iyO Lawsuit Against OpenAI Now Includes Trade Secret Theft Claims

OpenAI now faces a more serious legal challenge after iyO expanded its lawsuit, adding new claims that go beyond trademark concerns and move into alleged trade secret theft involving key figures linked to the io project. The updated filing directly names Tang Tan, a former Apple designer and now co-founder of io, while also detailing how confidential product data may have changed the pace of development.

The conflict started nearly a year ago when OpenAI acquired io, a company founded by Jony Ive, and soon after, iyO filed a trademark lawsuit claiming the “io” name would confuse customers in the same product category. At that time, iyO said it had already shared details about its AI-powered earpiece technology during meetings with OpenAI, while OpenAI responded that iyO’s CEO voluntarily disclosed information and even offered to sell the company for $200 million after an investment offer fell through.

OpenAI later clarified that it would not use the io brand name, but the legal fight did not slow down and instead continued through multiple filings and procedural steps.

New claims raise stakes

The latest amendment shifts focus to alleged misuse of confidential data, with iyO claiming that former engineer Dan Sargent downloaded internal files and passed them to Tang Tan, who then gained access to detailed design materials including CAD files and prototypes.

“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 trademark; 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.” — iyO filing

iyO argues that this “misappropriation of trade secrets” allowed io to move forward far faster than it otherwise could, and the filing describes how Sargent allegedly renamed files using random strings before exporting them into cross-platform formats.

The court still needs to decide whether these new claims will move forward, and OpenAI has not yet publicly responded to this expanded complaint, which now raises deeper questions about internal access, data handling, and how closely early-stage hardware ideas overlapped between the companies.

More filings are expected soon as both sides continue to push their arguments, and the outcome will likely shape how companies handle confidential product discussions in future partnerships.