Cisco VP Explains Lawsuit Against Apple

Dekortage writes "The day after Apple announced its iPhone, Cisco sued over the name. Mark Chandler, Cisco's SVP and General Counsel, has posted an explanation of the suit on his blog: '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. ...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."' What did Cisco want? '[We] wanted an open approach. We hoped our products could interoperate in the future.'" Another reader wrote to mention that already, Cisco's trademark might be in trouble in Europe.

Comments

Find a better name

[superangrybrit]

2 years buys a lot of time to find a better name than some fisher price type naming. I thought Apple was an artistic company?

Re:Find a better name

[LKM]

The idea that Apple is any different than any corporate giant is laughable

The idea that all coporate giants are the same amount of evil just because they're corporate giants is at least equally laughable.

Cringely's opinion

[cgrayson]

Robert X. Cringely talks about this in his weekly post today. He points out that Apple already conceded the "i"-prefixed name from the iTV to Elgato, makers of the "EyeTV":

So Apple changed its marketing, diluting its whole "iThis" and "iThat" naming strategy in deference to Elgato, a company they could buy with a weekend's earnings from the iTunes Store, but chose to go toe-to-toe with Cisco, a company that's bigger, richer, and just as mean as Apple any day.

He says it all boils down to big publicity stunt, wherein Apple will get a big, free publicity boost when they finally back down and rename it the "Apple Phone". He also goes on to give his explanation for why the iPhone^H^H^H^H^H^HApple Phone won't support Cingular's 3G network.

Re:Cringely's opinion

[Anonymous Coward]

And you sound like a shrill fanboi.

Re:Cringely's opinion

[squiggleslash]

This is why geeks don't predict successes like the iPod. Sorry to pick on you, but you're just the last person to mention this.

The reason people subscribe to cellphone service is they want a phone that "just works". The number one complaint of users of mobile phone services is not that it's too expensive, it's that there are blackspots, and/or dropped calls. In the US, most plans are effectively unlimited - you're given unlimited nights and weekends, unlimited in-network calls, and a huge bucket of minutes to use for everything else, that you're never likely to use up. People might complain it's $50 rather than $25, but that's the cost anyway, regardless of how you try to work around it.

Even if we graft Skype onto cellphones, you're losing the "just works" aspect of it. Calls are dropped if you go out of range, so no walking around any great distances while using your Skype phone. Not unless you plan to subscribe to an unlimited data plan, and then... what are you using Skype for? Where's the cost benefit?

Mobile operators, in any case, are fixing the issues so you wouldn't have any advantage from such a system anyway. In particular, GSM operators are adopting GAN/UMA, which seamlessly causes the upper level GSM protocols to route themselves over 802.11 if there's a WLAN in range. So no dropped calls. While some operators may charge the earth for this, most are likely to simply drop airtime charges for calls routed this way. That's what T-Mobile USA is proposing, for instance.

The phone that doesn't work when you go out of range of a microcell was tried in the early nineties anyway. The technology CT2 was designed for that purpose. It was a flop. People didn't want it, even if it was cheaper than cellular. What they wanted was a phone that works everywhere. That works the same way everywhere.

Re:Cringely's opinion

[mkoenecke]

Yep, filing for that trademark in 1996 was a really desperate, last-ditch move, wasn't it?

Re:Cringely's opinion

[7Prime]

Never-the-less... standing up a date is an assholic thing to do. I've been pretty hurt by it a few times. Maybe you haven't, but it's not only hurtfull, but incredibly cowardly. What apple did, as much as I like them as a company, was very cowardly, and Cisco is just pointing that out. What are you suggesting, they "take it like a man?" if every company spouted that kind of machismo mantra, we'd never get anywhere.

The point is, it's good to see company's negotiate... which is why Apple dragged Google, Yahoo, and Cingular execs up on stage with them. Sure, it was a publicity stunt, but the execs wouldn't have agreed to be there if they didn't feel it was a good thing, which is a positive step. Suddenly hearing that while they cow-towted their negotiations with these companies, but totally stood up Cisco Sys, really puts a black eye on their whole "working together" mantra.

Cisco has a right to be pissed, and they have an equal right to complain.

I'm a huge apple fan, I'm writing this from an old titanium power book, and since buying it, I've only become a bigger and bigger fan of the company... but the iPhone has some really big problems, and while at first I was drooling over the thing, it's reception among the masses has been very confusing. It's being hailed as a great gadget that noone wants to buy. This thing reeks of a PS3-type mentality. I just wish there was some hope of them drastically making some alterations before June, but once Apple makes an announcement, they hardly ever back down... especially from something this huge.

what were they thinking

[frieked]

You seriously have to wonder what were they thinking when they named it the iPhone without an agreement in place. One can only speculate that they planned to change the name all along but they needed to get the news out there about it and this was the best way.
Apple has no chance if this does make it to court... The fact that they've been trying to license the name for years proves that they acknowledge Cisco's trademark as valid.

