Commentary from Mark Chandler, Cisco’s SVP and General Counsel, on Apple’s infringement of Cisco’s iPhone trademark:
Today’s announcement from Cisco regarding our suit with Apple over our iPhone trademark has spurred a lot of interesting questions. Most importantly, this is not a suit against Apple’s innovation, their modern design, or their cool phone. It is not a suit about money or royalties. This is a suit about trademark infringement.
Cisco owns the iPhone trademark. We have since 2000, when we bought a company called Infogear Technology, which had developed a product that combined web access and telephone. Infogear’s registrations for the mark date to 1996, before iMacs and iPods were even glimmers in Apple’s eye. We shipped and/or supported that iPhone product for years. We have been shipping new, updated iPhone products since last spring, and had a formal launch late last year. Apple knows this; they approached us about the iPhone trademark as far back as 2001, and have approached us several times over the past year.
For the last few weeks, we have been in serious discussions with Apple over how the two companies could work together and share the iPhone trademark. We genuinely believed that we were going to be able to reach an agreement and Apple’s communications with us suggested they supported that goal. We negotiated in good faith with every intention to reach a reasonable agreement with Apple by which we would share the iPhone brand.
So, I was surprised and disappointed when Apple decided to go ahead and announce their new product with our trademarked name without reaching an agreement. 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 8pm Monday, including after their launch, when we made clear we expected closure. What were the issues at the table that kept us from an agreement? Was it money? No. Was it a royalty on every Apple phone? No. Was it an exchange for Cisco products or services? No.
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. And we wanted to make sure to differentiate the brands in a way that could work for both companies and not confuse people, since our products combine both web access and voice telephony. That’s it. Openness and clarity.
At MacWorld, Apple discussed the patents pending on their new phone technology. They clearly seem to value intellectual property. If the tables were turned, do you think Apple would allow someone to blatantly infringe on their rights? How would Apple react if someone launched a product called iPod but claimed it was ok to use the name because it used a different video format? Would that be ok? We know the answer – Apple is a very aggressive enforcer of their trademark rights. And that needs to be a two-way street.
This lawsuit is about Cisco’s obligation to protect its trademark in the face of a willful violation. Our goal was collaboration. The action we have taken today is about not using people’s property without permission.
Cisco’s Press Release on this issue is here: http://newsroom.cisco.com/dlls/2007/corp_011007.html
So Cisco tried to leverage their way into a Very Good Thing™ and got spurned. That’s their side of the story, at least. If so, Cisco is having a silly hissy fit in public. Whatever.
Related articles:
Apple calls Cisco’s ‘iPhone’ trademark lawsuit ‘silly,’ says ‘very confident we’ll prevail’ – January 11, 2007
Cisco sues Apple for ‘iPhone’ trademark infringement – January 10, 2007
The only thing really wrong with Apple’s iPhone is its name – January 09, 2007
Briefly: Apple changes corporate name; Cisco expects agreement on ‘iPhone’ trademark today – January 09, 2007
Apple debuts iPhone: touchscreen mobile phone + widescreen iPod + Internet communicator – January 09, 2007
There has been no trademark infringement yet. However, once the product is sold then that will be true.
At this point I sounds like CISCO wanted more than what they are announcing. In fact their statement is not as “clear” and “open” as they say. The details of the negotiation will need to be seen before any side is accused. At the same time, Apple should have not taken such a risk at and launch a product and loose its reputation for a “silly” remark by CISCO. This case will settle without any long-term effect on either side.
I think Cisco is on the right side on this one. Worst case for Apple is that they have to change the name some time in the next six months. Best case is Apple and Cisco work something out.
IMHO, this isn’t a huge issue.
The public was anxiously waiting for Apple to introduce the iPhone. Cisco took advantage of that in December announcing the long awaited iPhone. Apple knows that they had to introduce the iPhone and now that they have they can change the name to Apple Phone. I don’t think that they would every be willing to dilute their product with Cisco’s. They have an evolutionary product and Cisco has an ordinary product. Sharing the iPhone name only dilutes what Apple has. The need exclusive rights to the name or a new name. I think that they will opt for a new name. Cisco may end up having to pay Apple’s legal costs for suing for something that doesn’t and may never exists.
I’m a huge fan of Apple, but I think Cisco have every right to be pissed at Steve for doing what they did.
Trademarks are Trademarks, no matter who you work for or what you design.
Come on Apple, be the man and sort this out.
