AI device startup iyO Inc, which recently sued OpenAI and iPhone designer and io co-founder Jony Ive for trademark infringement, is now suing one of its former employees for allegedly releasing confidential information about the company.

iyO has filed a lawsuit against its former executive Dan Sargent in San Francisco Superior Court, per media reports. The company has alleged breach of contract and misappropriation of trade secrets against Sargent by sharing information with another io co-founder, Tang Yew Tan.

“This is not an action we take lightly,” said iyO CEO Jason Rugolo in a statement. “Our primary goal here is not to target a former employee, whom we considered a friend, but to hold accountable those whom we believe preyed on him from a position of power.”

Sargent left iyO in December last year and is now part of Apple.

This follows the federal trademark infringement lawsuit iyO had filed against OpenAI and io earlier this year, claiming name confusion between iyO and io, misappropriation of trade secrets and hiring away key staff from iyO.

The lawsuit had cast a shadow over OpenAI's acquisition of io for $6.5 billion announced in May, forcing OpenAI to pull down a video pertaining to the acquisition from its website and YouTube page.

OpenAI had later said in a statement: “This page is temporarily down due to a court order following a trademark complaint from iyO about our use of the name ‘io.’ We don’t agree with the complaint and are reviewing our options.”

However, earlier this week, OpenAI released another announcement saying that io Products Inc team has officially merged with OpenAI. This time it refrained from referring to Ive's company as just io but as io Products following orders from US District Judge Trina Thompson who ruled last month that iyO has a strong enough case to proceed to a hearing this fall. Thompson had also ordered OpenAI and io to refrain from using the io brand.

iyO, a company spun out of Google’s moonshot factory, was founded in 2021 by Rugolo and Neil Treat. It has focused on building an AI-powered, earbud-like audio computer.

In a social media post, Altman has dismissed Iyo's lawsuit as "silly, disappointing and wrong". He claims that he and Ive chose the name io two years ago in reference to the concept of “input/output” that describes how a computer receives and transmits information. 

The acquisition of iyO is expected to bolster OpenAI's focus on the consumer hardware space putting it in direct competition with the likes of Apple.