A promising collaboration between OpenAI CEO Sam Altman and renowned iPhone designer Jony Ive to create a new AI hardware product has encountered a legal obstacle after a federal judge ordered a temporary halt to the marketing of the venture.

Last month, OpenAI announced the acquisition of io Products, a product and engineering firm co-founded by Ive, in a deal reportedly worth nearly $6.5 billion.

However, the project quickly ran into legal trouble when a startup named IYO, which is also working on AI hardware, filed a trademark infringement complaint. The startup claims its product was pitched to Altman’s personal investment firm and Ive's design company in 2022 and alleges that the new venture's name is confusingly similar to its own.

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U.S. District Judge Trina Thompson ruled on Friday that IYO has a sufficiently strong trademark infringement claim to move forward with legal proceedings, scheduling a hearing for October. Until then, Altman, Ive, and OpenAI are barred from “using the IYO mark, and any mark confusingly similar thereto, including the IO mark, in connection with the marketing or sale of related products.”

In response to the ruling, OpenAI removed all references to the new venture from its website, including the original May 21 announcement. The replaced webpage now displays a message stating the content is "temporarily down due to a court order" and adds, "We don’t agree with the complaint and are reviewing our options."

IYO CEO Jason Rugolo welcomed the court's decision, issuing a statement on Monday asserting that the company will firmly defend its brand and technology.

"IYO will not roll over and let Sam and Jony trample on our rights, no matter how rich and famous they are," Rugolo said.