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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

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reflection 12/5/2012 | 3:16:43 PM
re: Cisco Files iPhone Suit Apple follows its CEO...both are obnoxious. You can't use someone else's trademark without permission and act like it's okay. That's stealing.
prs6str 12/5/2012 | 3:16:42 PM
re: Cisco Files iPhone Suit It is pretty silly what they did. I'm surprised people haven't come down on Cisco even though they have every right to protect their brand. I would have assumed the average person would think Apple had some innate right to iEverything.
Pete Baldwin 12/5/2012 | 3:16:41 PM
re: Cisco Files iPhone Suit I'm sure you've all checked already, but ... yeah, it's taken, by something calling itself The Internet Phone Company.
Peter Heywood 12/5/2012 | 3:16:41 PM
re: Cisco Files iPhone Suit http://blogs.cisco.com/news/20...
jepovic 12/5/2012 | 3:16:40 PM
re: Cisco Files iPhone Suit If this is as bad as it seems, it truly is a mistake of historical proportions. It's a huge launch, they knew about Cisco's IPhone and even began negotiations. Still they went ahead, amazing! I can't think of anything like this.

Cisco's position has improved immensly now. There's no way they could lose this in court, and they could hurt Apple in so many ways. Whatever Cisco wanted before, the price just increased a thousand times. Before, Apple had the option to go with another brand name, but what now?
strungup 12/5/2012 | 3:16:39 PM
re: Cisco Files iPhone Suit Imho, Apple is using this for publicity, but will officially release the product with a-Phone or similar naming. Think about it, they iphone has already generated the necessary hype, and everyone's expecting that the final product will be renamed.

Cisco gets nothing significant from the lawsuit as no revenue has been shipped. A simple name switch later will not impact people's desire for the product.
palaeozoic 12/5/2012 | 3:16:39 PM
re: Cisco Files iPhone Suit
Cisco may be on the more (but not completely) solid legal ground and, probably, would prevail if it went all the way to trial. But from a market standpoint, Apple crushed them this week. Apple's iPhone is light years more advanced than Cisco's and will, imho, become a tour de force in the phone/pda/music player market. If Cisco succeeds in preventing Apple from using the trademark, all they would have accomplished would be to kill the trademark because Cisco's iPhone faces no such market prospects.
^Eagle^ 12/5/2012 | 3:16:39 PM
re: Cisco Files iPhone Suit if the phone works as advertised, it will not matter what the "name is". Apple could simply call it "the" phone and we would buy it, or call it MacPhone, or call it Apple xyz and we would buy it.

I would be a slow down in name recognition for a quarter or two and raise apples advertising costs as the rolled out an advertising campaign saying in effect... "whoops, we are bad and made a mistake.... but WOW, isn't this phone cool!" If I can access corporate outlook email via Wifi, and via Edge, along with access to IM, personal email, and run some rudimentary tools like Palm or Blackberry regarding opening Microsoft attachments.. with a web broswer, "ipod" inside, etc. Well my point is that even if apple is forced to abandon "iphone" this will only be a small set back. Branding is something apple does well, and they could easily figure out another angle.

the proof will be in how well the phone works as advertised. And if I can truly transition easily from a wifi environment to a cellular environment and back. This would be a big step in making a universal access device.

who knows, maybe they would call it the podphone or some other made up name.

After all, how many of us knew "ipod" or "macintosh" as a brand. didn't take long for ipod to become part of the lexicon.

Hahaha, or Cisco sees the benefit in making it easy for iphone to enteroperate over wifi, realize they will sell a LOT more wifi boxes from linksys, both into enterprise, to starbucks and to homes or small offices.. and decide to give Apple the darned liscence for song.

the more successful Apple is with this phone, the more cisco gear gets sold to route IP around.

just my two cents.

Cisco is jousting. And may well get a pound of flesh from Apple, but if they win the suit, my guess in the long run it will hurt cisco far more than the gains they get from lawsuit. Cisco would be better off ENABLING the iphone with free liscence to some subset of IOS... more iphones sold, more pull for cisco.

sailboat
jepovic 12/5/2012 | 3:16:39 PM
re: Cisco Files iPhone Suit Of course, the fact that they had started negotiations and even had an offer from Cisco will not exactly improve their legal position.
deanfro 12/5/2012 | 3:16:38 PM
re: Cisco Files iPhone Suit Prevailing may be relative. Apple will likely, unless they get a favorable license, just rebrand it the iPod Phone. I am not sure what Cisco would get out of any special interop with a niche handset, especially if you are talking the Linksys brand. Doing a lot of R&D for a device that is only GPRS/EDGE today, and will only be a fraction of the handsets in an office doesnt sound to wise to me. If Cisco and Apple choose to either fight or spend I think Nokia, MOTO, LG and Samsung will enjoy them getting distracted.
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