Apple picks wrong fight with Cisco; misfires on iPhone trademark

Apple picks wrong fight with Cisco; misfires on iPhone trademark

Summary: Why didn't Apple work out the legalities of using Cisco's iPhone trademark before going through the Macworld song and dance? Very good question.

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TOPICS: Cisco
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Why didn't Apple work out the legalities of using Cisco's iPhone trademark before going through the Macworld song and dance?

Very good question. But one that could be summed up in one word: Arrogance. The more Steve Jobs spoke at Macworld the more it seemed safe to assume that Apple worked out any trademark issues with Cisco. In fact I assumed it.

As of this morning though, Cisco was still waiting for the paperwork. Turns out Apple picked the wrong fight--Cisco sued today and has what could be a valid case (see complaint). Would you do all of this if you didn't have a trademark locked down? Can you imagine if Apple has to rebrand the "iPhone?" Then again maybe telecom revolutions can't wait for trademarks?

Connecting the dots, you could see it coming. In an email to me earlier today, Cisco spokesman John Noh said:

"The fact is that we have not received the approved agreement back from Apple as late as this morning. What we said in our statement, which you posted, was that we sent them the final terms on Jan. 8 and by the fact that they launched the iPhone on Jan. 9 without an agreement in place with us, we could only assume that they had agreed to our final terms and that we expected a signed agreement from them as early as yesterday. As of this morning, we're still waiting."

Why would a company with a market cap of $83 billion (Apple) pick a fight with one worth $174 billion (Cisco)? Talk about reality distortion fields.

Sure, you could argue that Cisco is just filing a lawsuit to extract more dough from Apple. But Cisco owns the trademark and it has the right to license it or not. And you'd think Steve Jobs would nail down trademark issues--the Cisco lawsuit just doesn't look good for a guy with options backdating issues. According to Cisco's complaint Apple has been asking about the iPhone trademark since 2001. "Apparently dissatisfied with Cisco’s refusal to allow Apple to use the mark iPhone for products that would conflict directly with Cisco’s current use of the mark, Apple began a surreptitious effort to attempt to obtain rights to use the name 'iPhone'," said Cisco in the complaint.

As for the complaint, it's pretty clear Apple has issues. It infringed on Cisco's trademark in front of the world. Why shouldn't Cisco seek an injunction, destruction all everything with Apple's iPhone branding and damages?

According to the complaint filed by Cisco in the Northern District Court of California:

Apple’s use of “iPhone” in its product promotion and advertising at Macworld constitutes the use in commerce of a colorable imitation, copy and reproduction of Cisco’s iPhone mark. Upon information and belief, the two marks will share an identical sight and sound and a strong similarity of meaning. Apple’s use of “iPhone” for a cellular and internet phone device is deceptively and confusingly similar to Cisco’s long-standing trademark for an internet based telephony device.

Apple’s infringement constitutes a willful and malicious violation of Cisco’s trademark rights, aimed at preventing Cisco from continuing to build a business around a mark that it has long possessed.

Cisco alleges that Apple’s use of Cisco’s trademark inures and creates a likelihood of injury to Cisco’s business reputation because persons encountering Cisco and its products and services will believe that Cisco is affiliated with or related to or has the approval of Apple, and any adverse reaction by the public to Apple and the quality of its products and the nature of its business will injure the business reputation of Cisco and the goodwill that it enjoys in connection with its iPhone trademark.

My hunch--and it is only a hunch--is that the two parties will settle and Apple will pay up. After all, it really has no choice. Cisco can't be pushed around and if there's a lawyer arms race ahead this skirmish could last awhile.

Topic: Cisco

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114 comments
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  • Another hunch...

    Apple had already agreed to the Cisco terms and worked a clever publicity deal asking Cisco to sue them for iPhone. Settle whenthe publicity dies down.

    Millions in free publicity! Hmm
    Prognosticator
    • You really need to get off the drugs.(nt)

      .
      ShadeTree
    • Put the crack pipe DOWN..!

      [b]Apple had already agreed to the Cisco terms and worked a clever publicity deal asking Cisco to sue them for iPhone. Settle whenthe publicity dies down. [/b]

      Uh.. Right. Who exactly needs the publicity? Apple?

