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These days, when people hear the name OpenAI, they immediately think of ChatGPT and artificial intelligence. This makes a recent decision by the Court of Justice of the European Union all the more surprising: The term “OPENAI” cannot be registered as a word mark in the European Union. To many, this sounds absurd. How can a company that’s known worldwide not be able to protect its own name?

The answer shows that brand recognition alone is not enough. The key factor is whether a name is even suitable as a trademark.

A well-known name is not automatically a registered trademark

OpenAI sought to register the term “OPENAI” as a European word mark for various products and services related to software, artificial intelligence, and digital technologies. However, the relevant European Union office had previously rejected the application. The company then filed a lawsuit challenging the decision.

The court has now upheld this decision.

The central idea is relatively simple: A trademark is meant to distinguish one company from another. If, on the other hand, a term primarily describes what something is about, it generally cannot be monopolized.

In the court’s view, many people in the IT sector understand “Open AI” as a combination of the English terms “open” and “AI.” This could give the impression that it is merely a description of open or freely accessible artificial intelligence and not necessarily the name of a specific company.

Why the court ruled that way

The ruling by no means means that OpenAI will lose its company name or be prohibited from using it in the future.

This concerns exclusively trademark protection as a European word mark.

The court concluded that the term lacked sufficient distinctiveness for the goods and services covered by the application. At the same time, it could have a descriptive meaning from the perspective of the relevant consumers. Under European trademark law, terms of this nature are, in principle, to be available to all market participants.

In other words: No one should be able to claim general terms that competitors might also need to describe their products or services.

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OpenAI, of course, retains ownership of its company name and may continue to operate under that name. Other intellectual property rights—such as logos or national trademarks—may also remain in effect or be registered. Furthermore, thanks to its enormous name recognition, the company already enjoys a significant economic advantage in many situations.

Nevertheless, the ruling shows that even globally renowned technology companies do not automatically receive every type of trademark protection they seek.

Young startups, in particular, should learn from this: When choosing a company name, you should check as early as possible whether it is sufficiently distinctive. The more descriptive a name seems, the more difficult it often becomes to secure comprehensive trademark protection later on.

What are the implications for other companies?

The decision is likely to have implications far beyond OpenAI.

In recent years, countless companies have been founded with terms such as “AI,” “Smart,” “Digital,” “Cloud,” or “Open” in their company names. Many founders assume that a modern name is automatically eligible for protection. However, this ruling does not support that assumption.

Anyone who chooses a name that merely describes a technology or a characteristic must expect that comprehensive trademark protection will fail. That is why it is often worthwhile to develop creative, imaginative terms or unusual word combinations. These are generally much easier to protect and can also be better defended against imitators later on.

The ruling thus reaffirms a fundamental principle of European trademark law: Trademarks are intended to uniquely identify companies—not to reserve general terms for all competitors.

If even OpenAI fails, every entrepreneur should take a closer look

This decision is a clear wake-up call for companies of all sizes. Those who don't start thinking about branding until their business is already successful often find it's too late.

A professional trademark search costs significantly less than a subsequent name change or a years-long legal battle. Especially in the field of artificial intelligence, new products and companies are emerging every day. This makes it all the more important to choose a name from the very beginning that not only sounds modern but can also be protected in the long term.

This ruling is likely to bring some entrepreneurs back down to earth. Many still believe that a cool English term containing “AI” automatically makes for a strong brand. The opposite may be true. Those who focus solely on trends risk ending up with a name that anyone can use. Perhaps this ruling will even encourage companies to be bolder again and develop genuine brands, rather than simply stringing together the latest buzzwords. After all, innovation requires more than just a trendy acronym—sometimes it starts with the name itself.