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What Readers Need to Know

• TradeSun says it used ASTRA for AI software years before OpenAI launched GPT-6 Astra and holds a federal registration dating to 2022.
• The lawsuit relies on “reverse confusion” — the claim that OpenAI is so large its branding could make consumers think the original ASTRA belongs to OpenAI.
• The dispute could become unusually difficult for OpenAI because the companies allegedly target overlapping enterprise, financial and compliance customers.

SAN FRANCISCO - OpenAI’s size is normally one of its biggest business advantages. In a trademark lawsuit filed Monday, however, that size could become part of the problem.

California software company TradeSun Inc. sued OpenAI OpCo LLC in San Francisco federal court on October 5, accusing the ChatGPT maker of infringing its federally registered ASTRA trademark through the launch of GPT-6 Astra.

The case is TradeSun Inc. v. OpenAI OpCo LLC, No. 3:26-cv-11360, in the U.S. District Court for the Northern District of California. No court has ruled that OpenAI infringed TradeSun’s trademark, and OpenAI says the case is meritless.

TradeSun’s timing matters.

USPTO records show TradeSun applied to register ASTRA on May 28, 2021, claiming commercial use beginning May 21 of that year. The mark was registered on May 31, 2022, as Registration No. 6,746,198 for artificial-intelligence software-as-a-service involving document classification, data extraction and data processing.

OpenAI launched GPT-6 Astra years later.

TradeSun argues that the dispute is therefore not the familiar trademark scenario where a smaller newcomer allegedly tries to benefit from a famous company’s name. It claims the opposite happened.

That legal theory is called reverse confusion.

In ordinary trademark infringement, consumers might mistakenly believe a newer company is connected to an established brand. Reverse confusion asks whether a powerful newcomer can flood the market so thoroughly that customers begin assuming the older company belongs to, is sponsored by, or is copying the newcomer.

The Ninth Circuit expressly recognizes that theory. Its own jury instructions explain that reverse confusion occurs when customers dealing with the original trademark holder mistakenly believe they are doing business with the junior user.

That distinction could be critical here.

TradeSun alleges OpenAI’s marketing is effectively teaching the public that “Astra means OpenAI.” It says customers encountering TradeSun’s ASTRA software could now assume the smaller company built its product around OpenAI technology—or worse, copied OpenAI’s branding.

The overlap between the products may matter as much as the identical name. TradeSun says both companies offer AI technology used by enterprises and financial institutions for reviewing documents, extracting and reconciling information, assessing risk, compliance work and automating multi-step processes.

Under the Ninth Circuit’s Sleekcraft trademark test, courts examine factors including similarity of the marks, how closely related the products are, the strength of the marks, marketing channels, purchaser sophistication, evidence of actual confusion and the defendant’s intent. In reverse-confusion cases, the similarity of the names, relatedness of the products and market strength can carry substantial weight.

There is another wrinkle.

TradeSun’s ASTRA registration was challenged earlier this year by BizUpUSA Holdings LLC, which filed a petition with the Trademark Trial and Appeal Board on April 7 seeking cancellation. But BizUpUSA withdrew the petition in July, and the proceeding was terminated. TradeSun therefore entered this fight with OpenAI still holding its federal registration.

TradeSun is seeking an order requiring OpenAI to stop using the Astra name, infringement findings, damages and profits allegedly attributable to the challenged branding.

OpenAI has rejected the allegations.

“This complaint lacks any merit whatsoever,” an OpenAI spokesperson told Bloomberg Law, adding that the company remains focused on building technology responsibly.

OpenAI still has substantial defenses available. It can attack the strength and scope of TradeSun’s mark, dispute whether sophisticated enterprise customers would actually be confused, challenge how closely the competing products overlap and point to a lack of real-world confusion.

But one argument may be harder to make than usual — that OpenAI is simply too well known for anyone to confuse the two.

In a reverse-confusion case, being overwhelmingly famous can be exactly what creates the alleged confusion.

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