The ongoing legal showdown over naming and technology theft allegations between the AI startup iyO and OpenAI just intensified. iyO claims that Tang Tan, a former Apple designer and now co-founder of OpenAI’s recently acquired io, illicitly obtained its confidential design files, widening the battle into trade secret theft. This dramatic expansion marks a fresh chapter months after the trademark clash first erupted.
The fight began nearly a year ago when OpenAI snapped up io, a company co-founded by former Apple design chief Jony Ive. Almost simultaneously, iyO, which develops AI-enhanced hearing earpieces, sued OpenAI over the ”io” name-arguing it was too close to its own and would confuse customers. According to iyO, the two companies even met before the acquisition, where iyO shared sensitive tech details with OpenAI representatives.
OpenAI countered with their own narrative: iyO’s CEO repeatedly offered confidential info and even tried to sell his company to OpenAI for $200 million after failing to get investment. They also denied that io’s products would be AI wearables, muddying the waters further. Despite OpenAI’s recent statement that it won’t use the ”io” brand, iyO has continued legal action.
Trade secret theft allegations escalate the OpenAI io lawsuit
In a new legal filing dated March 13, made public recently, iyO accuses Tang Tan of receiving confidential materials from Dan Sargent, a former iyO engineer. Sargent allegedly downloaded proprietary CAD files, physical prototypes, and internal design documents, which Tan then accessed to accelerate io’s product development by nearly ten years, according to iyO’s claim.
The filing describes how Sargent reportedly renamed sensitive files with nonsense strings like ”ergetght.x_t” and exported CAD data in multiple formats. This covert file transfer supposedly happened days before a June 2024 meeting in San Francisco, where Tan examined iyO’s internal materials alongside an engineer from LoveFrom, Ive’s design firm. This points to a seemingly premeditated effort to appropriate trade secrets to give io a significant competitive advantage.
Whether these serious claims will hold up in court remains uncertain, but this escalation adds a much thornier dimension to what started as a trademark dispute. Such trade secret accusations could expose OpenAI and io to substantial legal risk-and possibly pressure them into a settlement or operational rethink. Legal experts consider misappropriation cases challenging but potentially very costly if proven.
Given OpenAI’s stature in AI development and io’s high-profile design pedigree, this case is also a warning to the tech world about the risks of intellectual property leaks amid rapid innovation and acquisitions.