Trademark Trouble Hits OpenAI–Jony Ive AI Hardware Venture as Judge Halts Public Rollout

A bold new collaboration between OpenAI CEO Sam Altman and iconic Apple designer Jony Ive has been forced into an abrupt pause after a federal judge issued a preliminary injunction over a trademark dispute—putting one of Silicon Valley’s most high-profile hardware bets in legal limbo.

The partnership, announced in May, centers on building a next-generation artificial intelligence device—an ambitious effort to marry Altman’s frontier AI development with Ive’s celebrated minimalist hardware design ethos. As part of the plan, OpenAI revealed it would acquire io Products, a product and engineering company co-founded by Ive, in a deal reportedly worth $6.5 billion. The initiative was quietly years in the making, with backing from Altman’s personal investment arm and rumored support from SoftBank.

But the fanfare was short-lived.

Just days after OpenAI publicized the acquisition, a lesser-known California startup named IYO Inc. filed a federal trademark lawsuit claiming it had previously pitched its AI device concept to both Altman’s and Ive’s teams back in 2022. IYO, which is also developing AI-integrated hardware, argues that OpenAI’s new “io” branding is confusingly similar to its own and that the tech giant is infringing on a name and concept it introduced first.

IYO CEO Jason Rugolo said in court filings that his company not only has prior trademark rights but also shared confidential ideas about hardware use cases and branding—only to watch a powerful duo later roll out something strikingly similar.

On Friday, U.S. District Judge Trina Thompson agreed that IYO’s claim merited serious consideration. She issued a temporary restraining order prohibiting OpenAI, Altman, and Ive from using “the IYO mark, and any mark confusingly similar thereto, including the IO mark,” for any product marketing or public materials related to the AI hardware initiative. A full hearing on the matter is scheduled for October.

As a result, OpenAI has scrubbed all mention of the new hardware venture from its website. The May 21st announcement page now displays a notice stating the content is “temporarily down due to a court order,” and includes a terse message: “We don’t agree with the complaint and are reviewing our options.”

In a sharply worded public statement, IYO’s Rugolo made clear he’s not intimidated by OpenAI’s muscle.

“IYO will not roll over and let Sam and Jony trample on our rights, no matter how rich and famous they are,” Rugolo said Monday.

The case shines a rare spotlight on the opaque and competitive world of AI hardware development—a sector still in its early days, but one that major players like OpenAI, Google, and Apple see as the future of computing. While AI models like ChatGPT have dominated headlines, many in the industry believe the next frontier lies in physical devices purpose-built to interact seamlessly with these models, potentially reshaping how people access information, communicate, and perform daily tasks.

For Ive, the legal controversy marks a sharp detour from his usual low-key, high-design profile. After departing Apple in 2019, he launched the design firm LoveFrom and has taken on select projects ranging from luxury audio to pandemic-era public service work. His reentry into the consumer tech spotlight through OpenAI was widely seen as a signal that AI hardware could be as disruptive—and as culturally defining—as the smartphone.

Now, that vision is on hold.

The October hearing will determine whether OpenAI can continue developing and promoting the device under its current branding—or whether it will need to completely rethink how it brings its first AI-native gadget to market.