Two ways Apple can avoid iPhone lawsuit payouts

apple-iphone.pngApple launched the iPhone without first clearing the intellectual property rights. That’s hubris of the first order. But there’s still two ways they can avoid paying legal fees in Cisco’s ensuing lawsuit.

  1. It’s not an iPhone, it’s an Apple iPhone
    See the image at the top right of this post? That’s new on Apple’s site as of today … it wasn’t there yesterday. Yesterday it was just iPhone … no Apple logo in front of the name. What Apple can claim is that the product is an Apple iPhone … not just an iPhone. As such, the iPhone trademark may not apply. Hrm …

  2. Yes we’ll pay, but not as much as you want
    Apple may just be dragging their feet on the contract … they’re willing to sign, but not at the price Cisco wants. So this may just be a tactic to reduce the price a little … maybe by the same amount as an extensive and long trademark defense court battle? Maybe …

But pay Apple will, of that there is no doubt. Either in licensing fees or legal.

[tags] iphone, trademark, apple, cisco, john koetsier [/tags]


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11 CommentsLeave a comment

  • As I said over on another blog, it’s really a shame that Apple didn’t resolve the issue sooner. However, I never thought about the “cost reduction” tactic – interested thought indeed.

  • I also wondered whether this might simply be Cisco protecting it’s trademark. Since nothing was signed before Apple announced it’s iPhone, they need to file the lawsuit to prevent someone else coming along claiming Cisco gave up their right to the trademark since they failed to take action when Apple used it without an agreement in place.

    Of course, they don’t even let me play a lawyer on *tv*, so no idea how true this might be. I do hope it doesn’t affect the stock price however, as the shares I purchased last Thursday have been treating me very well so far 🙂

  • Interesting…Cisco did nothing prior to Apple’s announcement to protect its trademark. All reports about what Apple was creating has been referred to as iPhone for at least a year now. It seems to me that Cisco lost the right to use the trademark beacuse it had become associated with Apple. It is similar to brands like Xerox or Kleenex becoming generalized, forcing the lost of the brand – that’s why they fight to protect them. This will be an interesting thing to watch.

  • Call it the Apple iFone or a iPodphone to avoid problems.
    It’s the product that counts and the world will get used to the name as it did with the iPod.

  • Apple’s been talking with Cisco for years as Apple established iPhone trademarks overseas. Cisco brought their “phone” to market just to ensure leverage in this dispute trying to force Apple to use their wi-fi technology, ensuring their hardware sales in the future. Apple should have established a trademark of “i” in front of whatever is associated with it.

  • Tom Gibson is right. Go to eBay and search for iPhone. You will find more iPhone-ish domain names for sale than you will phones.

    How many of you bloggers writing about the iPhone for the last few years ever received a cease and desist letter from Cisco legal? Were you writing about Cisco’s VoIP product, or were you causing confusion in the marketplace? Even major publications like Time, the WSJ, the NYT, and USA Today have used the term iPhone – many, many, times over a long period of time. Did Cisco ever say, “Please, don’t – or else.”? I don’t think so.

    Now, the first time iPhone comes out of Steve Jobs mouth, Cisco sues, and you wonder why St. Pepper was playing in the background when he said it.

  • First of all, the trademark dispute isn’t about money. Cisco is not trying to obtain money from Apple, therefore Apple can’t resolve this matter with a simple monetary payout. Rather, Cisco wants Apple to open up the iPhone product so all Cisco’s products will work with it (which ultimately would be more valuable to them than any dollar amount). It’s no wonder Apple refused, I would too. Cisco’s crazy. What they’re asking for is the equivalent of someone asking Apple to open up it’s MacOS X operating system so any generic Windows box could run Mac OS X instead of just Macs. It’s no wonder Steve refused. Cisco’s crazy. They’re asking Apple to give away the farm.

    Secondly, and something I haven’t heard mentioned, there’s a part of trademark law that allows trademarks to be granted based on a naming series – like iPod, iMac, iPhoto, iMovie, iTunes, iPhone – are all a part of the same naming series. Apple has been using these type names for years (and with no protest from Cisco if they owned the iPhone trademark). Therefore, this does grant Apple a certain amount of rights to be able to continue naming new products along the same naming series. However, whether Apple’s right to continue the series is sufficent to overcome Cisco’s specific rights remain to be seen.

    Finally, one of the most commonly misunderstood things about trademark law is that unlike a copyright, a trademark cannot be achieved by simply filing a form with the trademark office stating you want to trademark a particular name or word. And even if the trademark office does grant you some paperwork stating you have the mark, your rights to the mark are still tenous at best. Rather a true trademark can “only” be achieved by actually selling and trading that named product in the marketplace and doing so until a certain level of “marketplace recongition” for that particular mark (and has associated it with your product) has been achieved. If you fail to do this and to achieve specific marketplace recognition for the mark, you can easily loose all rights to the mark despite any paperwork you may have.

    In other words, ask 100 people what they think of when someone mentions the word “iPhone” to them? If 60 people tell you they think of a telephone made by Apple, but only 3 people think of some kind of Cisco product, then Apple would have achieved more marketplace trademark recognition for that mark. And that is what the trademark office goes by when granting rights, not because you filed a form with them first. Read any book on trademark law, it’s all there in black and white.

  • Wait, wait, wait, the ‘iPhone’ name was taken long before the iPod even existed and Apple knew about it. Heck, the fact that Apple talked to Cisco years before the fact is pretty damning evidence that Apple knew what they were walking into. Besides, go check the US Patent and Trademark office before you go on about what one needs to prove is a trademark or not. At the end, take yourself to the USPTO and make a search for iPhone… it’s there, in black and white, who the Federal Government acknowledges as the owner of the trademark ‘iPhone’. Didn’t take me too long to find it in the register. By saying that no one recognizes the word ‘iPhone’ as a Cisco product is indefensible position to fight from. Apple’s argument will follow the line of narrowing the scope of Cisco’s trademark registry, even then, it’s a gonna be a tough sell.