Re:what were they thinking

[kfg]

One can only speculate that they. . .

Thought they had a deal. A legitimate understanding through negotiations in good faith (and the courts will often uphold good faith agreements if you can prove they actually existed). But they were dorks overanxious to use to name at the Grand Ball (which Cisco knew and manipulated) and put themselves at the mercy of Cisco who can now be a dick about the whole thing.

If Apple had said "We haven't named it yet," everyone would have just called it the iPhone anyway and deluted Cisco's mark without any liability to Apple.

KFG

Re:what were they thinking

[dekemoose]

Cisco has no choice. If you fail to defend a trademark, you lose your claim to it. If they allowed Apple to proceed with their use of iPhone Apple would win by default.

Re:what were they thinking

[walt-sjc]

Cisco is not trademark squatting here, they registered in 96 and sell an iPhone product.

Sorry, but I don't buy that at all.

Cisco BOUGHT a company that had the iPhone trademark. Big difference.

Look at Cisco's product line when it comes to phones (include Linksys too.) It has daring names like: Cisco SIP Proxy Server, Cisco Voice Provisioning Tool, Cisco Unified IP Phone 7985G, Linksys One Business Phone, Linksys One Manager Phone, SPA962 IP Phone.

Notice that there is not ONE vanity name in that list. Cisco had 2 years prior knowledge that Apple was going to release a phone and call it "iPhone". 3 weeks before MacWorld after discussions had basically fallen apart they release an iPhone product???? Come ON. That's a blatant smack in the face. Cisco had had no intention of ever releasing an "iPhone" they did so to profit off the energy of Apple's product and piss off Apple. Apple would not have wanted any other "iPhone"'s in the market.

Not that Apple is all blameless either. They should have just accepted that they were not going to get "iPhone" and pick something else. Picking a battle with Cisco like this over something so petty is idiotic.

The truth about Apple

[The_Abortionist]

Suckling at Apple's dick might be a good way of getting a dose protein by many slashdotters. But it's hypocritical.

Apple is ALL ABOUT:

-DRM
-Proprietary hardware
-Proprietary software
-Closed protocols
-Lock-ins
-selected compatibility

And just about everything else relating to total control. It's CEO is also know for pulling tantrums.

If you prefer Apple because its one and only way fits well, that's fine. But please stop looking down others (Microsoft users, Linux, etc), because you're the inferior drones.

Re:The truth about Apple

[LoudMusic]

Yep. Yep yep. Yep. Yep yep yep.

You are correct.

But! Apple's products are simple and easy to use. They do what they're designed for. And they are elegant. In a lot of cases a Mac is the right tool for the job. It does, however, frighten me how quickly the 'geek community' has gotten onboard with Apple. Steve Jobs is the best salesman in the world. He sold the smartest community (geeks, by definition) on their biggest enemy (closed everything), and made them love what he's doing. Rather appalling if you ask me.

Re:The truth about Apple

[geekoid]

First off, geeks aren't nearly as smart as they like to pretend they are.

Second, Close sourse isn't the 'enemy' of geeks. Almost everything Geek enjoy is closed in some manner. DOn't believe me? DO a spiderman comic* and see how fast you get closed down.

Many geeks use windows; which is less open, and not as powerfull as OSX.

Apple makes toys that make geeks wet their pants.

*or any number of things, I chose comics as an example.

Re:The truth about Apple

[osu-neko]

If you prefer Apple because its one and only way fits well, that's fine. But please stop looking down others (Microsoft users, Linux, etc), because you're the inferior drones.

I look down on any person as inferior who thinks there's something wrong with buying and using whatever I like best for whatever reasons make the most sense for me.

Re:The truth about Apple

[LoudMusic]

Heh - you're right. What's sad, though, is that Apple does a disservice to it's shareholders by not opening up. Examples:

1) Let OS/X be usable on any Intel platform. Sell it on the shelf. Sell it via OEM on new Intel-based PCs. Increase your user base. Increase profitability immediately. Imageine - OS/X being able to go head-to-head vs Windows. But Alas, Apple is too retarded to see this. Not so fast there. One of Microsoft's biggest battles is dealing with a bad reputation for Windows when in fact it's the hardware that is at fault. Apple experienced this with the various Mac clones that were licensed about a decade ago. Where they would have a larger user base, the consistency of quality that Apple produces would be tarnished by people running OS X on sub quality hardware and blaming OS X for their troubles. The practically universal idea that OS X "just works" would quickly fade, and it would become comparable to Windows OSes (in that regard), but Windows has a larger software base and would then become more popular again.

