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Cisco Files iPhone Suit

Releasing a major downpour on Steve Jobs's iPhone parade, Cisco Systems Inc. (Nasdaq: CSCO) said late today that it has filed suit against Apple Inc. (Nasdaq: AAPL) for trademark infringement for use of the "iPhone" brand.

Cisco has owned the iPhone marque since it acquired Infogear in 2000 as part of its Linksys division. Infogear originally filed for the trademark on March 20, 1996, according to Cisco.

Linksys began shipping a new line of iPhone products early in 2006 and announced an expanded series of iPhone products in mid-December, just three weeks before the splashy debut of Apple's iPhone yesterday at the Macworld expo in San Francisco. (See You Say iPhone, I Say...?)

Loath to believe that Apple would go forward with the iPhone launch without owning the trademark, most observers assumed that some kind of licensing agreement had already been reached between the two California computing powerhouses. That proved not to be the case; after Jobs's presentation at Macworld on Tuesday, Cisco released a terse, 65-word statement saying that Apple had made "numerous requests for permission to use Cisco's iPhone trademark over the past several years" and that recent discussions between the companies had been "extensive."

"We expect to receive a signed agreement today," the statement concluded. Obviously that hasn't happened.

"I was surprised and disappointed when Apple decided to go ahead and announce their new product with our trademarked name without reaching an agreement," wrote Mark Chandler, Cisco's general counsel, in a blog entry Wednesday evening. "It was essentially the equivalent of 'we’re too busy.' Despite being very close to an agreement, we had no substantive communication from Apple after 8 p.m. Monday, including after their launch, when we made it clear we expected closure."

The reasons for the suit, Chandler adds, have nothing to do with royalties on Apple's iPhone sales, or with an exchange for Cisco products and services:

"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."

Instead of collaboration, the two companies now face litigation. The suit was filed in U.S. District Court for the Northern District of California. Cisco's statement said the networking giant is "seeking injunctive relief to prevent Apple from copying Cisco's iPhone trademark" -- meaning that, if the suit is successful, Apple could not sell the new phone without reaching some kind of deal with Cisco.

The hotly anticipated Apple iPhone combines iPod music storage and playback capability with smartphone technology in a slim, large-screen device. Sold exclusively through Cingular, it is scheduled to become available in June. (See Apple Makes iPhone Call.)

That means that there's still plenty of time for the two companies to reach an accord. Cisco, apparently, is taking every available avenue to ensure that happens.

Neither Cisco officials nor representatives from Apple have yet responded to requests for comment on the suit.

— Richard Martin, Senior Editor, Unstrung

jearnhar 12/5/2012 | 3:16:42 PM
re: Cisco Files iPhone Suit For more information and flavor on this suit and why we had to move forward, please view our SVP and General Counsel Mark Chandler's blog entry at: http://blogs.cisco.com/news/20...

He states, in part, "this is not a suit against AppleGÇÖs innovation, their modern design, or their cool phone. It is not a suit about money or royalties. This is a suit about trademark infringement."

Apologies to Unstrung for not getting back to you sooner on this issue.
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