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?

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

[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?

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.

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.

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

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$

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:"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.

Comment removed

[account_deleted]

Comment removed based on user account deletion

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).

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?