’s earlier uses involved collaboration and communication tools, while OpenAI developed generative-artificial-intelligence products. The court concluded that Ravine moved into OpenAI’s market segment when he launched Boom and Ava after OpenAI had developed similar products. The court also found actual customer confusion and copying. It concluded that Ravine’s use of “Open AI” for Boom and Ava infringed OpenAI’s trademark.

Motions to strike

Ravine moved to strike evidence and arguments that OpenAI submitted with its reply. OpenAI moved to strike Ravine’s motion as an unauthorized additional filing. The court found that OpenAI properly submitted its reply evidence in response to Ravine’s opposition, but it struck OpenAI’s evidentiary objections to the extent they violated the local rule requiring such objections to appear in the brief or memorandum. The court therefore granted in part Ravine’s motion to strike and denied OpenAI’s motion to strike.

Final orders and effect

The court granted OpenAI’s motion for summary judgment in full, granted in part defendants’ motion to strike, and denied OpenAI’s motion to strike. It permanently enjoined Open Artificial Intelligence, Inc., Guy Ravine, and the specified related persons and entities from using “Open AI,” “open.ai,” or similar marks in connection with artificial-intelligence products or services, websites, applications, or social-media accounts. The order also barred representations that goods or services using the marks were sponsored, approved, authorized by, or originated from OpenAI.

The order required defendants to file a sworn compliance report within 30 days after service of the order with notice of entry. It also vacated the trial date and related deadlines and required the parties to submit a proposed form of judgment. The opinion notes that the judgment should address OpenAI’s requests for nominal damages, interest, attorneys’ fees, and costs, but the quoted order does not itself state the amount of any such award.