      NOT!

      With the frenzy of articles on ZDNet, CNet and most other techno-geek type sites swooning like a schoolgirl with a crush after Jobs announced the iPhone, you'd have to be living in a cave or under a rock to not have noticed the TONS of publicity the Apple phone gizmo got.

      And this kind of publicity isn't the kind you necessarily want. You want GOOD publicity - the kind like Apple was already getting from the techno-media. You KNOW you're doing something right when the general media jumps on the story to report your new hardware on the nightly news.

      You WANT people saying how your new product is the greatest thing since sliced bread - not that you've stolen someone's trademark.

      And besides... Apple is supposed to be the company that can do no wrong. This sorta thing puts a rather ugly, VERY public tarnish on that image.

      So...OK.. How about Cisco/Linksys and their iPhone? Somehow, I doubt even a ton of publicity would improve the product's standing. It's not the kind of product consumers really gotta have (as opposed to the common as dirt cell phone). And even if you did, yoru VOIP prodvider would probably have deals in place for the hardware you need to make use of their services.
      Wolfie2K3
      • No such thing as bad publicity, in this instance

        Getting the name out there, waaaay out there, is really all that matters. Which is better, [i]...TONS of publicity...[/i], or hundreds of tons of publicity?
        Spoon Jabber
  • Apple owns international TM for iPhone, no?

    Just not in the US.


    Why can't they introduce it as the iPhone as that *could* be its intended name
    outside the US.

    Come June, they simply call it something else for the domestic market and negate
    Cisco's argument?
    thepluckypenguin
    • That won't work

      It won't negate their infringement of Cisco's trademark. They promoted the iPhone branding of their product in a US venue. That is enough.
      Teran
      • WRONG

        Cisco owns the TM in other countries too -- like Canada.
        ChazzMatt
        • I meant that in reply

          to the other guy who mentioned "international" TM, not you.
          ChazzMatt
  • I'd suspect arrogance

    If Apple didn't have it locked down, they shouldn't have used it. Apple could have called it the iPod Phone or Apple Phone and having the iPod in the name IS NOT a bad thing from a branding perspective.
    georgeou
    • Problem is...

      You can copyright an idea, you can't copyright a name... unless the name is a
      trademark... can anyone prove that the iPhone as Cisco has it now was actually noy
      only trademarked, but used?
      Matt Ridge
      • Check out the website

        Go look at www.linksys.com and you will see the iPhone listed as well as three links to vendors with shipping product. Yes it can be proven that CISCO had a product and not just the name.
        reason
      • Available at Wal-Mart(R)

        ...among many others and has been for years.
        Logics
    • Maybe Apple Pod or Pod for short?

      Pagan jim
      Laff
      • Gives a whole new meaning ...

        ... to the phrase "pod people"
        bradt
    • perhaps a takeover

      Were I Apple I would just buy control of cisco assign the name to Apple then sell cisco off.. problem solved...
      edcav@...
      • takeover???

        Cisco is so much larger than apple, i dont think that is possible
        riner1@...
  • How so?

    This seems like typical buisness too me. I'm sure that lawyer and negotiations were
    involved pre the announcement. I'm also certain that Apple due to time contraints
    got the wink and nod from Cisco and then after the iPhone made such a big splash
    "other" thing is dark corridors of buisness happened. "Hey it looks like this could be
    a hit" type things. Second thoughts and payola. In the end something will be worked
    out either Apple will or won't keep the name and it will move on the "A rose by any
    other name would smell as sweet"

    Pagan jim
    Laff
    • I don't think so.

      Cicso doesn't need Apple's marketing to boost sales for them. Cisco's customers are corporate and Apple's are mainly retail. Jobs just has an obsession on calling all his products iAnything. In the future he might have to say iLied.
      osreinstall
      • But Linksys Customers are mostly retail.

        Check out Wal-Mart, BestBuy, CompUSA, etc. Filled with Linksys products.
        Logics
        • Cisco is the parent corporation.

          And Linksys has no say so in the matter. And Linksys is a very small part of Cisco. Cisco is hugh in the corporate world. I like mine. Nice try.
          osreinstall