Why Apple left Cisco at the altar

When I read this post on Cisco’s blog explaining what’s going on with the iPhone name from their perspective, it’s completely obvious why Apple didn’t do the deal: Cisco wanted not just a licensing agreement or the sale of a trademark but a business relationship … in a sense, Cisco wanted in:

Fundamentally we wanted an open approach. We hoped our products could interoperate in the future. In our view, the network provides the basis to make this happen—it provides the foundation of innovation that allows converged devices to deliver the services that consumers want. Our goal was to take that to the next level by facilitating collaboration with Apple.

(I’ve bolded the most revealing sentence in Cisco’s blog post.)

Interoperability is something Apple is very reluctant to do unless there are extreme benefits (e.g., RIM-style push email via Yahoo, world’s-best search/maps via Google) to the end user (and Apple).

And it’s hard to see how a mobile phone relationship with Cisco could have realistically provided any substantive business benefits for Apple.

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

12 CommentsLeave a comment

  • […] Here is Apple’s response to the Cisco trademark infringement action: “It’s silly. We’re the first company to use the iPhone name for a cell phone” There is a lot of discussion from bloggers about the iPhone trademark today. Paul Mooney: WHO’S YOUR DADDY STEVE JOBS? Pete Cashmore / Mashable!: Breaking: Apple Sued over iPhone Ian Douglas / Telegraph Blogs: Apple in a legal stew Larry Dignan / Between the Lines: Apple picks wrong fight with Cisco; misfires on iPhone trademark Paul Miller / Engadget Mobile: Cisco SVP Mark Chandler weighs in on iPhone debacle Scott McNulty / The Unofficial Apple Weblog: Cisco’s General Counsel blogs about the iPhone suit Apple Gazette: Cisco Lawyer is blogging about the Apple Lawsuit Paul Miller / Engadget: Cisco sues Apple for trademark infringement: ruh roh! Jason D. O’Grady / The Apple Core: Cisco blogs about the iPhone suit Allen Stern / CenterNetworks: Grudgematch: Cisco sues Apple over iPhone trademark Tknuewer / Indiskretion Ehrensache: Apple vs. Cisco = Muster für Nachrichten in Weblogs Paul Kedrosky’s Infectious Greed: Cisco Comments on Apple-Suit Blogstorm Geeknews / Geek News Central: How’s it Feel Apple to be Sued for Trademark Infringement John Koetsier / Sparkplug 9 >> bizhack: why apple left cisco at the altar 10jan07 Robert Scoble / Scobleizer: Cisco smacks back at Apple on its blog Dragos / @rgumente: Cisco versus Apple Joe Duck: Cisco to Apple – leggo of my iPhone! […]

  • John,

    I think you’ve nailed it. Cisco says, sweetly, “we weren’t asking for any money.” OK, but their price was still too high.

    On the other hand, how can one justify Apple simply sweeping in and appropriating someone else’s mark?

  • “On the other hand, how can one justify Apple simply sweeping in and appropriating someone else’s mark?”

    Well, there are other companies making an iPhone as well. You can find them on Amazon. The case can be made that not only is the iName associated with Apple but that the companies currently making iPhones picked that name precisely because it would be associated with Apple. Even if Apple winds up giving Cisco money the publicity will have been worth it.

  • As far as the Trademark if it has been use by other companies selling other producs with that name it may come down to how vigorously Linksys / Cisco DEFENDED their trademark, did they go after other companies using that name ? did they reach settlements with other companies ? If not a judge could ask if any average person could identify iPhone with Cisco. If they didn’t defend their copyright and knew others were using their trademarked name for 5 YEARS ! they could be out of luck.
    The Kleenex copyright case was a landmark case in that you have to prove you have taken resonable steps over time to protect your rights or you can lose them ! and it becomes a generic term.

  • From a legal perspective, Apple probably realized that “iPhone” is not a defendable trademark, so why not pay their lawyers, instead of Cisco, to secure it? Under trademark law, the “generic” part of a trademark is not protectible. The “phone” in iPhone” is generic when applied to an actual phone. “Apple” would be a generic term if applied to apples, but is a defendable mark when applied to unrelated products like computers. The law requires judges to eliminate the generic part of mark when comparing competing marks. Thats leaves the “i”, which has become generic itself in the Internet age. Notice that Apple protects “Pod”, not the “i” part.

    Cisco’s only hope is if the mark has acquired “secondary meaning”, through broad market recognition. Do a significant number of potential consumers associate the Cisco product with the term “iPhone”? Apple could easily argue the opposite – that the average potential consumer alreadys think “Apple” when they hear iPhone.

    Apple will like likely when win this one.

  • I’ve been a Mac user and Apple die hard for the last 25 years (I miss my old Mac SE) 😉 But Jobs is SO in the wrong on this one, and Cisco is in the right… no two ways about it.

    As for what you put in bold, it’s worth pointing out that Cisco has ALWAYS advoated for open standards, to support interoperability amongst high-tech vendors. It didn’t start with the negotiations with Apple over this product, and it certainly won’t end there either. Why? Because Cisco has always believed that open standards allow for true innovation in the marketplace.

    While on the topic of “openess”, many analysts are beginning to point out that probably the biggest flaw of the iPhone is closing out the product to 3rd party applications (outside of the few Apple distributes). Suddenly, the iPhone isn’t a platform, but just a cool phone. Guess I’m left to using SlingPlayer on my Treo 700p when the app. comes out shortly…

  • Personally, I don’t buy the posturing that Apple will freeze out 3rd party applications. I think they’re resorting to the old “Forbidden Fruit Close” technique beloved of tech salesmen of yore: “We’ve got a really great product we just released, but I don’t think your company is ready for it…”

    On another note, one of the regular commentators on my blog made some germane points this morning about Apple’s de facto usurpation of Cisco’s trademark, via pr rather than negotiations.


  • I asked you to help me two weeks ago you still haven’t given me a reply it’s okay i just really needed your help and you dident even bother to write me back or contact me when someone comes to you for your help you should at least listen to their problem and give them a reply i don’t want your help i’ll try to solve them on my own without your help i just really beleived that you helped people but it’s an act you put on for your show