Apple Scoffs at Cisco Trademark Lawsuit, Says It Will Prevail

By Chris Preimesberger  |  Posted 2007-01-11

Apple Scoffs at Cisco Trademark Lawsuit, Says It Will Prevail

The calm discussion between Apple and Cisco Systems over the product name iPhone that started in 2001 may turn into an unpleasant legal tussle if its not settled out of court, because the two companies remain staunch that they each have the right to use it.

Apple CEO Steve Jobs on Jan. 9 introduced what he called the iPhone, the companys most important new product since the iPod in 2001. Jobs, calling the combination iPod, cell phone and connected handheld one of the most exciting products hes ever worked on, said the iPhone would "reinvent the telephone."

The following day, Cisco filed a lawsuit against Apple for trademark infringement on the iPhone name, because it received the iPhone trademark seven years ago when it acquired Infogear. Infogear, which filed for the trademark in 1996, became a part of Ciscos Linksys division. That division introduced a new family of iPhones early in 2006 and expanded it again in December.

Apple on Jan. 11 was nonchalant about the legal threat.

"We think the Cisco lawsuit is just silly, because a number of other VOIP companies are already using the name iPhone," Natalie Kerris, Apples director of music public relations, told eWEEK.

"We contend that their United States trademark is tenuous at best, because we see it as a generic term. We are also the first company to name a cell phone as the iPhone. If Cisco wants to challenge us on it, were confident well prevail."

Apple has no comment on what the next legal move will be, or whether the discussions are going to continue with Cisco, Kerris said.

Teledex, Nex-Tech and Etronicsland all are among the companies currently marketing products called iPhone on the Internet at this time.

Apple Already has iPhone Trademarked Elsewhere

A search of trademark and patent office Web sites revealed that Apple already has the iPhone trademarked in the United Kingdom, Singapore and Australia, while other filings are pending in Canada, the European Union, New Zealand and Hong Kong.

Cisco said in its complaint that Apple had first approached the company about acquiring the rights to the iPhone trademark in 2001. Over the years, Apple continued to make requests for the rights, including several attempts in 2006, Cisco said.

"Weve owned the iPhone trademark for years. Apple has acknowledged this by coming to us repeatedly over the last five years to acquire the right to use the trademark," said Cisco spokesperson John Noh. "Thats a clear acknowledgement that we own the trademark. The actions we took are not about money or the product, but about an obligation to protect our trademark in the face of Apples willful violation of it," he added.

In the weeks leading up to the Jan. 9 launch of the new Apple iPhone, Cisco and Apple had engaged in extensive discussions over an agreement to "share" the trademark, according to Noh. But Apple launched the iPhone on Jan. 9 without signing the agreement, he added.

"We sent over the final terms to them Monday, and we didnt get the approved agreement back from them. But they launched the product anyway. We believed that meant they agreed to the terms and would send over a signed agreement to us. That didnt happen today. By that action, we believe they decided to forgo the agreement and used our trademark illegally," Noh said.

Next Page: Riding a fine line, hoping for a settlement.

Riding a Fine Line,

Hoping for a Settlement">

Apple Riding a Fine Line, Attorney Says

What Apple is saying is the term iPhone in VOIP (voice over IP) is generic, and Ciscos trademark doesnt have much teeth to it, said David Radack, head of the intellectual property department at law firm Eckert Seamans Cherin & Mellott LLC in Pittsburgh, Pa.

"Apple is riding a really fine line there. If theyre successful in saying iPhone is generic for telecom, then what if Motorola comes up with an iPhone? They cant then turn around and enforce the term iPhone against others in the industry. Its a double-edged sword," Radack added.

Should Cisco and Apple go to court over the dispute, the argument will center on "the likelihood of confusion," Radack said. "Is Apples use of iPhone likely to be confused with existing Cisco use of the trademark iPhone? Someone with a cell phone may also be a buyer of VOIP services for say, a major law firm," he said.

The confusion argument can also work in the reverse.

"When a big player (like Apple) makes a splash with that term, people who see Ciscos use could say, Hey you ripped off Apple. That is the other thing youre fighting," added Radack.

In using the likelihood of confusion argument, the question to be settled is whether the Cisco product is related to the Apple product. With Ciscos assertion that cell phones, work phone and home phones are going to converge, it is likely to argue that they are related.

"Ciscos argument is this is all related and it would be a natural expansion for us to go into cell phone," said Radack.

In response to the Apple trademark efforts in other countries, Radack said: "Thats interesting theyre trying to isolate [Cisco] to the U.S., but that is the biggest market in the world, and it would be difficult to operate in different countries with separate trademarks."

Ciscos iPhones are cordless phones.

"We feel very strongly because the iPhone today is not whats going to be the device tomorrow. The potential for the convergence of home, cell and work phones is limitless," said Noh. "Protection of the brand is very important in this regard. Thats at the crux of the matter for us. We were very open to sharing this trademark with them," he added.

Cisco Hopes for a Settlement

Cisco, which filed its lawsuit against Apple in the United States District Court for the Northern District of California in mid-afternoon Jan. 10, is still hoping to come to an agreement with Apple on the trademark.

"We filed a complaint and will let that course of action run through. We want to do whats best for the industry and our customers. We remain open to an agreement," said Noh.

"Its pretty clear this will have to be settled out of court. If they went to court, it is pretty clear Cisco would win. Apple doesnt have a case here," said David Passmore, research director at Burton Group in Sterling, Va. "Quite frankly, I dont know why they dont just call it an iPod. Its an iPod with all these cool features," he added.

In a prepared statement, Ciscos Senior Vice President and General Counsel Mark Chandler said: "Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Ciscos iPhone name. There is no doubt that Apples new phone is very exciting, but they should not be using our trademark without our permission."

But then again, its possible it all wont matter in the long run.

"Im not a lawyer, so I cant comment on the legal aspects of this. But two things are clear," Michael Gartenberg of Jupiter Research told eWEEK. "First, Apple really should have cleared all this up legally before they announced the product, and second, I dont think it really matters what they call it.

"If they change the name to iPod Phone or PodPhone, or whatever, it wont sell even one less device because of that. And everybodys going to call it the iPhone anyway, lets face it."

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