OpenAI has been compelled to remove marketing materials about its $6.4bn partnership with former Apple design chief Sir Jony Ive after a US federal judge granted a restraining order following a trademark complaint from rival start-up iyO.
The artificial intelligence company removed a blog post and promotional video about its acquisition of Ive’s hardware start-up io over the weekend, following legal action by iyO, which produces AI-powered earbuds under a similar name.
iyO founder and former Google executive Jason Rugolo accused OpenAI and Ive of attempting to “bury” his company after previously holding acquisition discussions. “This is a story of corporate aggression, of large companies trying to bury smaller companies,” Rugolo told the Financial Times. “If we didn’t win the restraining order, this announcement very well could have killed us.”
The dispute centres on the similarity between the two company names. iyO, which spun out of Google’s Moonshot lab in 2021, has developed AI earbuds called “iyO ONE” that feature conversational voice assistants. The company claims OpenAI’s use of the “io” name constitutes trademark infringement.
According to court documents, OpenAI’s vice-president of product Peter Welinder met with iyO representatives twice after Rugolo contacted OpenAI chief executive Sam Altman in March seeking $10mn in funding. The meetings also involved Evans Hankey, a former Apple design chief who joined Ive’s company, and Tang Yew Tan, another former Apple executive.
“The context of those meetings was an acquisition,” Rugolo explained. “They were talking about buying our company. They got everything, right down to how the software stack works. I foolishly trusted them, because I thought we were collaborating and serious about working together.”
However, OpenAI disputed these characterisations. “This is a baseless trademark dispute and not a case about stolen ideas or technology,” the company stated. “iyO demoed a product in May 2025 that didn’t function properly or meet our standards in hopes that we’d acquire iyO. We passed.”
In court filings, Tan claimed that Rugolo “seemed desperate for cash” and that the demonstration of iyO ONE had failed. Tan also alleged that Rugolo offered to sell his company for $200mn whilst “raising the issue of the io name in bad faith to try to force a deal with his company.”
Rugolo called this statement “100 per cent false”, suggesting it may have arisen from a misunderstanding about his company’s funding round.
The defendants argue the lawsuit is premature since io is “at least a year away from offering any goods or services” and that io’s first product “is not an in-ear device like the one Plaintiff is offering.”
A preliminary injunction hearing is scheduled for October to determine whether the trademark ban will continue, with the full trial set for January 2028.
