TLDR: AI device startup iyO Inc., already embroiled in trademark disputes with OpenAI and Jony Ive, has filed a new lawsuit against its former executive, Dan Sargent. The company alleges Sargent breached his contract and misappropriated trade secrets by leaking confidential designs of an unreleased product, reportedly to a close associate of Jony Ive. This latest legal action intensifies the competitive landscape surrounding the development of next-generation AI interfaces.
Redwood City, CA – July 11, 2025 – iyO Inc., an artificial intelligence device startup, has escalated its legal offensive, filing a new lawsuit against former executive Dan Sargent for alleged breach of contract and misappropriation of trade secrets. This development comes as iyO Inc. is already engaged in high-profile trademark infringement litigation against tech giants OpenAI and renowned designer Jony Ive.
The lawsuit, filed this week in San Francisco Superior Court, accuses Sargent of leaking a confidential drawing of iyO’s unreleased product. Sargent, who departed iyO in December and is now employed by Apple, allegedly met with Tang Yew Tan, a co-founder of ‘io Products’ and a close ally of Jony Ive, who notably led the design of the Apple Watch. According to court filings, Tan revealed in a declaration that he had spoken with a ‘now former’ iyO engineer who was seeking new employment due to frustrations with ‘iyO’s slow pace, unscalable product plans, and continued acceptance of preorders without a sellable product.’ These conversations reportedly led Tan to conclude that iyO was offering ‘vaporware’ – a product advertised but not yet functional or existing – prompting him to avoid direct engagement with iyO and discourage others from doing so.
Jason Rugolo, CEO of iyO Inc., stated, ‘This is not an action we take lightly.’ He further elaborated on the company’s stance, emphasizing that the ‘case is about holding people accountable when they misuse their influence,’ hinting that his own concepts may have influenced projects by Ive and OpenAI’s Sam Altman.
This new legal battle is intertwined with a broader, secretive competition to pioneer a novel method of interacting with AI chatbots, moving beyond traditional screens and voice assistants like Amazon’s Alexa. The company that successfully develops this intuitive AI interface stands to gain immense profits.
In May, OpenAI, the creator of ChatGPT, acquired ‘io Products,’ a company co-founded by Jony Ive, in a deal reportedly valued at nearly $6.5 billion. Shortly thereafter, iyO Inc. initiated a trademark infringement lawsuit against OpenAI and Ive, citing the similar-sounding ‘io’ brand and previous interactions between the firms. Last month, US District Judge Trina Thompson ruled that iyO had presented a sufficiently strong case to proceed to a hearing this fall. Consequently, she ordered OpenAI CEO Sam Altman, Jony Ive, and OpenAI to cease using the ‘io’ brand, leading them to remove associated web pages and mentions of the venture.
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Neither Dan Sargent nor Apple has issued a public comment regarding the lawsuit at the time of this report.
