From Trademark Disputes to Patent Prosecution Clarity: Insights from Cameo v. OpenAI and the USPTO’s Eligibility Guidance

Once again, generative AI is making legal headlines for the ever-growing alleged use of intellectual property (”IP”) by AI companies. Over the past year alone, we’ve begun to see a dichotomy in the use of IP, either at the input (training models), as in Bartz et al. v. Anthropic PBC, No. 3:24-cv-05417 (N.D. Cal. June 23, 2025) and Kadrey et al. v. Meta Platforms, Inc., No. 3:23-cv-03417-VC (N.D. Cal. June 25, 2025)(see SoCal IP post here), or at the output (the produced end product), as in Disney Enterprises Inc. v. Midjourney Inc., 2:25-cv-05275, (C.D. Cal. June 11, 2025). In terms of copyright, these assertions seem to have settled on fair use for the input, but we have yet to see the direction the output will take, as the legal landscape remains unsettled.

We now are starting to see a shift to trademark rights being asserted in the AI legal landscape as this past October, Baron App, Inc. d/b/a Cameo (”Cameo”) filed suit against OpenAI, Inc. (”OpenAI”) in the Northern District of California, alleging that OpenAI’s decision to brand a new text-to-video feature as “Cameo” infringes and dilutes Cameo’s well-known CAMEO mark in Baron App, Inc. d/b/a Cameo v. OpenAI, Inc., No. 3:25-cv-09268 (N.D. Cal. Oct. 28, 2025). The lawsuit claims that OpenAI’s feature, which generates AI-based likenesses of celebrities in short, personalized clips, directly encroaches on Cameo’s core business of authentic, celebrity-created videos and has already caused substantial marketplace confusion.

Sora is OpenAI’s text-to-video generative AI model that lets users create short video clips with written prompts. The text-to-video outputs have grown in popularity for their uncanny realism. See OpenAI’s introduction of Sora on YouTube.

Cameo asserts rights in four federal trademark registrations. The complaint describes OpenAI’s September 30, 2025, launch of the “cameo” feature and claims that many consumers assumed it was a partnership or a new AI-driven product from Cameo itself. Cameo characterizes OpenAI’s adoption of the identical mark as intentional and in bad faith, undertaken with full knowledge of Cameo’s longstanding rights.

In a significant early ruling found here, the district court granted Cameo’s request for a temporary restraining order (”TRO”) blocking OpenAI from using the term “cameo” in its Sora application. The district court found Cameo likely to succeed on its core trademark infringement claim, emphasizing that OpenAI’s AI-generated “cameo” videos are closely related to Cameo’s authentic celebrity video messages. The district court also rejected OpenAI’s argument that “cameo” was a merely descriptive term, concluding that the company was using it as a brand rather than a neutral descriptor. Because the identical mark was being used on highly similar services, the court held that consumers were likely to be confused about a connection or partnership between the companies.

Finding likely irreparable harm to Cameo’s goodwill and brand identity, and noting that the balance of equities and public interest favored preventing further confusion, the district court issued a TRO as the case proceeds toward a preliminary injunction hearing.

The court’s ruling may be an early indication of a possible heading for AI’s alleged use of IP in the output – time will only tell.

USPTO’s Eligibility Guidance

Director John A. Squires has recently released two memoranda that elevate the role of Rule 132 declarations in subject-matter eligibility practice. The guidance, released December 4, 2025, outlines how applicants can use subject matter eligibility declarations (”SMEDs”) to build an evidentiary record supporting patent eligibility in the public memo and how examiners must evaluate them in the examiner’s memo.

The examiner’s memo reminds examiners of the governing rules for evaluating declarations and provides concrete examples of how SMEDs may support an eligibility determination. The memo explains that when an applicant properly submits a SMED, the examiner must consider it as part of the § 101 analysis. The memo includes four hypothetical scenarios, each tied to an Alice step 2 inquiry, illustrating how factual evidence may demonstrate that claims recite an inventive concept.

The public memo provides guidance to applicants and practitioners on how to prepare SMEDs effectively and what pitfalls to avoid. A key component is separating issues. The memo advises applicants and practitioners that SMEDs should be filed as separate, standalone documents that address solely § 101 eligibility issues. The memo warns against combining SMEDs with testimony on obviousness, novelty, or other statutory requirements, as doing so can confuse the record and dilute the evidentiary value of the submission. The memo emphasizes that SMEDs must present objective, relevant evidence with a clear nexus to the claimed technological improvement, and that examiners must fully consider such evidence.

These memoranda build on Director Squires’ broader effort to recalibrate the Office’s approach to patent eligibility.