In a new filing, iyO alleges that former Apple designer and now io co-founder Tang Tan had access to its confidential designs, expanding the initial scope of the lawsuit against OpenAI. Here are the details.
A little background
Almost a year ago, OpenAI acquired io, an artificial intelligence company founded by Jony Ive.
Almost immediately after the announcement, a hearing device startup called iyO filed a trademark lawsuit, leading OpenAI to scrub all materials related to the advertisement.
In the lawsuit, iyO alleged that OpenAI was intentionally inappropriately using a name similar to its own, which would cause confusion and dilute the value of its brand as they would operate in the same general market.
iyO claimed to be working on AI-powered headsets 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, presented several documents that tell a different story. According to them, iyO CEO Jason Rugolo continued to offer details about his company and its technology, and offered to sell the company for $200 million after OpenAI rejected an unsolicited offer to invest in iyO.
OpenAI also said that the first io product it wouldn’t be an AI-powered wearable device.
Since then, the case has seen the usual round tripwith procedural hearings, briefs and appeals involving the prosecution and defense. More recently, OpenAI confirmed that it does. I have no intention of using the io brand. at all, which some hoped would end the lawsuit.
It wasn’t like that.
iyO expands the scope of the lawsuit
In a document filed on March 13 and made public today, iyO now alleges that its trade secrets were misappropriated, significantly escalating the case.
According to the new claims, a former iyO engineer named Dan Sargent downloaded confidential files and gave them to io co-founder Tang Tan, who is now also accused.
Tan, the filing states, had access to CAD files, physical prototypes and internal design details, which, iyO estimates in the filing, “(accelerated) io Products’ product development by nearly a decade.”
From the presentation:
All claims raised here arise and are based on: (i) the intentional actions of Defendants
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) the misappropriation of IYO trade secrets (including confidential CAD files and proprietary design information) by defendant Tang Yew Tan and defendant OpenAI OpCo, LLC, with the assistance of Dan Sargent, a former IYO engineer, to accelerate io Products’ product development by nearly a decade.
The amended complaint also provides a detailed description of how the alleged leak occurred. It claims that Sargent accessed internal folders, downloaded dozens of files, and renamed them with “gibberish strings like ‘ergetght.x_t,’ ‘wrbb5r.x_t,’ ‘grege.x_t,’ and ‘grgrgege.x_t'” before exporting CAD data to 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.
It remains to be seen whether the court will allow the amended claims to proceed and how OpenAI will respond. New documents related to this amendment are likely to be made public sooner rather than later.
In the meantime, if you would like to read the new presentation in its entirety, follow this link.
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