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Apple Exec Claims Cisco "iPhone" Trademark Lawsuit is Silly

Thursday, January 18th, 2007 at 1:15 PM - by

During Apple's FY 07 1Q Earnings Conference Call on Wednesday, Apple COO Tim Cook was asked about the Cisco lawsuit over the "iPhone" trademark. He described it as "silly."

Mr. Kevin Hunt of Thomas Weisel Partners asked Mr. Cook to comment on the Cisco lawsuit. He was specifically concerned about whether the litigation would affect Apple's ability to ship the mobile phone in June as planned.

"We think the Cisco trademark lawsuit is silly," Mr. Cook responded, "as we've said before. There are already several companies that use the name iPhone for voice over IP products, and we believe that Cisco's U.S. trademark registration is tenuous at best. We are the first company to ever use the iPhone name for a cell phone, and if Cisco wants to challenge us, we're confident we'll prevail."

In a previous story at TMO, the history of the term "iPhone" and Apple's own trademark attempts were described. At that time, a CNN Money analyst suggested that if Apple intends to use the strategy that they have a family of "iPhone" trademarks registered in many other countries, except the U.S., that that is "not a strong argument." Now the court will decide if it gets that far.

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A guest said: (hide)

Thu Jan 18, 2007 3:24 pm

Tim Cook's entire attitude is just silly. The only firms that have anything that says iPhone on it accept Cisco are Apple business fronts. Cisco came to the table in good faith only to find Apple had no intention of honoring their talks. This is a clear case of Apple being duplicitous and Apple should face stiff fines for intentionally violating Cisco's trademark with these foolish announcements of an iPhone.

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A guest said: (hide)

Thu Jan 18, 2007 3:36 pm

Linksys, which is the division of Cisco that sells their 'iPhone' line, is a completely unethical company, which treats sales of products as holy, focusing most of their efforts on finding cheaper ways to make their products (regardless of the shoddy results), and spending as little money as possible on providing customer service and technical support, no matter how many people complain bitterly. Trust me. I worked in the US technical support department, before Linksys laid off the most of it's few remaining qualified technicians.

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dhp said:

member since 22 May 2003 with 182 posts, unranked, send him a message or view his profile

Thu Jan 18, 2007 4:02 pm

Okay, guest number 2, but what does all that have to do with the merits of the lawsuit?

My response to Apple is: If it is so silly that Cisco objects to Apple's use of the trademark iPhone, why then did you bother trying to negotiate with them to use it? Just for kicks?

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A guest said: (hide)

Thu Jan 18, 2007 4:15 pm

dhp, do your research. The Cisco trademark is almost certainly invalid due to the period of time (over 5 years) during which they didn't use it. Cisco also didn't act in good faith as they rushed out a product with that name AFTER Apple approached them expressing interest in the Trademark. If you're going to argue then get your facts right. That's why Cisco is "silly" to file suit over this.

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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 18, 2007 5:15 pm

I agree with Guest #3. Apple only did the prudent thing: Apple saw the potential for litigation, and tried to negotiate to prevent it. More than likely, Cisco saw an opportunity, and tried to take unfair advantage of the situation. The Cisco lawsuit is most likely a bluff based on a very weak hand, and it looks like Apple has decided to call their bluff. I don’t always agree with Apple on litigation issues, like their suit against the bloggers, but in this instance i do and say: Go for it, Apple!

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A guest said: (hide)

Thu Jan 18, 2007 5:35 pm

"Tim Cook's entire attitude is just silly. The only firms that have anything that says iPhone on it accept Cisco are Apple business fronts. Cisco came to the table in good faith only to find Apple had no intention of honoring their talks. This is a clear case of Apple being duplicitous and Apple should face stiff fines for intentionally violating Cisco's trademark with these foolish announcements of an iPhone."

Clearly somebody who does not know very little about trademark. For what it is worth, the article does not know much either. Here is a lesson for you.

Apple is making several arguments and has a strategy. First, you do not own a trademark, like you would a copyright. Instead, you merely own the right to use mark provided you follow the rules. One of the rules is you must actually ship a product to keep the right. In the realm of trademark if you sit on a trademark for too long without shipping a product with it (something like five years), you abandon the right to use it. According to some news services Cisco tried to pull a fast one with the trademark office by faking a product they were shipping to prevent the trademark from expiring. Fact is Cisco's right to use iPhone is being challenged as being abandoned in the Trademark Office. Accordingly, it makes no sense to give Cisco anything substantial when the Trademark Office is considering revoking Cisco's right to use the mark. If it does that, Apple would have a claim to the right because it registered the rights before Cisco actually started shipping this product.

Second, Apple is arguing there are other products out there dealing with VOIP that use the iPhone mark. This again is a no no in trademark land. You see trademarks are all about avoiding customer confusion. TO keep a mark, a company must defend others from using the mark in conjunction with similar products. Cisco has not done this. Accordingly, Apple calls Cisco's claim tenuous at best.

Third, Apple probably will argue that the mark "iPhone" was created by Apple customers and the media to describe an Apple product they wished for. Apple started the whole "i" naming convention. Other companies using the mark, highjacked Apple's goodwill, which is also frowned upon in trademark land.

