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Cisco Sues Apple Over iPhone Name

Thursday, January 11th, 2007 at 10:15 AM - by

Cisco on Wednesday filed suit against Apple over its use of the iPhone name, prompting Apple spokeswoman Natalie Kerris to tell MarketWatch: "We think Cisco's trademark lawsuit is silly. Apple is the first company to ever use the 'iPhone' name for a cell phone. We believe that Cisco's trademark registration is tenuous at best. If Cisco wants to challenge us on it, we are very confident we would prevail."

She also noted that companies other than Cisco and Apple have used the iPhone name for voice-over IP products, although she didn't state any of them, and a cursory Internet search did not turn them up.

Cisco's filing demands that Apple not use the name, which Cisco's Linksys division uses on a series of wireless phones that began shipping last month. Cisco has owned the trademark on the iPhone name since 2000, when it purchased InfoGear, which originally owned the rights.

Mark Chandler, senior vice-president and general counsel for Cisco, said on Wednesday that his company assumed Apple had agreed to the terms it delivered on Monday night when the iPhone was introduced on Tuesday, but it turned out that Apple had never signed the agreement. "Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco's iPhone name," he said. "There is no doubt that Apple's new phone is very exciting, but they should not be using our trademark without permission."

Trademark attorney Allonn Levy told IDG News that Apple's release of the iPhone "could be seen as intentional infringement," since it had previously been in talks with Cisco for the use of the name. He called Apple's decision "a dangerous move."

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A guest said: (hide)

Thu Jan 11, 2007 11:39 am

"She also noted that companies other than Cisco and Apple have used the iPhone name for voice-over IP products, although she didn't state any of them, and a cursory Internet search did not turn them up."

Apparently a very cursory search...#5 on the list under Google ---. "iphone voip"

http://www.orate.co.uk/Voip/iPhone.html

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 12:34 pm

So many other choices.

AyePhone

EyePhone

iFone

iPhown

iFown

Dumb, yes, but no dumber than "Zune"

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mahuti said:

member since 09 Jan 2003 with 377 posts, TMO Staff, send him a message or view his profile

Thu Jan 11, 2007 2:03 pm

From Cnet, discussing the same thing; "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."

So those are at least a few other examples of other companies using the name.

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 3:07 pm

IMO Cisco is just covering themselves because Apple didn't finalize the agreement before the Keynote. Once that is signed by both parties this lawsuit will evaporate.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 3:45 pm

I disagree with geoduck. There is some serious lawyer and spokeshole chest thumping going on. This is a very big story. I could see the iPhone name costing Apple $250 million if it gets settled and a cool $1 gigabuck if it goes to trial.

Question for the peanut gallery... Do you think that Cisco just happened to ship its iPhone(R) last month with an intention to do some predictable amount of sales? Or do you think it was a strategic move to assert usage of the trademark, establish damage via dilution that Apple would perpetrate and basically get ready to rape Steve Jobs for being so attached to the name? My bet is on the latter. And if Steve changes his mind on the name, they'll rape him even harder.

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A guest said: (hide)

Thu Jan 11, 2007 4:10 pm

Bosco wrote:
I disagree with geoduck. There is some serious lawyer and spokeshole chest thumping going on. This is a very big story. I could see the iPhone name costing Apple $250 million if it gets settled and a cool $1 gigabuck if it goes to trial.

Question for the peanut gallery... Do you think that Cisco just happened to ship its iPhone(R) last month with an intention to do some predictable amount of sales? Or do you think it was a strategic move to assert usage of the trademark, establish damage via dilution that Apple would perpetrate and basically get ready to rape Steve Jobs for being so attached to the name? My bet is on the latter. And if Steve changes his mind on the name, they'll rape him even harder.

It possibly costing Apple $250 million is a number totally plucked out of thin air, I would say. Any judge will know that a fraction of people would have heard of name "iPhone" had it not been for Apple and the Apple rumor mill, not because of Cisco and the Cisco rumor mill (which is a zero reality). I would say, Cisco with their voip iPhone has already benefitted greatly from Apple's, up until recently, rumored iPhone.

And on your second issue, Cisco shipping their iPhone only weeks ago was both totally opportunistic as well as strategic. Opportunistic, because never before had so many ears been eager to hear about the iPhone as the rumor mill was in full swing. And strategic, because now they can go to court saying: Well, the iPhone name was not just in the drawer, we did something with it.

