OpenAI Exposed: iyO vs io
The world wasn’t ready for what netizens have called the “most dramatic tech lawsuit of the year”. Voice computing startup iyO has filed a lawsuit against OpenAI, io, Sam Altman, and Jony Ive, alleging trademark infringement, unfair competition, and misappropriation of confidential information. OpenAI’s io announcement page has been taken down and now shows a message that reads, “This page is temporarily down due to a court order following a trademark complaint from iyO about our use of the name ‘io’. We don’t agree with the complaint and are reviewing our options.” The complaint, filed on June 9 in the Northern District of California, centres on the launch of OpenAI’s new hardware venture, io, which iyO claims is “confusingly similar” to its brand and product. Tang Yew Tan, the former Apple executive working on OpenAI’s experimental hardware project, io, has submitted a court declaration refuting allegations made by voice computing startup iyO. According to new court documents, OpenAI stated that the io announcement on May 21 was made via a blog post and video, but did not promote any specific product. “Its design is not yet finalised, but it is not an in-ear device, nor a wearable device. io has not sold any products, offered any products for sale or distribution, distributed any products, or advertised any goods or services. It has no plans to do so for at least a year.” On May 21, OpenAI announced its $6.5 billion acquisition of a new venture co-founded by Ive, named io. The announcement described plans to build a new class of personal computing devices focused on voice and AI. According to the iyO, this caused immediate market confusion due to the phonetic similarity between ‘io’ and ‘iyO,’ particularly as both companies are developing similar products. Altman’s Take OpenAI CEO Sam Altman, in a court filing, claimed he had no prior knowledge of iyO or any AI-related work by its founder Jason Rugolo when the name ‘io’ was chosen in 2023. “I was not aware that Jason Rugolo was doing anything related to AI, nor do I remember ever having seen the company name ‘iyO’,” Altman stated, adding that he was only made aware of its existence in 2025. “At no point in time did I ever intend to trade on the ‘iyO’ name.” According to Altman, Rugolo reached out unexpectedly in March, seeking $10 million in funding. Altman said he took the call as a courtesy, owing to Rugolo’s persistence, and forwarded the meeting request to the internal and external io teams to assess any potential collaboration. He clarified that he never promised an acquisition nor threatened a lawsuit. He suggested Rugolo might have “misunderstood” a mention of OpenAI’s ownership of the io.com domain. Origins of iyO and Its Product According to the court filings, iyO was formed in 2021 as a spinout from Google X (Google’s Moonshot Project) after an investment of $25 million in research and development. Since then, the company has raised an additional $37 million and developed the iyO ONE, an ear-worn, screen-free audio computer. The product is built for voice-first interaction and bone conduction audio delivery, operating entirely without a traditional screen. iyO ONE features 16 microphones to support natural language interaction. In a TED Talk last year, Rugolo introduced an ‘audio computer’—a new device that moves users away from screen-based, attention-heavy interactions and towards natural, voice-driven computing. “The truth is that we could all benefit from a little less screen time,” Rugolo said. “We need an entirely new kind of computer. One that speaks our language instead of forcing us to speak theirs.” Prior Engagement Between the Parties The lawsuit alleges that OpenAI and Ive’s design firm LoveFrom had engaged with iyO as early as 2022. These interactions began with investment interest from Apollo Projects, a fund led by Altman. IyO claims that Altman and his team reviewed detailed information about the IYO ONE and declined to invest but continued to follow the company’s progress. Tan confirmed that on April 16, Peter Welinder, VP of products at OpenAI, introduced him to Rugolo via email. Rugolo wanted to demonstrate some of iyO’s audio technology. On May 1, Rugolo and an iyO engineer met with Tan and other io employees to demonstrate the iyO ONE. The demo included voice search, music playback, and live translation. However, Tan said it was largely unsuccessful, with translation features failing repeatedly. According to Tan, Rugolo appeared to be fundraising and even offered to sell the entire company. “When I did not express interest, Rugolo pivoted, telling me that he would sell the entire iyO company for $200 million, which I understood to be roughly the amount iyO had raised to date.” Tan revealed declining again and becoming concerned about exposure to unsolicited IP. “Rugolo seemed desperate for cash…It has long been my practice since my time at Apple to avoid being ‘contaminated’ by another company’s intellectual property.” Tan said that in May 2024,  he placed a preorder for iyO’s ONE earbuds with WiFi and LTE connectivity via the company’s website. The total listed price was $1,199, with a $69 down payment. At the time, iyO promised a shipping window of Winter 2024. However, on January 13 the following year, he received an email from iyO stating that the WiFi version would be delayed until August, and that the LTE version was delayed further. As of the date of the declaration, the product was still not delivered. On the other hand, iyO said that in Spring 2025, it had more meetings with OpenAI and LoveFrom to discuss a possible investment. During those meetings, iyO shared its vision, technology, and some still-in-development ideas. Seven people from OpenAI and LoveFrom also tried out demo versions of the iyO ONE device. Even if OpenAI and Ive didn’t copy iyO on purpose, the similarities are hard to ignore. In today’s tech world, the line between inspiration and imitation gets thinner every day, and who gets credit often depends on who has more power, not better ideas.
iyO claims that Altman and his team reviewed detailed information about the IYO ONE and declined to invest but continued to follow the company’s progress.
The world wasn’t ready for what netizens have called the “most dramatic tech lawsuit of the year”. Voice computing startup iyO has filed a lawsuit against OpenAI, io, Sam Altman, and Jony Ive, alleging trademark infringement, unfair competition, and misappropriation of confidential information.
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Siddharth is a media graduate who loves to explore tech through journalism and putting forward ideas worth pondering about in the era of artificial intelligence.