Well that’s a very polite and open explanation for why they are trying to sue Apple. I’m quite impressed that its not some money-grabbing royalty thing.
I think that SJ might have wanted to capture everyone’s attention by announcing it as iPhone and have everyone remember its amazing UI and form factor. Then, come June, they will rename it to something like Apple Phone (to match the Apple TV convention), but yet everyone will still recognise it. If this is what they’re trying to do, and capitalise on the iPhone moniker, then its a very smart play. But I guess as usual with Apple, we’ll never know until it happens.
Personally, i think its far more apt to call it OSX Mobile or something else to express its myriad functions and capabilities. It really is a new platform for Apple.
I dunno. Sure Cisco has the trademark but they tried to leverage it for more than it is worth and the name iPhone is relatively worthless to them and even THAT will become even more when Apple’s phone actually comes out.
Apple does not want to sleep with you Cisco. They just want a minor thing and you got greedy. Bad call. I guess I am with Steve on this (assuming of course that he offered some substantial cash for it).
It seems Apple may have a stronger case than at first appears, or than I first thought.
http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm
In order to serve as a trademark, a mark must be distinctive — that is, it must be capable of identifying the source of a particular good.
iPhone sounds like the source is Apple.
———–
Thus, for descriptive marks, there may be a period after the initial use of the mark in commerce and before it acquires secondary meaning, during which it is not entitled to trademark protection. Once it has achieved secondary meaning, trademark protection kicks in.
Apparently there are four iPhones out there, somewhere, but I hadn’t heard of them till Cisco’s a few weeks ago.
———–
The rights to a trademark can be lost through abandonment, improper licensing or assignment, or genericity. A trademark is abandoned when its use is discontinued with an intent not to resume its use. Such intent can be inferred from the circumstances. Moreover, non-use for three consecutive years is prima facie evidence of abandonment.
Did Cisco abandon or squat, maybe not literally as they had an iPhone product (how many did they sell) but in effect?
———–
Trademark rights can also be lost through genericity. Sometimes, trademarks that are originally distinctive can become generic over time, thereby losing its trademark protection.
Apparently adding an ‘e’ to a word (eg ecommerce) and calling that distinctive enough for a trademark is not upheld.
———–
If a party owns the rights to a particular trademark, that party can sue subsequent parties for trademark infringement. 15 U.S.C. §§ 1114, 1125. The standard is “likelihood of confusion.” To be more specific, the use of a trademark in connection with the sale of a good constitutes infringement if it is likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods. In deciding whether consumers are likely to be confused, the courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; (7) the defendant’s intent.
Apple wins 1, 4, 5, and 7.
There are some other potential loopholes (looking through lawyers eyes!) too.
There are some good comments here too:
http://blogs.wsj.com/law/2007/01/10/ilawsuit/
Call it something else.
It’s more than a phone anyway – and needs to differentiate itself on that level.
Yes, Cisco is correct and if they didn’t have an agreement but……are they freak’n nuts? If in 6 months when it actually comes out you have a case, now you really don’t. Six months from now when all the boxes, advertising and such is completed, then you have leverage. Idiots.
It’s just sabre rattling at this point from both sides. It doesn’t change the fact that Cisco’s version of an iPhone is lame as hell, while Apple’s is revolutionary.
Who cares what it’s named in the end, Apple clearly has a winner on their hands and Cisco has a phone that virtually nobody is going to buy. Cisco would just like a piece of Apple’s action for free, that’s all.
This naming controversy will all blow over soon enough, it’s certainly not a big deal at all and it has no real impact on the product itself.
iPhone is a lousy name for the device, so Apple should come up with something better. Perhaps even iPod phone, since “iPod” suggests something of more general purpose, which this thing definitely is.
And yeah, MDN, Cisco is 100% in the right here. Apple is flexing it’s muscle, and Cisco has every right to defend its intellectual property. So stop defending the indefensible. I swear…if Apple decided to gas half of San Francisco, you’d probably back them on it.
I like how people are calling Cisco greedy when it is Apple that’s trying to steal.
While I do believe that Cisco’s case is legitimate, I didn’t even KNOW Cisco made a phone named iPhone until they annouced their new model a few weeks back. They should be thanking Apple for the free press!!!
@Bryan – who says LG isn’t the manufacturer for the Apple iPhone? I haven’t heard anything either way on who’s manufacturing it.