It will likely cost Apple some money, but they will have a sympathetic ear from any judge, I would say, as Apple was the one who made iPhone famous and Cisco was just opportunistically scheming. I agree with Natalie Kerris' implied statements that by Cisco not defending the name agressively against others using it, they will pay for it considerably in credibility. They might in effect have let it slip back into the public domain.

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Rainy Day said:

member since 07 Jun 2005 with 607 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 4:21 pm

I do think Cisco is operating in bad faith here. If they thought they were close to a signed deal, there was no presseeing need to file a lawsuit because of the keynote.

Apple hasn’t started using the moniker yet; merely announced an intent to do so. And Apple does own the iPhone trademark in many other countries.

Cisco is looking to milk this for all they can. Nothing more, IMO.

Personally, i don’t think it is such a great name. Apple would be well off to choose something else.

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A guest said: (hide)

Thu Jan 11, 2007 4:32 pm

Silly for cisco to use the name iPhone to ride on apple success in the first place, ask anybody prior to this past tuesday an they would associate the name iPhone with Apple, not cisco. Netphone would have been a more appropriate name for cisco's device. I just hope they work this out, I'd rather see my Apple stock Ding $100 rather than head down because of this issue. :p

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Rainy Day said:

member since 07 Jun 2005 with 607 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 4:38 pm

“Netphone would have been a more appropriate name for cisco's device.”

I have to disagree here. The Cisco phone is truly an internet Phone, probably more so than Apple’s new phone.

And since Apple’s device is more than a phone, “iPhone” is a somewhat incomplete and misleading moniker. Apple would be better off with a moniker like iPod (i.e. a moniker which does not try to describe what the device does).

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Rainy Day said:

member since 07 Jun 2005 with 607 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 4:43 pm

Notice too that the prototype does not have “iPhone” actually embossed on it. Only an Apple logo.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 6:44 pm

You get the feeling that if Steve Jobs walked into a bank with a gun, shot and killed a teller, crapped on the floor, and broke into the vault that the peanut gallery would think a judge would let him off and tell the bank that he saved them the cost of the teller's retirement, saved someone 10 minutes opening the vault, and left something valuable they could sell on eBay.

Look, let's say I create a product and call it the iPuppy, and I register the trademark and sell a few thousand. And then Steve Jobs get up at his keynote and unveils the next big thing called the "iPuppy", after years of speculation by Apple fans and rumors on web sites and long discussions about whether the name is available and all that. Guess what? I'm not selling or licensing the name and I'm gonna be rich. I bet after the blatant disrespect of using the iPhone trademark in the keynote without signing a deal, that might be John Chambers' attitude. Except that he's got an army of lawyers. Nothing compels Cisco to sell or license the trademark. That's what the whole point of trademark law is... To give people and companies who play by the rules, an exclusive right in a name in a defined market!

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stuartea said:

member since 08 Aug 2005 with 327 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 6:48 pm

"We shall prevail!"

How very 1984 of them.

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podman said:

member since 14 Feb 2003 with 174 posts, unranked, send him a message or view his profile

Thu Jan 11, 2007 8:00 pm

I don't know who will prevail in this one, but one thing is sure, everyone will know about the iPhone!

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A guest said: (hide)

Thu Jan 11, 2007 9:01 pm

I am thinking that Apple and Cisco had an agreement of some sorts, but when the Apple iPhone started get a lot of buzz then Cisco wanted more money.

I have been thinking of a name if Apple loses to Cisco, I would think that MacPhone would be a good one.

Edison Carter

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A guest said: (hide)

Thu Jan 11, 2007 9:23 pm

Rainy Day wrote:
Apple would be better off with a moniker like iPod (i.e. a moniker which does not try to describe what the device does).

iCandy?

:p

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Jonkun227 said:

member since 02 Mar 2004 with 238 posts, unranked, send him a message or view his profile

Fri Jan 12, 2007 7:25 am

Bosco wrote:
You get the feeling that if Steve Jobs walked into a bank with a gun, shot and killed a teller, crapped on the floor, and broke into the vault that the peanut gallery would think a judge would let him off and tell the bank that he saved them the cost of the teller's retirement, saved someone 10 minutes opening the vault, and left something valuable they could sell on eBay.

I'm crying. Honestly, I laughed so hard I cried. I've tried to come up with a way to describe the fanatical faith in Jobs, but I've never come close to the accuracy of this hyperbole.

I have a number of conflicting thoughts on this subject. For some reason I think people want to read about my thoughts so I'm posting them here.