2) Open up iTMS to other players. Selling more music is a good thing, right? Again, Apple passing up easy money by locking it in to iPods. I personally, nor will I let anyone in my family, buy a POS iPod just for this reason alone. iPods have a better track record than any other portable music device that I know of. The same as above for this hardware market.

3) Their whole thing with the iPhone. The price is stupid (and their quoted prices are AFTER rebate if memory serves). Also, had they just made it an open-network phone, letting people buy them from all the major carriers, imagine how much better it'd sell. I don't know of very many people who will change providers just to have an iPhone. Keep in mind that they're not trying to sell everyone an Apple phone. They're just trying to get to the people who use 'smart phones' already. That group of people probably don't care what it costs, nor who's providing the service. They just want it to be rock solid because they don't like dealing with broken things or the people who fix broken things. Yes the Apple phone is expensive, but it replaces four devices, each about half its price, which makes it quite a bargain.

I like to bitch about Apple's business choices just as much as the next guy, but you're not thinking this shit through.

"surprised and disappointed"

[Speare]

Legalities aside, and I'm not defending the legal aspects of Apple's continued use of the mark, but I'm sure Steve was "surprised and disappointed" too. Apple was apparently talking with Cisco all that time, just to have Cisco actually ship a product with the name just a month before the MacWorld keynote. If Cisco wants to paint itself as the poor hapless guy who got shafted on a sharing agreement mid-negotiation, I don't think it will really hold water. Apple spent how much on the collateral printing for the keynote, prior to the Cisco release? If Cisco puts out an iTurd with an "iPhone" sticker, I'm sure Apple's desire to be associated with Cisco and to share the trademark drops even more.

Note that Cisco is trying to win in the court of public opinion. Apple is remaining very mum about the whole thing. Which one is going to be seen as reasonable public pre-trial behavior in a court case is actually very debatable.

Re:"surprised and disappointed"

[Speare]

One, "defend the mark" does not equate to "fire off a lawsuit immediately." That's only one tactic that serves the purpose of defending the mark. The fact that documented negotiations exist at all is sufficient to show that they were holding up the legal requirements for defense of the mark.

Two, "fire a lawsuit" is sufficient, but to then hold press conferences or litter the WSJ with press releases explaining to uninvolved parties *why* they executed a legal option is not beneficial to their situation in any legally binding way, so why do it? Reason: public relations pressure. Cisco customers and shareholders are asking Cisco why they're being big poopy-heads when they could resolve the mark issue in a myriad of other methods.

Re:"surprised and disappointed"

[PsychicX]

I'm sure Steve was "surprised and disappointed" too. Apple was apparently talking with Cisco all that time, just to have Cisco actually ship a product with the name just a month before the MacWorld keynote

Had you read the article, you would have known that Cisco has been shipping an IPhone product since it bought InfoGear in 2000, and InfoGear was shipping it in 1996.

They have a full decade of an active product with the name before Apple's announcement. This wasn't some Cisco ambush.

Open approach my behind

[ParraCida]

After reading the full article, it seems very likely to me that this 'open approach' and 'interoperability' stuff from Cisco is them trying to hitch a ride on the success of the apple iphone. I can understand why Apple doesn't want their phone associated with the Linksys phone, so quite frankly I don't see how this can come as a surprise to Cisco.

On the other hand, iPhone is quite clearly a trademark belonging to Cisco, and Apple knows it. So should be interesting to see what is going to happen.

Re:Just like iTV....

[radish]

The difference is that when the iTV was announced they specifically said that wasn't the final name, presumably because they new about the existing trademarks and possibility of confusion or litigation. In this case, they called it the iPhone, and even though they knew all about the existing trademarks they didn't say anything about the name being a placeholder. I don't think they have any plans to change it unless they're forced to.

Apple Corporation

[mpapet]

This is another example of the much-beloved Apple saying a firm no to interoperability. Now, it's probably the case that Cisco was asking for way too much. But this highlights Apple is only a little different than say, Microsoft when it comes down to pissing matches and interoperability.

At this point in history, both OS vendors will eat their babies. Beware brother, beeeware.

Mod me down for saying an unkind word about Apple, but there is at least a little truth to it.

Some thoughts on strategy and the endgame

[Alexis1537]

I think it's quite and interesting contest. It might be a case of Cisco only telling half the story (why would it open up completely on a blog?). The negotiations will almost certainly have been fairly complex. I see four major factors which may decide the outcome of this one. The two most-quoted ones are:

1) Apple's reliance on the "i" series of trade marks it already has. It will use this as a means of satisfying a test to determine the likelihood of confusion between the products. Some US legal experts have already claimed that this may not be a runner. We'll see (the area is heavily fact-specific so don't judge!)

