OpenAI Faces Lawsuit Over ‘io’ AI Device Branding

OpenAI Faces Lawsuit Over ‘io’ AI Device Branding \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ AI startup iyO has sued OpenAI, Sam Altman, and Jony Ive, claiming trademark infringement over a shared product name and alleged stolen ideas. The legal battle centers on a next-gen AI interface that breaks from screen-based interactions. A second lawsuit accuses a former iyO executive of leaking confidential info to Ive’s team.

Quick Looks

• iyO sues OpenAI, Sam Altman, and Jony Ive for trademark infringement
• Dispute involves stealth AI hardware project called “io”
• iyO alleges theft of trade secrets and breach of NDA agreements
• Federal judge allows case to proceed, bars use of “io” name temporarily
• iyO files second lawsuit against former employee for leaking design
• Altman dismisses claims as “silly” and accuses iyO of pushing vaporware
• Product at center is not a wearable or in-ear device
• Altman and Ive’s “io” project still largely under wraps
• Lawsuits expose early conversations and overlapping product pitches
• Battle highlights growing race to define AI’s next user interface

Deep Look

A high-stakes battle for the future of human-AI interaction is unfolding in courtrooms, as OpenAI and legendary designer Jony Ive face dual lawsuits from AI startup iyO Inc., claiming idea theft, trademark infringement, and corporate espionage. At the center of it all: a shared vision for replacing screens and voice boxes with a seamless new interface for artificial intelligence—one potentially worth billions.

The courtroom drama began when iyO CEO Jason Rugolo sued OpenAI and its CEO Sam Altman, along with Apple design veteran Jony Ive, for using a brand name too close to his own: “io” versus “iyO”. The conflict intensified when a U.S. District Court ruled the trademark case strong enough to move forward. A federal judge even ordered Altman and Ive to temporarily cease using the “io” brand, resulting in the project’s website being scrubbed.

But that was only Act One.

Second Lawsuit Adds Accusations of Trade Secret Theft

In a fresh twist, iyO has now filed a second lawsuit in San Francisco Superior Court, this time accusing former executive Dan Sargent of leaking proprietary product information to Tang Yew Tan, a close ally of Ive and co-designer of the Apple Watch.

Sargent, now employed at Apple, allegedly shared a confidential product sketch and details of iyO’s unreleased “audio computer” product. That device, publicly discussed by Rugolo in a TED Talk, was conceived as a screen-free, earbud-like AI assistant aimed at revolutionizing how users interact with machines.

Tan, in a sworn court filing, tried to distance the “io” project from iyO’s ideas, stating that their AI device is “not an in-ear device, nor a wearable device.” But iyO argues that the overlap in naming, timing, and the firms’ shared history of meetings suggests otherwise.

Altman’s Response: “Vaporware” and Coincidence

Sam Altman dismissed the lawsuit in a social media post as “silly, disappointing, and wrong,” accusing iyO of building a non-functioning product and branding it with a term (io) that’s been widely used, including by Google’s I/O conference.

Altman stated that he and Ive chose the “io” name as a nod to input/output, acquiring the domain name io.com in August 2023. According to his legal filing, they started the project “two years ago” and it is aimed at “creating new ways to input requests and receive helpful outputs, powered by AI.”

But internal emails tell a different story. When Rugolo emailed Altman in March 2023 seeking investment, Altman replied:

“Thanks but I’m working on something competitive so will (respectfully) pass! It’s called io.”

That exchange, iyO claims, shows clear awareness and acknowledgment of their competing visions.

Early Meetings and a Pattern of Overlap

Rugolo first pitched his concept to Altman in 2022 via Apollo Projects, a venture fund co-founded by Altman and his brothers. He says the idea was also presented to LoveFrom, Ive’s San Francisco design firm. In both cases, Rugolo claims his ideas were politely declined, only to reemerge later with eerily similar branding.

“I feel kind of stupid now,” Rugolo said. “We met many times. I demo’d everything. I trusted them.”

According to Rugolo, those early meetings included seven different individuals across both firms.

Tan’s Testimony Sparks New Allegations

The second lawsuit against Sargent stems from Tan’s own court declaration, in which he revealed conversations with a frustrated iyO engineer seeking a job. The engineer—later confirmed to be Sargent—allegedly criticized iyO’s pace, preorder strategy, and overall scalability.

Tan interpreted this as proof that iyO was “vaporware”—a tech term for non-existent or non-functional products promoted prematurely. He said he declined any further contact as a result, but the admission triggered a legal response from iyO.

Rugolo insists the product is real and functional, despite slow rollout. He views Tan’s commentary as part of an orchestrated campaign to discredit and replicate his work.

The Race to Reinvent AI Interfaces

Underlying this messy legal brawl is a deeper, more consequential trend: the push to define how humans will interact with AI moving forward. While companies like Humane have tried and failed to make AI hardware stick—Humane’s wearable “AI Pin” was shelved after poor reviews and an HP acquisition—OpenAI and LoveFrom believe they can succeed where others stumbled.

Altman has claimed that the io device prototype given to him by Ive is “the coolest piece of technology the world will have ever seen.” But details remain scarce. The court case, ironically, has forced more disclosures about what it isn’t than what it is.

The Stakes Ahead

With the U.S. District Court hearing set for fall, and a second lawsuit now in play, iyO is trying to not only defend its brand but also its vision for how AI will become integrated into our daily lives.

“This isn’t about a name,” said Rugolo. “It’s about trust, power, and fairness in how innovation happens.”

Until then, the future of “io”—and of AI’s next hardware revolution—remains uncertain, entangled in lawsuits, secrecy, and high-stakes ambition.

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