Behind OpenAI trademark infringement lawsuit: 5 legal pitfalls for AI enterprise naming and trademark compliance

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OpenAI is trending again, not because of the release of a new model, but because of a trademark infringement lawsuit. According to reports, a rights holder of the "OpenAI" related trademark has sued OpenAI, claiming that the use of its corporate name constitutes trademark infringement. As soon as the news came out, both the technology and venture capital circles exploded - an AI giant with a valuation of billions of dollars actually stumbled on the "name"?

This case is still in the litigation stage, and the specific details need to be clarified by the court. But from a lawyer's perspective, the legal issues involved in this dispute are not new. On the contrary, they are precisely the hidden dangers that many technology companies have planted from the first day of establishment: the legal relationship between company name, product name, and trademark exclusive rights has not been clarified. When they become bigger and stronger, trouble will come. Article 57 of the Trademark Law, Article 6 of the Anti Unfair Competition Law, and relevant provisions of the Regulations on the Administration of Enterprise Name Registration constitute the core legal framework for such disputes. Today, we will use this case to break down the five legal pitfalls of AI enterprise naming and trademark compliance one by one.

1、 How many founders have been deceived by the misconception that company name ≠ trademark exclusive rights

Many entrepreneurs have a deep-rooted misconception that registering a company name with the Market Supervision Bureau is equivalent to owning the trademark rights of that name. absolutely wrong.

The registration authority for company names is the market supervision and management department, based on the "Regulations on the Administration of Enterprise Name Registration", and the scope of protection is limited to the regions and specific industries under the jurisdiction of the registration authority. The registration authority of the trademark is the China National Intellectual Property Administration, which is based on the Trademark Law. Once the registration is approved, the trademark will enjoy the exclusive right to use the goods or service categories approved for use nationwide. The two are completely different legal systems and cannot replace each other.

In other words, registering a company called "Zhiyan Technology" in Shenzhen does not mean that you can exclusively use the trademark "Zhiyan" in Class 9 (computer software) and Class 42 (technical services). If someone else registers the "Zhiyan" trademark in these categories before you, you may even be infringing on the prominent use of your own company name.

The dilemma faced by OpenAI is the same: if the plaintiff does indeed hold a registered "OpenAI" or similar trademark in the AI related service category, then even if OpenAI has a prominent reputation in the global AI field, it cannot naturally resist prior trademark rights. The protection of trademark law is "registration first", not "fame first" - unless you can prove that it constitutes a well-known trademark and claim cross class protection, but the cost of proof is extremely high.

2、 Trademark infringement determination: how does Article 57 apply

Article 57 of the Trademark Law lists seven acts that infringe upon the exclusive right to use a registered trademark. In practice, the most relevant to AI enterprise naming disputes are the first and second items: using the same trademark on the same goods without permission, or using similar trademarks on the same or similar goods that can easily cause confusion, all constitute infringement.

The core criterion for judgment is' likelihood of confusion '. The court usually considers factors such as the degree of similarity of the trademark, the degree of similarity of the goods, the distinctiveness and popularity of the trademark involved, the subjective intention of the accused infringer, and actual evidence of confusion.

In the OpenAI case, if the approved use category of the plaintiff's trademark is similar to the services provided by OpenAI, and the "OpenAI" logo itself has strong distinctiveness, then the possibility of infringement determination will significantly increase. On the contrary, if the plaintiff's trademark has extremely low visibility and the registered category is far from AI services, OpenAI's defense space will be much larger.

It should be noted that there is a natural ambiguity in the classification of goods and services in the AI industry. A large model product may involve "computer software" in Class 9, "technology development services" in Class 42, "advertising and marketing" in Class 35, and even "online education" in Class 41. As long as the trademark owner has established a position in one of the categories, it may effectively target AI companies.

3、 Why can't AI companies save on trademark search before naming

We have served many technology startup teams and found a common phenomenon: founders spend months polishing products and weeks designing logos, but only spend a few minutes searching for trademarks on the official website of the Trademark Office, or even not searching at all. This is extremely dangerous.

