OpenAI Acquires io Products, Faces Legal Hurdle Over Trademark Dispute

OpenAI's recent acquisition of io Products, Inc., a hardware startup co-founded by former Apple design chief Jony Ive, has encountered a legal challenge. A federal judge has issued a temporary restraining order, halting the marketing of the new venture due to a trademark dispute with startup IYO.

On May 21, 2025, OpenAI announced its acquisition of io Products in a deal valued at approximately $6.5 billion. The acquisition aimed to integrate io's team of 55 engineers and designers into OpenAI, with Ive assuming significant creative and design responsibilities. The collaboration was set to develop new AI hardware products, with the first expected to be unveiled in 2026.

However, shortly after the announcement, IYO, a startup founded by Jason Rugolo, filed a trademark complaint against OpenAI and io Products. IYO alleged that the similarity in company names could lead to confusion and harm its business prospects. Rugolo claimed that IYO had previously pitched its AI hardware product to OpenAI and Ive's design firm in 2022.

U.S. District Judge Trina Thompson ruled that IYO has a strong enough trademark infringement case to proceed to a hearing in October. Until then, she ordered OpenAI, Ive, and their partners to refrain from using the "io" or similar marks in marketing. In compliance, OpenAI removed online references to the venture, replacing them with a notice about the court order. The company stated, "We don't agree with the complaint and are reviewing our options."

IYO CEO Jason Rugolo welcomed the ruling, asserting the company's determination to defend its brand rights against more prominent industry players. He stated, "IYO will not roll over and let Sam and Jony trample on our rights, no matter how rich and famous they are."

The legal dispute has raised questions about OpenAI's strategic expansion into the hardware market. The collaboration with Jony Ive was seen as a significant move to integrate advanced AI into thoughtfully designed hardware, potentially setting new standards in the tech industry. However, the trademark dispute with IYO highlights the challenges that can arise when entering new market segments.

The outcome of the October hearing will likely have significant implications for OpenAI's hardware ambitions and the broader AI industry. As the case progresses, stakeholders will be closely watching how OpenAI navigates this legal challenge and its impact on the company's future endeavors.