And asking for an “open approach” from Apple is as natural as pooping out of your mouth. Everyone knows full well that Apple uses a closed system for their products, so it’s foolish of Cisco to think they could somehow weasel their way in just because they have a marginally similar product with the same name. And they interoperate anyway, they’re phones!!!
Apple should settle w/Cisco and purchase a license to use the name. That’s it. None of this open approach interoperability nonsense.
I can’t believe that SJ would be this stupid. I have a feeling something is missing here…
facts:
MDN was, is, and will be childish
CISCO owns the name iphone
Apple’s phone will always be known as iPhone
Jobs knows this well, and intended the media hoopla to branded for him. regardeless of trademark.
CISCO will not get anything from Apple.
MDN will continue its behaviour of onesideness
It’s a good thing that none of you so called goody-goody fools that post here run Apple. Nothing would ever get done. Sometimes when you do actual business in the real world, you have to do some things that fall into gray areas to get anything of note accomplished.
The real business world is cut throat, not some socialist utopia (unless you’re in certain parts of Europe or in China). That’s something you obviously will not ever understand though. I’m sure Steve Jobs doesn’t give a rat’s ass if you like his tactics or not either.
Cisco’s statement sounds nice but as the lawyers are explaining there are other considerations to trademarks. I’m sure we are not getting the full story from either side.
iphone.com does not link to Cisco — why have they not enforced their use of the trademark with respect to that domain registration? I’m certain Apple’s lawyers have reviewed this in great detail for the last 5 years.
And finally, if Cisco waited until the product arrived people would be saying they should have sued when the product was announced — before all the expense of packaging, marketing and such. If they are going to sue, now is the correct time.
I’m a big Apple fan but I hope they don’t look back at the inter-operability proposal Cisco has offered them and rue the day they cut off their nose to spite their face?
Cisco’s position sounds reasonable – but I’m also of a mind that this is not the open and shut case its being made out to be.
1) Apple is not the only one infringing upon Cisco’s apperent intellectual property.
2) Its clear that, since Apple’s iPhone is in no small part a protable and powerful networking device, that Cisco believes that they should automatically get their name pinned on the product right along side of Apple’s, just because…
If Apple has done a bad thing, then let them pay the price and get on with what Apple does best, but there better be a clear precedent and obviously good cause or the courts are going to see this as just what it looks like to me – bogus corporate jealousy.
My thoughts:
1) Cisco owns the trademark.
2) With the iPhone trademark, Cisco tried to play hardball with Apple
3) Apple wrongfully used the trademark without Cisco’s permission AND rightfully did not agree to play hardball with Cisco.
4) Result: Apple gets the bang for announcing the long awaited “iPhone” When it finally is released, it WILL have a different name.
5) The lawsuit is dismissed because no “real” product was released that violated the trademark.
@RC…cripes chill out. People here aren’t wrong. Cisco owns the trademark. Apple knows it can get the name for a variety or legal reasons especially well pointed out by Gandalf above.
The iPhone and Apple association has been out for awhile. Cisco did nothing,. Their hold on it is tenuous at best. Their protection of it was non-exsistent. Judges seriously take into account intention,,,ergo, Ciso loses here!
nuff said!
MacDailyNews, are you guys a bunch of 1st graders? I can’t believe some of the stupid sh** you say in your MacDailyNews takes. Cisco is 100% right and 100% legally right and 100% reasonable — and you guys are saying that they’re having a hissy fit?
Grow up, MacDailyNews.
Cisco is right. Apple is wrong. And you guys are wrong. How old are you guys anyways? A bunch of 8-year-olds running this site?
They were surprised that Apple went ahead with the announcement? Are they retarded? What are they going to do, cancel MacWorld? hahahahhahahha
Give me a freaking break – they are just jealous because tech stocks used to be weighed on how well Cisco was doing, now it is based on how well AAPL is doing. Nobody cares Cisco – they also didn’t care when you released your iPhone (embarassing).
RC
Any relation to Ebenezer Scrooge? You must have missed out on the beginning of Apple history. Who’s your boss? We want to tell him you’re returning the bonus and will start working for free ’cause you’re glad to have a job. : )
I’ll jump on the bandwagon for Apple coming up with a different name for this device that is so more than a phone. iPhone undersells this magnificent piece of technology!
That said, we don’t know what Apple’s “big picture” goals are. Maybe there will be versions coming that are NOT “so much more than a phone” for example.