The ongoing legal dispute between OpenAI, Inc. and a little-known company with a similar name has taken a new turn. In the amended counterclaims that it filed with a federal court in California on October 11, Open Artificial Intelligence, Inc. and its founder Guy Ravine (collectively, “Open Artificial Intelligence” or the “defendants”) expand upon the reverse trademark confusion, deceptive conduct and corporate misrepresentation claims that they alleged in May. Open Artificial Intelligence’s updated counterclaims not only target the legality of ChatGPT-creator OpenAI’s use of the “Open AI” name, but they also focus on the corporate evolution of OpenAI, namely, its movement away from its nonprofit roots.
Building upon the initial counterclaims that it lodged with the U.S. District Court for the Northern District of California in May (some of which were dismissed without prejudice by the court last month), Open Artificial Intelligence’s amended counterclaims seeking to portray Sam Altman and Greg Brockman as “unlawfully deceptive.” The filing describes the OpenAI co-founders as “deploy[ing] the Open AI name and ethos as convenient, expendable tools” to build their company into a $90 billion behemoth. Moreover, the counterclaims challenge the sincerity of OpenAI’s mission to serve the public interest.
Open Artificial Intelligence asserts that the artificial intelligence (“AI”) titan’s transition to a for-profit structure has harmed not only Ravine’s business but also the broader AI community. And beyond that, the defendants contend that OpenAI’s “insincere use of the name ‘Open’ AI” has created distrust in the field, causing researchers and donors to question the company’s true intentions
Reverse Confusion
At the heart of Open Artificial Intelligence’s counterclaims is the doctrine of reverse confusion, the situation in which a more powerful entity uses another company’s trademark, thereby, overwhelming the smaller company’s pre-existing brand. Ravine claims that his company was the original creator of the “Open AI” concept, dating back to 2014 – well before OpenAI launched with the same name in 2015. According to Ravine, OpenAI attempted to register the “OpenAI” trademark, but its application was denied by the trademark office due to his prior use of the mark.
The amended counterclaims aim to strengthen Open Artificial Intelligence’s allegations, stating that OpenAI has misled the public into believing that they are the “true and rightful In reality, the defendants maintain that OpenAI’s actions have “overwhelmed Ravine and his Open AI venture … by virtue of its resources, funding, and media access” and “damaged” his older-but-smaller company in the process.
New Allegations of Corporate Misconduct
The amended counterclaims also add new and more detailed allegations about the transformation of OpenAI from a nonprofit dedicated to public good into a for-profit corporation. The defendants claim that OpenAI has “undergone a shocking transformation,” deviating from its initial promises of transparency, sharing, and AI safety. When OpenAI was first created, it was described as an organization with a “primary fiduciary duty to humanity.” promising to develop open-source AI technology for the benefit of society, Open Artificial Intelligence states. However, the amended filing alleges that Altman used the concept of being “open” only as a “recruiting strategy for the short and medium term,” exploiting this temporary openness to compete with tech giants like Google and to attract non-profit funding from donors like Elon Musk.
According to Open Artificial Intelligence, this strategic use of openness was deceptive from the start. The filing asserts that “when they said they would be open, nonprofit, and for humanity, they lied”, citing evidence that OpenAI swiftly shifted toward secrecy and profit. The amended filing further alleges that Altman and Brockman used the promise of openness in furtherance of their own goals and did not adhere to the principles of transparency they initially promoted.
False Representations
In addition to the claims regarding trademark infringement and corporate misconduct, the filing expands the focus on the alleged misrepresentations made by OpenAI. Open Artificial Intelligence asserts that Altman and Brockman “falsely announced that they had $1 billion in funding commitments,” which was a key factor in their ability to recruit top talent in the AI field. However, this figure was wildly exaggerated, per Open Artificial Intelligence, as OpenAI had raised only “$13 million in their first year of operation.”
The defendants argue that these false claims about funding allowed OpenAI to gain an unfair competitive advantage and attract top AI researchers from institutions like Google, depriving Open Artificial Intelligence of valuable talent. This conduct, which has allegedly been “willful and in bad faith” is emblematic of a broader pattern of behavior by OpenAI’s leadership, the defendants contend.
Industry Response, Mistrust & AI Ethics
Still yet, the amended filing introduces new details about the impact of OpenAI’s conduct on the AI research community. According to Open Artificial Intelligence, OpenAI’s actions have created mistrust within the industry, causing AI researchers to question the company’s integrity and its commitment to transparency. Specifically, the amended counterclaim highlights the sentiments of researchers who became disillusioned with OpenAI as it moved away from its original mission. For instance, the defendants point to a statement from a former OpenAI employee, who criticized the company’s leadership and vision: “Throughout our time at OpenAI, we witnessed a disturbing pattern of deceit and manipulation by Altman and Brockman, driven by their insatiable pursuit of achieving artificial general intelligence.”
Furthermore, the updated filing adds that the “insincere use” of the name “Open’ AI” by Altman and co. has undermined trust, not just with researchers but also with donors and collaborators who were initially drawn to the company’s promise of openness and transparency. This loss of trust has big implications for the AI field, the defendants’ filing states, where collaboration and ethical considerations are critical in guiding the development of groundbreaking technologies like artificial general intelligence.
Finally, the counterclaims filing goes on to frame the case as about more than just about trademark rights, and instead, more broadly about the ethics of corporate conduct in the AI industry. As OpenAI continues to dominate the field of AI, the defendants raise concerns about the concentration of power and the ethical responsibilities of companies that wield such influence. The filing warns of the dangers posed by companies like OpenAI, which now have the potential to develop artificial general intelligence – technology that could surpass human intelligence. According to the counterclaim, a former OpenAI researcher claimed that “whoever controls [AGI] will have ‘godlike powers’ over everyone else.”
Open Artificial Intelligence’s counterclaims come in response to the lawsuit that OpenAI filed in August 2023, as first reported by TFL, accusing the defendants of co-opting its brand and “fraudulently divert[ing] public interest in and demand for [its] products.” In the complaint that it lodged in a federal court in Northern California on August 4, OpenAI claims that Open Artificial Intelligence and Ravine “unlawfully adopted” the “Open Artificial Intelligence” name after it had already begun operating in the AI space and as a result, stands to confuse “millions of users of OpenAI’s products into mistakenly believing that [they] have any connection to, association with, or sponsorship by OpenAI when, in fact, there is none.”
The case is OPENAI, INC. v. Open Artificial Intelligence, Inc. et al., 3:23-cv-03918 (N.D. Cal.)
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