Recently, OpenAI and Jony Ive faced a trademark lawsuit initiated by a Google-backed startup called Iyo, even before they had a product to market. The lawsuit claims that the name of Ive’s company, “io,” resembles Iyo in pronunciation and overlaps in their business focus, which involves developing audio-first screenless devices powered by artificial intelligence.

OpenAI’s CEO, Sam Altman, has publicly discussed this ongoing legal dispute. On the surface, Iyo seems to have a solid argument.

Altman has revealed that the lawsuit is rooted in his refusal to invest in Iyo when their founder, Jason Rugolo, sought $10 million for his AI-focused audio hardware company. In their email exchanges, Rugolo expressed enthusiasm about his project’s potential, while Altman declined due to ongoing competitive developments.

Rugolo later inquired whether OpenAI would want to collaborate instead, but Altman stated he needed to consult with Ive. Eventually, OpenAI acquired Ive’s “io” company for $6.5 billion, prompting Rugolo’s confusion and dissatisfaction.

In his posts on X, Altman has suggested that the lawsuit may be Rugolo’s attempt to retaliate for not securing investment from OpenAI. He criticized the legality of using lawsuits as a means of negotiation, arguing that it sets a poor example for the industry.

On the other hand, Iyo claims that OpenAI was aware of its operations and innovations prior to launching “io.” The startup cited prior meetings with Altman’s investment team and shared insights with Evans Hankey, a former Apple designer who co-founded “io” with Ive. In response to Altman, Rugolo shared his frustrations, articulating how distressing it feels when powerful investors pivot to competitive ventures after a pitch.