This Tiny Startup Just Made OpenAI Wipe Its Billion-Dollar Brand
And If You’re Building a Brand, Pay Attention
In May, OpenAI and Jony Ive unveiled the first glimpse of their AI hardware moonshot: a sleek, voice-powered device teased under the name “io.” It had everything—cinematic video, a designer pedigree, massive hype.
Then, in June, it disappeared. Completely.
Why? Because a tiny startup sued—and won.
Welcome to the most expensive naming mistake in recent memory.
This isn’t about ego. It’s about enforceable IP.
Because trademark law protects against “confusingly similar” names in the same category—not just identical spellings—and “io” and “iyO” are phonetically indistinguishable, the court found a high likelihood of consumer confusion.
If you’re a founder, investor, or exec launching anything even remotely consumer-facing, this is your playbook for what not to do.
The Setup
iyO, Inc., a startup that spun out of Google X, launched its AI-powered earbud, the iyO One, in early 2024.
They registered the name “IYO” (pronounced eye-oh) with the USPTO—class 9, covering AI wearables.
They met with Sam Altman and Jony Ive’s teams in 2022 to pitch it. Got polite passes.
Two years later, OpenAI launches a hardware initiative called… io. Same pronunciation. Same product category. Much bigger spotlight.
iyO saw the writing on the wall. In June 2025, they filed a federal lawsuit and moved for an emergency restraining order.
A week later? Judge says: shut it down.
What That Actually Means
OpenAI is now legally barred from using “io” to describe its product in any capacity. Website pulled. Social posts deleted. Promo videos vanished. Court order published.
Yes, a startup with a federally registered mark—and solid documentation of prior use—just got a judge to kneecap OpenAI’s most hyped product launch since ChatGPT.
This is rare. And that’s the point.
Judges don’t issue TROs like candy. To get one, you need to show (1) real legal rights, (2) likelihood of success on the merits, and (3) irreparable harm. iyO did all three—and the court agreed.
For Founders and Investors: This Is Why Brand ≠ Vibe
If you’re raising capital, preparing for launch, or hiring designers to name your product:
“io” looked clean and modern.
It also got legally nuked.
Here’s why this matters to you:
Trademarks don’t care about aesthetics. They care about first commercial use, consumer confusion, and enforceability.
You don’t get to play ignorant. If you were pitched a product by a startup, declined, then launched a similarly branded device? That’s not “coincidence.” That’s evidence.
Brand risk is market risk. You can have the best product in the world—if you have to rename it during rollout, you lose time, trust, and traction. And you will pay to fix it.
This isn’t theoretical. The branding, legal, and operational costs here are real—and growing by the day.
If You’re Building Anything in AI or Hardware, Do Not Do This
OpenAI’s hardware device is apparently still in development. But the brand is now radioactive.
They’re appealing the TRO. There’s a court date in October for a preliminary injunction. They might lose again. And unless they settle or rebrand, they’re in legal limbo for months, possibly years.
Meanwhile, iyO now owns the narrative—and gets to fundraise, recruit, and ship with the court’s credibility behind them.
What You Should Be Doing (Right Now)
If you’re a high-growth company working on anything with public visibility:
Audit your trademarks. Not just registration—actual use, classes, and global reach.
Vet your product names early. Don’t let creative agencies or founders ship names without clearance.
Document everything. If you’ve had meetings with adjacent players, it matters. You don’t want that timeline surfacing in court.
Don’t be lazy with “short, cool” names. The shorter the name, the more likely someone else already owns it. And you won’t win a dispute with just vibes and branding decks.
Final Word
OpenAI didn’t lose a court case.
They lost momentum. They lost control of the narrative.
And they proved, again, that no one—no matter how well-funded or well-known—is above IP law.
If you’re in a naming cycle, launching a product, or acquiring a startup: assume you will get sued if you don’t vet it properly. Because someone like iyO will have the receipts. And the court won’t care how smart your team is.
Good branding is legal branding.
And if your name isn't clean, your whole launch might disappear in a court order—just like “io” did.
Need a review of your naming, IP portfolio, or pre-launch risk?
Contact me. I help founders and funds bulletproof their brands before they blow up—or get blown up.
And no, you’re not too early to start. You’re probably already late.
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