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accessed on Thursday, 11 January 2007
Cisco sues Apple over use of iPhone trademark By Marguerite Reardon
And Tom Krazit Staff Writer, CNET News.com
Published: January 10, 2007, 5:14 PM PST
Last modified: January 10, 2007, 6:16 PM PST
update Cisco Systems has filed a lawsuit against Apple accusing the company
of infringing its iPhone trademark, the networking company said Wednesday.
The suit also accuses the iPod maker used a front company to try to acquire
rights to the name. Cisco accused Apple in a suit filed in United States
District Court for the Northern District of California of willingly
infringing its trademark when it announced the new iPhone at the Macworld
Expo in San Francisco on Tuesday. Cisco said in the complaint that Apple had
attempted to get rights to the iPhone name several times, but after Cisco
refused, the company created a front company to try to acquire the rights
another way, according to the lawsuit (
Mark Chandler, senior vice president and general counsel at Cisco, said in
an interview that the companies were close to finalizing a deal Monday night
that would have allowed both Cisco and Apple to use the iPhone name. One
aspect of the agreement called for some sort of technical interoperability
between Cisco's Linksys Internet telephony products and Apple's cell phone.
Chandler said the hope was that by making the products interoperable, it
would help alleviate confusion among customers, who would likely be target
consumers for both products. The companies left the negotiating table at 8
p.m. Monday with only a few points left to negotiate, Chandler said. Then on
Tuesday, Apple CEO Steve Jobs took the stage at the Macworld Expo and, amid
much fanfare, unveiled the new "iPhone."
"We indicated that it was important that the negotiations be completed
before the launch of their product," Chandler said. "Our expectation was
that our name wouldn't be used without permission. And it is a surprise when
any large company announces a product using a name they don't have a right
to use." Chandler said Cisco made it clear after Apple's launch that
negotiations needed to be completed immediately, but he said Cisco has still
not heard from Apple.
Cisco is seeking an injunction that will prevent Apple from using the name
as well as damages from the company, the lawsuit said. Fresh off one of the
biggest launches in its history, a product Jobs called one of the most
exciting products he's ever worked on, the company dug in its heels. "We
think Cisco's trademark suit is silly...We believe (their) trademark
registration is tenuous at best," said Natalie Kerris, an Apple spokeswoman.
"There are already several companies using the iPhone name for VoIP (voice
over IP) products," Kerris said. "We're the first company ever to use iPhone
for a cell phone. If Cisco wants to challenge us on it, we're confident
we'll prevail." Cisco iPhone Credit: Linksys Linksys iPhone
Cisco obtained the iPhone trademark in 2000 when it acquired Infogear, a
small Redwood City, Calif., start-up that developed consumer devices that
allowed people to easily access the Internet without a PC. Infogear had
actually registered the iPhone trademark in March 1996. Cisco's home
networking division, Linksys, has been using the iPhone trademark on a new
family of voice over IP phones since early last year, Cisco said. And last
month, Linksys expanded the iPhone family with additional products. A
British company called Orate Telecommunications Services also offers a VoIP
phone called an iPhone, and closer to home, a San Jose, Calif., company
called Teledex offers an iPhone for hotel rooms. Chandler said Cisco is
aware that other companies have used the iPhone name and in the past Cisco
has been involved in "enforcement actions involving the use of this name."
For more than a year, Apple watchers have speculated about a new phone
developed by Apple that would combine smart phone cellular technology with
the full functionality of an iPod music and video player. Fans and bloggers
had been referring to an Apple-designed cell phone as the iPhone for some
time, and Apple's repeated attempts at obtaining the trademark make it clear
Apple hoped to use the moniker as well.
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. "Each time, Apple was told that Cisco was not
interested in ceding the mark to Apple," Cisco's complaint reads.
Apple apparently was not willing to accept Cisco's decision, so it created a
Wilmington, Del.-based front company called Ocean Telecom Services that
applied to use the trademark in the U.S. on September 26, 2006, according to
Cisco's complaint. That company, Cisco says in the filing, is "owned or
otherwise controlled by Apple and is the alter ego of Apple." Around the
same time on September 19, 2006, Apple also filed for the trademark for
iPhone in Australia.
In Ocean Telecom Services' U.S. filing and in Apple's Australian filing,
each company refers to a trademark filing made on March 27, 2006, in
Trinidad & Tobago. In its complaint, Cisco said that it's the reference to
this document that is almost identical in each filing that leads the company
to believe Ocean Telecom is actually owned by Apple.
Longtime Apple watcher Roger Kay, an analyst with Endpoint Technologies
Associates, was blunt in his assessment of the situation. "This was just
brass balls on the part of Steve (Jobs), to go in there and just grab that
trademark and not pay a license for it or negotiate. It's the height of
arrogance," Kay said. "He basically thinks he can get away with it."
However, it's likely that the two companies will settle their differences,
as prolonged litigation doesn't really serve either company, Kay said.
"Apple is playing chicken with Cisco, and there's other companies I'd rather
play chicken with," he said, referring to Cisco's deep pockets.
Cisco holds a clear advantage in the legal dispute as the trademark holder
of record and having already released products using the iPhone name, said
Bruce Sunstein, co-founder of the Boston law firm Bromberg & Sunstein. "The
one who has a registration is in a better position than the one who does
not."
Apple's only choice is to argue that its "iFamily" of trademarks such as
iPod, iTunes and iMac create confusion in a customer's mind as to who makes
the iPhone, Sunstein said. It's not out of the question, but in general the
company in Cisco's position with clear rights to the trademark has a
stronger argument than a company making the family argument, he said.
Also, the applications for trademarks in other countries have no bearing on
Cisco's iPhone trademark, Sunstein said. "The fact that Apple may have
superior rights in Australia doesn't (give) them any rights in the U.S.," he
said.
