In a new filing, iyO alleges that former Apple designer and now io co-founder Tang Tan was given access to its confidential designs, broadening the initial scope of the lawsuit against OpenAI. Here are the details.
A bit of background
Almost a year ago, OpenAI acquired io, an AI company founded by Jony Ive.
Almost immediately after the announcement, a hearing device startup called iyO filed a trademark lawsuit, which led OpenAI to scrub all materials related to the announcement.
In the lawsuit, iyO alleged that OpenAI was improperly and purposely using a name similar to its own, which would cause confusion and dilute the value of its brand, since they would operate in the same overall market.
iyO claimed to be working on AI-powered earpieces and that its executives had met with OpenAI representatives on several occasions, during which they showcased their product and technology.
OpenAI and io, on the other hand, filed several documents telling a different story. According to them, iyO CEO Jason Rugolo kept volunteering details about his company and its technology, and offered to sell the company for $200 million after OpenAI rejected an unsolicited bid to invest in iyO.
OpenAI also said that the first io product wouldn’t be an AI-powered wearable.
Since then, the case has seen the usual back-and-forth, with procedural hearings, filings, and appeals involving the prosecution and the defense. More recently, OpenAI confirmed that it does not intend to use the io brand name at all, which some had expected to put an end to the lawsuit.
It didn’t.
iyO expands lawsuit scope
Nn a document filed on March 13 and made public earlier today, iyO now alleges that its trade secrets were misappropriated, significantly escalating the case.
According to the new claims, a former iyO engineer called Dan Sargent downloaded confidential files, and handed them to io co-founder Tang Tan, who’s now also named as a defendant.
Tan, the filing claims, was given access to CAD files, physical prototypes, and internal design details, which, iyO estimate in the filing, “[accelerated] io Products’ product development by nearly a decade.”
From the filing:
All claims asserted herein arise out of, and are based on: (i) Defendants’ willful
infringement of IYO’s registered and common law rights in its IYO (pronounced “EYE-OH”) trademark (the “IYO Mark”) or contributing to or inducing such infringement; and (ii) Defendant Tang Yew Tan’s and Defendant OpenAI OpCo, LLC’s misappropriation of IYO’s trade secrets (including confidential CAD files and proprietary design information), with the help of Dan Sargent, a former IYO engineer, to accelerate io Products’ product development by nearly a decade.
The amended complaint also provides a detailed account of how the alleged leak occurred. It claims Sargent accessed internal folders, downloaded dozens of files, and renamed them with “gibberish character strings such as ‘ergetght.x_t,’ ‘wrbb5r.x_t,’ ‘grege.x_t,’ and ‘grgrgege.x_t'” before exporting CAD data into cross-platform formats.
iyO says this activity took place just days before a June 2024 dinner in San Francisco, where Tan allegedly reviewed internal materials and physical product samples alongside an engineer from LoveFrom, Jony Ive’s design studio.
Whether the court will allow the amended claims to proceed and how OpenAI will respond remains to be seen. New documents related to this amendment will likely become public sooner rather than later.
In the meantime, if you’d like to read the new filing in full, follow this link.
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