A) Apple was the first that I'm aware of to do the i_____ naming scheme. e____ was already tired when the iMac was introduced. But once the iMac hit the stores everybody and their dog had a product with a similar name and translucent polycarbonate shell. This is far from a right to the usage of any term that begins with a lowercase "i", but I think it lends support to the fact that Cisco took advantage of Apple's popularity and squatted on the name for a very long time.

B) As mentioned, Cisco hasn't defended the name when companies with much shallower pockets used it. Only when Apple steps up do they get upset (at least according to my highly uninformed reading on sites like this; I have not researched it myself to determine if they have actually pursued trademark violations over the iPhone name in the past). And not only do they do so this time, but they do so within hours of Apple's announcement. Little too anxious, but again that's not grounds for a dismissal, it just gives a little more credence to Apple's fair usage of the term as public domain.

C) This may all be very deliberate. Apple may have anticipated the lawsuit and hoped to use it for free advertising. It reminds me of Nintendo ignoring the obvious alternate interpretation of their Wii console, instead favoring the free advertising in the form of every night show host, blogger, and magazine editor or contributor who made a joke about the name. Think about it this way: Everyone who reads a newspaper article about this lawsuit hears that Apple, maker of the iPod, now has a phone with iPod functionality and a hell of a lot more. I don't know if Bosco's ballpark estimates are anywhere near reality, but even if they are I suspect that the increased sales from the publicity of the lawsuit could easily lead them to write off all legal expenses as advertising expenses.

How much is a Superbowl ad these days?

- Jon

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Brutno said:

member since 28 Aug 2002 with 198 posts, unranked, send him a message or view his profile

Fri Jan 12, 2007 9:13 am

Guest wrote:
I am thinking that Apple and Cisco had an agreement of some sorts, but when the Apple iPhone started get a lot of buzz then Cisco wanted more money. Edison Carter

Agreed. I also think Cisco tried to stare down Apple, more specifically - Steve himself, on the eve of MacWorld. The only problem is - Steve doesn't blink. If an agreement is not forthcoming Cisco will be challenged to prove that they actually did something with the name (last month's rush to market is a weak argument) and defended their trademark in the past. (Not much there either.) That, or drop the suit altogether, which doesn't help Cisco, as Apple has the mindshare on the name iPhone. So there is perhaps more pressure on Cisco than initially thought. I think Apple knows that as well.

Watch for the negotiation to proceed, money to exchange hands, perhaps a parts or technology agreement, and for Apple to come out better in the end - just like in the Creative settlement.

The secret to winning any negotiation is to know as much about your opponent as possible - without him realizing it. It helps you understand his negotiating steps and tactics, and helps you steer the process. I think Steve knows more about Cisco than Cisco knows about Steve. It makes for seemingly cheeky moves, like announcing the name iPhone without a formal agreement in place, but it also gives you a leg up in the negotiations.

There's another twist to this:

http://www.thestreet.com/_yahoo/markets/activetraderupdate/10332081.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

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brett_x said:

member since 24 Jan 2006 with 322 posts, unranked, send him a message or view his profile

Fri Jan 12, 2007 11:01 am

Bosco wrote:
You get the feeling that if Steve Jobs walked into a bank with a gun, shot and killed a teller, crapped on the floor, and broke into the vault that the peanut gallery would think a judge would let him off and tell the bank that he saved them the cost of the teller's retirement, saved someone 10 minutes opening the vault, and left something valuable they could sell on eBay.

Seriously, Bosco... your best post ever. IMO, you're right on this one.

What are trademarks for? I think Apple dropped the ball on this one and they want public opinion to pick up the pieces.

Either that, or both Apple and Cisco want to draw this out to get more headlines for BOTH companies. If this all works out amicably in the end, that was likely the case.

And people think the iPod is Apple's best "media player"

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Sat Jan 13, 2007 2:39 am

Guest wrote:
"She also noted that companies other than Cisco and Apple have used the iPhone name for voice-over IP products, although she didn't state any of them, and a cursory Internet search did not turn them up."

Apparently a very cursory search...#5 on the list under Google ---. "iphone voip"

http://www.orate.co.uk/Voip/iPhone.html

There's another iPhone company offering VOIP. It will be interesting to see just what Cisco's trademark covers.

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A guest said: (hide)

Mon Jan 15, 2007 4:20 pm

The iPhone link is to a VOIP Service, not a physical product titled "iPhone".

Apple managed to notice trademarks when they changed AppleTV from iTV.

BTW, respelling doesn't matter.