2) Cisco's failure properly to defend its iphone trademark against usage by other third parties involved in a similar line of business. Can't really comment on that seeing as I don't know enough about it. what's funny however is that a google search for "iphone" gives you about 7 pages of results on the Apple product and diddly squat on any else.

There are two other factors which I can see, but which I think haven't necessarily been talked about much:

3) Cisco knows full well (but omits to mention) that Cingular will not allow Apple to "do VoIP" on its cells. An invitation to commit to interoperability between two companies looks on the surface like something both would want. After all, both are respected organisations with lots of R&D skills and a (generally well thought-of) reputation for execution. However, because the business plan could not yet allow that, Apple sensed a dangerous honey trap designed to lure it into an exclusive tie-in on VoIP on the iPhone platform. As we know, Apple partners with who it wants when it wants.

4) As this article http://www.out-law.com/page-7650 suggests, Cisco may lose its EU trade marks in "iPhone" shortly. Apple may have filed the revocation notice itself. If the filing succeeds, Cisco will almost certainly have to settle.

As you can see, it's a muddy one. I'm not hugely impressed with Cisco's line that "it was never about the money". It's always about money if you think that you're paying more than something is worth. Apple's probably seen that 4) is likely to succeed, and will stall until Cisco is forced back to the table with a lower price. My 0.2$

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[account_deleted]

Comment removed based on user account deletion

Steamroll how?

[hypermanng]

A record company selling Beatles music sued a computer company selling microcomputer hardware, the former having a red apple logo, the latter using a rainbrow-striped apple with a bite in it. Which "Apple" was doing the steamrolling, here?

I mean, should Anya Seton's estate executors be suing Toyota and Marion Bradley?

The standards regarding "infringement" require than the trademark similarity be prone to cause marketplace confusion between the products, diluting the brand.

Of course, Apple's prima facie argument that VOIP and cellular phones are too dissimilar to cause confusion remains highly questionable. It's true that the two are fairly dissimilar markets, but that could easily change, especially given Cisco's otherwise-spurious "interoperability" line. That request alone may prove to a judge that there's at least a case that the two markets are insufficiently dissimilar to allow Apple to use the same trademark.

McWhopper

[mrcdeckard]

ok, so i'm probably more of a macboi than i want to admit, but here goes:

this seems to me like burger king coming out with a McCoffee drink, knowing McDonald's is about to do the same, then suing McD's when they do.

apple has been using the i* for quite some time, going back to the iMac in what? 1999? i know of no i* branding used by cisco before the iPhone. I think that apple would have a compelling argument on that fact alone.

it really seems like cisco is saying "hey, wait for me guys!... guys?", by sneaking in an iPhone months before the keynote, as another post pointed out.

mr c.

RTFA.

[rufo]

The Cisco General Counsel says they bought a company that had purchased the name in 1996, and if you look at the Wayback Machine, Cisco references the product on their website as far back as 2000 (after the iMac came out but well before the iPod was released).

This is ignorant...

[nodesyn]

I haven't done a whole hell of a lot of research on this yet... isn't it ironic that Cisco released an "iPhone" 3 weeks before Jobs announced their "iPhone." Also if they had been negotiating... which they apparently have been... Cisco probably had some sort of general idea when Apple would want to use this name for their product, and then BAM the new Linksys iPhone... and did anyone ever question that instead of being the masters of patent trolling (which should be illegal) just wanted to be a stickler in the butt of Apple merely because they have been growing so well?

How can they interoperate?

[amtron]

I just don't understand how Apple's phone and Cisco's phone would inter-operate. I know that if I bought one, why the hell would I want it to inter-operate with that phone? It seems Cisco wants to be friends with Apple and Apple is too cool for friends. It's kind of pathetic.

Why not "iPod Phone"?

[PCM2]

I don't get why Apple doesn't just call it the iPod Phone. iPod is an existing, well-established, trusted brand. The iPhone hardware is an iPod -- that is, it gives you all the same features. It just has phone and camera features added on. So what? Nothing about the name "iPod" says "MP3 player." They already added video playback and nobody batted an eye. What better way to revitalize the iPod brand than to add a line of products with phone features?

Re:MOD UP: Mod points going to Mac users today?

[Anonymous Coward]

I dunno, when Cisco/Linksys finally released something called the iPhone, I'm sure they had Apple and law suits in mind. Cisco/Linksys certainly knew Apple was making a phone and that they wanted to call it the iPhone. So, rather than call it something, anything, along the lines of the rest of their product line, they deliberately use this one for law suit protection. Imagine if it goes to court and someone asks "You own the name, why don't you have a product that uses it?"