But what will their trademark agreement actually mean?

February 22, 2007

3 Min Read
Cisco, Apple Make Nice

The resolution of the trademark dispute over the "iPhone" name between Apple Inc. (Nasdaq: AAPL) and Cisco Systems Inc. (Nasdaq: CSCO) raises intriguing possibilities for future cooperation between the two Silicon Valley icons, but both companies are remaining tight-lipped about what form they might take.

Late yesterday the companies said in a joint statement that Cisco will drop the lawsuit it filed on Jan. 10, alleging trademark infringement against Apple. The suit was filed the day after Steve Jobs debuted the hotly anticipated new iPhone at the MacWorld expo in San Francisco. According to the statement, "Under the agreement, both companies are free to use the 'iPhone' trademark on their products throughout the world."

The interesting part of the release, though, is the sentence that says, "In addition, Cisco and Apple will explore opportunities for interoperability in the areas of security, and consumer and enterprise communications."

That is a clear nod to Cisco CEO John Chambers' assertion, after the suit was filed, that he was not interested in squeezing Apple for royalties, or in blocking sales of the Apple version of the iPhone, but in developing avenues for collaboration between the networking giant and Apple, which has purposely kept its family of products inside a tightly knit web of interoperability.

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-Dec., just three weeks before the splashy debut of Apple's iPhone. (See You Say iPhone, I Say...?)

Incredulous 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 Calif. computing powerhouses. That proved not to be the case, and after Jobs' presentation at Macworld, 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."

The 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 at a price of $499. (See Apple Makes iPhone Call.)

Though it still makes the bulk of its revenues through enterprise networking equipment like switches and routers, Cisco has trumpeted its aims to break into consumer markets like the home-networking arena. An alliance of some kind would make that thrust much more feasible. (See Cisco Eyes Home Base.)

One possibility might be a Linksys-branded device that could be used to upload content automatically to iTunes -- content that in turn could be played back on an iPod or an iPhone.

A link to Cisco's networking gear could also make the Apple iPhone a more appealing device for enterprise IT managers.

In any event, it's clear that Cisco wants to use its iPhone trademark to get some of the Apple consumer-marketing magic to rub off on Cisco's relatively staid business.

— Richard Martin, Senior Editor, Unstrung

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