Yesterday, tech users discovered that OpenAI, the company behind ChatGPT, has removed all public-facing announcements of its much-hyped collaboration named IO with famed former Apple designer Sir Jony Ive. The sudden retraction came without immediate explanation, leaving the tech community speculating. Now, a trademark infringement lawsuit, filed on June 9, 2025, reveals that the move followed legal action from a startup named IYO, Inc., which claims OpenAI and its partners knowingly and willfully infringed on its trademark.
The complaint was filed in the United States District Court for the Northern District of California by IYO, Inc. against IO Products, Inc., OpenAI, Inc., OpenAI, LLC, OpenAI CEO Sam Altman, and Sir Jony Ive. IYO, Inc. alleges that the defendants’ new venture, “IO,” is a homophone of its own “IYO” trademark (pronounced “EYE-OH”) and that the new company’s purpose is to create a product that is “eerily similar to and competitive with” IYO’s own offerings.
A Tale of Two Companies
According to the court filing, IYO, a venture-funded startup that spun out of Google X in August 2021, has been developing technology for natural language computing that allows users to interact with devices without screens or keyboards. The culmination of this effort, which the complaint states has involved over seven years of work and more than $60 million in investment, is a product called the “IYO ONE”.
The IYO ONE is described as a revolutionary, ear-worn “audio computer” that uses specialized microphones and bone-conduction technology to enable users to control applications through natural language voice commands. The device can run its own apps, such as real-time translation and advanced noise cancellation, and even features a natural language agent named SHELL to manage the user experience. IYO states it is currently in the process of manufacturing an initial batch of 20,000 units and is in the midst of a crucial fundraising round.
The lawsuit alleges that OpenAI’s May 21, 2025, announcement of its $6.5 billion acquisition of “IO”— a company formed with Jony Ive to develop hardware for screenless interaction with AI and the internet—blatantly usurped IYO’s goodwill and caused significant disruption to its business.
A History of Interaction
The complaint lays out a timeline suggesting that OpenAI, Altman, and Ive were well aware of IYO and its technology long before the “IO” announcement. The document details a series of meetings and interactions between the parties dating back to at least 2022.
According to the filing, representatives from Sam Altman’s personal investment fund, Apollo Projects, and Jony Ive’s design firm, LoveFrom, met with IYO in 2022 to discuss potential investment and collaboration. While both ultimately declined to pursue a partnership at the time, the complaint alleges they “kept tabs on IYO’s technology”.
The interactions allegedly intensified in the spring of 2025. The lawsuit claims that IYO and OpenAI had further meetings regarding a potential capital raise, during which IYO shared its vision and technology, and even fitted seven of the defendants’ representatives with demo IYO ONE devices. The filing further alleges that the defendants expressed that the IYO ONE had promise and asked IYO to share its intellectual property.
The complaint also points to more direct actions, alleging that Tang Yew Tan, a co-founder of IO, and another engineer from either LoveFrom or IO, pre-ordered the IYO ONE. It is also claimed that an IO product design engineer purchased IYO’s initial product, the VAD PRO, under a different company name, and then proceeded to ask detailed questions about the device’s specifications and even requested design files.
In what could be a crucial piece of evidence, the complaint cites a March 4, 2025, email exchange where Sam Altman, in response to a meeting request from IYO, allegedly stated, “thanks but im working on something competitive so will respectfully pass! (called io…).”. Altman then reportedly added that “jony ive” is “the one driving this”.
The Allegations and Demands
IYO, Inc. is suing on multiple counts, including trademark infringement, false designation of origin, and unfair competition under both federal and California state law. The company claims that the defendants’ actions have caused and will continue to cause irreparable harm, including creating confusion in the marketplace, disrupting its marketing and manufacturing plans, and jeopardizing its ability to raise capital.
The lawsuit states that since OpenAI’s announcement, IYO has been unable to secure additional funding due to investor concerns about the infringement. It argues that the “sheer scale of OpenAI and its investment in IO threaten to swamp IYO’s reputation in the market and its very existence”.
IYO is seeking equitable relief and damages. This includes a court order to preliminarily and permanently stop the defendants from using the “IO” name, an accounting of all of the defendants’ profits from their actions, compensatory and punitive damages, and coverage of all legal fees. The company has also demanded a jury trial.
The complaint details that IYO attempted to resolve the issue directly, with its founder and legal counsel reaching out to the defendants to cease using the “IO” name. According to the filing, Sam Altman not only refused but allegedly threatened to sue IYO to force it to stop using its own name.
This legal battle highlights the high-stakes world of AI development and the critical importance of intellectual property as major players venture into new hardware frontiers. For now, the future of the “IO” project remains uncertain as the courts prepare to weigh in on who has the right to the name at the heart of this dispute.