A standardized trademark search should include at least three levels: first, text search, which queries the registration status of identical or similar text trademarks in the trademark office database; Secondly, category search, conducting a thorough investigation based on the current and potential product and service categories that the enterprise may be involved in in the next three years; Thirdly, graphic retrieval. If the logo contains graphic elements, graphic element encoding retrieval is also required.

After searching, what needs to be done is trademark layout. For AI companies, we typically recommend covering at least the core categories (9th, 42nd) and defense categories (35th, 38th, 41st). If the budget allows, consideration should also be given to registering joint trademarks and defensive trademarks to prevent others from "hitchhiking" in related categories.

What should I do if the search finds that my desired name has already been registered? Three ways: First, change the name, with the lowest cost but zero brand accumulation; The second is to negotiate the transfer or obtain authorization, with controllable costs but uncertain negotiation cycles; The third is to evaluate the feasibility of invalidation or revocation, which has a clear legal path but high time cost. The most taboo thing is to "use it first", and when the accused of infringement grows, they may face a double blow of stopping use and compensating for losses.

4、 What are the usual defense paths for defendants who are accused of trademark infringement

Assuming the worst-case scenario occurs where an AI company is sued for trademark infringement, would it be helpless? and be not so. In judicial practice, the commonly used defense paths for defendants include the following.

Firstly, it does not constitute a similar or dissimilar defense. Claiming significant differences in sound, form, and meaning between the accused logo and the registered trademark, or that the categories of goods and services between the two parties do not constitute similarity, will not cause confusion among the relevant public.

Secondly, use defenses first. Article 59 (3) of the Trademark Law stipulates that if someone else has already used the same or similar trademark on the same or similar goods before the trademark registrant before the trademark registrant applies for registration, the exclusive right holder of the registered trademark has no right to prohibit the user from continuing to use it within the original scope of use. But this defense has strict conditions: it must be "prior use" and "have a certain impact", and can only be "continued to be used within the original scope of use".

Thirdly, the defense of legitimate sources. If the accused infringer can prove that their use was legally authorized or justified, they can be exempted from liability for compensation.

Fourth, the three countermeasures of trademark invalidity or revocation. If the plaintiff's trademark itself has been improperly registered (such as lacking distinctiveness or obtaining registration through deception), it can be declared invalid; If the plaintiff's trademark has not been actually used for three consecutive years, an application for revocation can be filed. These two paths often fundamentally undermine the plaintiff's rights foundation.

The specific defense strategy in the OpenAI case depends on the plaintiff's claims and evidence, but the above paths are likely to be tested one by one during the trial.

5、 Exploring the Trademark Compliance System Construction of AI Enterprises from the OpenAI Case

The warning from this lawsuit to all AI companies is that trademark compliance is not a post remedy for the legal department, but should be embedded throughout the entire lifecycle of the enterprise from establishment to financing to listing.

In the initial stage, the core work is trademark search and registration layout, ensuring that brand names and core product names are registered in key categories. In the growth stage, it is necessary to establish a trademark monitoring mechanism, regularly check whether there are similar trademark applications or uses in the market, and promptly raise objections or take action to protect rights. During the financing and listing stages, investors and regulatory agencies will focus on reviewing the integrity and stability of trademark rights, and any ownership defects or pending litigation may become substantial obstacles to the transaction.

In addition, AI companies need to pay special attention to the trademark risks of open source community names, model names, and API interface names. Many teams casually choose names when publishing projects on GitHub, which later become core product names, only to find that they have already been registered by others - such cases are not uncommon in the AI community.

**Lawyer's suggestion: Whether it is a startup team or a mature enterprise, it is necessary to complete professional trademark search and risk assessment before brand naming, submit registration applications in core categories as early as possible, and establish a normalized trademark monitoring and rights protection mechanism. If you are already facing a trademark infringement dispute, you should immediately entrust a professional intellectual property lawyer to intervene, evaluate the defense path and the possibility of settlement, and avoid expanding losses due to improper response. The intellectual property team of Guangdong Zhiming Law Firm has rich practical experience in trademark infringement litigation, trademark administrative confirmation, and enterprise intellectual property compliance system construction, and can provide full chain legal services from naming and retrieval to dispute resolution for AI enterprises.