PS the forums let me sign in on Macobserver, but not iPodObserver.

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A guest said: (hide)

Thu Jan 18, 2007 5:36 pm

PS: Apple will not face stiff fines, as Cisco is only seeking an injunction and has not been damaged because Apple is not shipping a product using the name.

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nealg said:

member since 22 Mar 2006 with 123 posts, unranked, send him a message or view his profile

Thu Jan 18, 2007 8:02 pm

Guest number 1,

How do you know that Cisco came to the table in good faith? Because they said so? Maybe they did and maybe they didn't. Maybe Apple came to the table in good faith and maybe they didn't. It is amazing the assumptions that are made in order for people to back their opinions. To me, the fact that Cisco tried to fight this battle in the court of public opinion makes their claim suspect but that is just my opinion. The only fact that I think I know is that this will settle either in or out of court based on the legal arguments and the willingness of the two parties to avoid litigation.

Neal

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A guest said: (hide)

Thu Jan 18, 2007 9:37 pm

I think Apple ordering Cease and Desist against creators of themes for Pocket PC and Palm is a little more silly.

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A guest said: (hide)

Thu Jan 18, 2007 11:53 pm

Of course people think cease and desist orders are silly. Those are the same people that don't understand the trademark rules and think it's silly that Apple won't play Cisco's game. Apple is doing what Cisco should have done if Cisco truly had a physical iPhone before their tenous December 16th release, defending their property. The situation is exactly the same, and Apple is doing what Cisco should have been doing the last 5 years. Defending their property, ensuring there isn't confusion created by dilution of product branding. Brand dilution. Apple understands, and they go after people who are trying to dilute it. Cisco should understand this, but never went after anyone who tried to dilute their so called iPhone brand. Also, Cisco released a product WAY after Apple and Cisco started negotiating Apple's use of the iPhone trademark. Shame on Cisco.

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gslusher said:

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

Thu Jan 18, 2007 11:54 pm

Guest wrote:
I think Apple ordering Cease and Desist against creators of themes for Pocket PC and Palm is a little more silly.

No. They're defending copyrights. Copyrights are even more stringent than trademarks, as they don't refer to particular products. If the themes are copies, they are illegal. Period. It doesn't matter what our guest thinks.

Guest also apparently hasn't followed the developments in the Cisco vs Apple brouhaha:

- Cisco didn't use their trademark until December, 2006. Under the law, they had to use it by May, 2006 or lose it. They apparently filed a declaration that they were using the trademark to beat that deadline. However, it's not clear that the declaration will stand up, as they didn't release the product until 7 months later. (Perhaps worse, their "iPhone" may actually be a previous product that was just renamed.)

- There are, indeed, other companies using "iPhone" for both services and products for VOIP. At least one has been sold for over a year. Has Cisco gone after those?

It gets curiouser and curiouser.

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A guest said: (hide)

Fri Jan 19, 2007 2:17 am

How very ignorant of all of you. The US is not the only place in the world that issues Trademarks, if Apple have trademarks for 'iPhone' in other countries then they have every right to announce they are releasing an iPhone, the i probably stands for ignorant..

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A guest said: (hide)

Fri Jan 19, 2007 3:02 am

Guest wrote:
How very ignorant of all of you. The US is not the only place in the world that issues Trademarks, if Apple have trademarks for 'iPhone' in other countries then they have every right to announce they are releasing an iPhone, the i probably stands for ignorant..

We're discussing US trademarks and marketing, not International trademarks and marketing. Apple already has iPhone registered in Australia and a few other countries.

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gslusher said:

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

Fri Jan 19, 2007 4:11 am

Anonymous wrote:
How very ignorant of all of you. The US is not the only place in the world that issues Trademarks, if Apple have trademarks for 'iPhone' in other countries then they have every right to announce they are releasing an iPhone, the i probably stands for ignorant..

Alas, we're not the "ignorant" ones. Apple announced that the Apple phone will be sold initially in the US only. They've said that it will be avaialable in Europe and elsewhere later, maybe 2008. Thus, there is, indeed, a trademark dispute. Perhaps you should watch the keynote or at least the iPhone introduction and/or read some of the hundreds of articles, blogs, etc.

For what it's worth, the "iPhone" trademark is owned by other companies than Apple in some countries, like Canada. (I'm not sure about the UK, as there is a service there using the iPhone name.)

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A guest said: (hide)

Sat Jan 20, 2007 4:27 pm

Silly? Is that really the best the Apple legal department can come up with? This is ending in a settlement in favor of Cisco.

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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 20, 2007 9:20 pm

Anonymous wrote:
Silly? Is that really the best the Apple legal department can come up with? This is ending in a settlement in favor of Cisco.

Read the other discussion threads on this topic. It may not be quite as simple as Cisco makes it out to be. Apple may have a good argument that Cisco effectively abandoned the trademark. I don't want to go through the litany, again. Look it up in other discussions.

Also, since you must be an attorney (why else would you make such a definitive statement?), perhaps you can give us the benefit of your legal reasoning, once you have fully aquainted yourself with the facts and law.

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A guest said: (hide)

Sun Jan 21, 2007 11:21 am

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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