It may come out that Apple has itself on firm footing, but I expect that Apple will eventually just settle this for cash. They decided that part of the cost of this product would be the cost of getting the name from Cisco because the iPhone is the best name for the product, because they don't want to refer to Mac or Apple since that is still a non-starter for most of the world (yes. really. don't argue, just nod in a superior fashion). They want this tied in the mind to the iPod.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Mon Jan 15, 2007 6:03 pm

Anonymous wrote:
The iPhone link is to a VOIP Service, not a physical product titled "iPhone".

Apple managed to notice trademarks when they changed AppleTV from iTV.

BTW, respelling doesn't matter.

It may come out that Apple has itself on firm footing, but I expect that Apple will eventually just settle this for cash. They decided that part of the cost of this product would be the cost of getting the name from Cisco because the iPhone is the best name for the product, because they don't want to refer to Mac or Apple since that is still a non-starter for most of the world (yes. really. don't argue, just nod in a superior fashion). They want this tied in the mind to the iPod.

There are two physical products called "iPhone," besides that by Linksys, being sold in the US. One is by Comwave, the other by Teledex. Both involve VOIP. The US market is the only one that matters in this case, as that's the only country where Cisco has the trademark. Apple owns or has applied for the "iPhone" trademark in a lot of other countries.

Check other discussions on this topic here on TMO.

If you have not been following the brouhaha, Cisco claims that they don't want money: they want "interoperability" with Apple's phone, whatever the heck that means.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Wed Jan 17, 2007 9:01 am

Update: Check this post by a real trademark attorney for an interesting development. In short, Cisco had to prove by November 19, 2005 that they were using the trademark. They didn't. The law (15 USC 1058) gives a 6-month grace period, though. Cisco filed an affidavit just before that date. (Early May, 2006) However, the photo may have been of an empty box, as the product was not announced until December 18, 2006. Apple apparently formed a company, Ocean Telecom Services, in Delaware (pretty common) which filed several applications for the iPhone trademark, the first as early as September, 2006. So, Apple may petition the US Patent and Trademark Office to cancel Cisco's trademark, which will make Cisco's lawsuit moot. (Another company, Teledex, applied for the iPhone trademark in 2005. That may have been too early, though. I'm NOT an attorney!)

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A guest said: (hide)

Sat Jan 20, 2007 4:45 pm

Nice link, looks like according to all that, Cisco is in still holding all the chips.

If Apple can argue that Cisco failed to defend the trademark until it launched the new iPhones in 2006, it could possibly convince a judge that Cisco abandoned the trademark, Stanton said. Cisco has said that it used the iPhone trademark on VoIP phones sold in early 2006, and maintains that is has actively defended its trademark. "We have taken all actions necessary to satisfy all elements to prove the validity of our trademark under trademark law," a Cisco spokesman said.

However, settlement is the most likely outcome of this dispute, given the burden of proof on Apple needed to overcome Cisco's trademark registration, the lawyers said. "Even big companies get legal fatigue," Radack said.

Now some quotes from your link...

"[T]he USPTO gives you an extra six months grace period, if you pay an extra fee. This grace period would have expired 5/16/2006. Cisco filed a Declaration of Use on 5/4/2006 which kept their registration active."

What Apple has to do is try to argue this point ...

"It is possible that the Declaration of Use is defective, as there was no continuous use, and the sample that Cisco submitted was for a product not released until 7 months later."

Again, the burden of proof is all on Apple's shoulders, not Cisco's. Hence the previous analysis which said this is likely to end in a settlement. Cisco has the trademark and filed a Declaration of Use within the proper time limits. It's a very high bar for Apple to clear. Even assuming that the Declaration of Use is defective, that STILL does not put Apple in the clear.

"Without the registration, Cisco and Apple would still have a trademark dispute to resolve, but Cisco will have a harder time proving that it has valid trademark rights."

Cisco doesn't have to prove its declaration was not defective, the declaration is on file and was already accepted by the USPTO. Apple needs to prove that the declaration was defective. That's what is meant by the burden of proof being on Apple's shoulders.

Cisco does not have to show that its trademark is valid, that's what the documents already do. Cisco needs to show that Apple's use of the term iPhone is infringing upon that trademark. Apple is the one must either show, a) that its use of iPhone is not an infringment upon Cisco's rights as the holder of that trademark (just as it was not an infringment upon the shoe company's trademark when Apple used iMac), or b) that Cisco's trademark which is on record and up-to-date is not valid (they can try do that by arguing the declaration was defective).

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