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

[InsaneProcessor]

I just trademarked "iDoorStop", "iPaperWieght", and "iNotFunny"

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

[Beyond_GoodandEvil]

It won't be long before we get the massive market re-branding: aPhone, aMac, and aPod

So soon I can tell all those mac fanbois to get aLife?

Laugh, it's funny.

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?

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:"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

Cisco's possible trademark problems

[jmbehmke1]

IAATL - trademark law is one of my specialities. The Cisco iPhone trademark was registered 11/16/1999 (Reg. No. 2293011). In order to keep a trademark registration active, you have to file a Declaration of Use on or before the sixth anniversary of the registration date, in which you state, under penalty of perjury, that you have been using the trademark continuously during that period. The sixth anniversary would have been 11/16/2005. Cisco did not file the Declaration of Use in the requisite period. However, the USPTO gives you an extra six months grace period, if you pay an extra fee. This grace period would have expired 5/16/2006. Cisco filed a Declaration of Use on 5/4/2006 which kept their registration active. Had they not filed, their registration would have been canceled. With the Declaration, you are required to file a copy of a label or other packaging showing the trademark in use. Cisco filed a picture of the box for the Linksys iPhone. Now the Cisco press releases I have seen indicate that Cisco released the iPhone products in December 2006. Now this is my personal opinion based on the information I have seen so far (your mileage may vary): Cisco may have a problem with its trademark registration because it has not been continuously offering a product under the iPhone trademark since 1999. They knew that Apple was interested in the name (since Apple had approached them and negotiations were ongoing). If Cisco didn't launch a product using the iPhone name, their trademark registration would be canceled and they would have no bargaining chips with Apple. So in order to keep the trademark active, they had to file the Declaration of Use, and start selling a product under that trademark. It is possible that the Declaration of Use is defective, as there was no continuous use, and the sample that Cisco submitted was for a product not released until 7 months later. The fact that the Declaration of Use was submitted only days before the deadline expires gives me the impression that they were scrambling to get a product to market, and had to file the Declaration before the product was ready. Apple's lawyers will have certainly found the same clues that I did, and may believe that Cisco's registration can be cancelled (by proving in federal court that the Declaration of Use contained mistatements of fact - there was no continuous use). If Apple believes that they can get the registration cancelled, they may not have wanted to sign the agreement Cisco proposed. Without the registration, Cisco and Apple would still have a trademark dispute to resolve, but Cisco will have a harder time proving that it has valid trademark rights.

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

[Pentavirate]

Cringely suspects that the whole thing is a marketing stunt. They had 2 major announcements at mac world:

1) iPhone
2) iTV

They both had trademark issues. iPhone was with Cisco and iTV was with eyeTV. They changed the iTV to Apple TV. They could have just as easily changed iPhone to Apple Phone or something else. Why didn't they do it? Cringely writes that he thinks it's for its marketing value. It guarantees that iPhone and the lawsuit will stay in the news long enough for everyone in the country to have heard of it. I don't know if this is the real reason but it does fit the facts. I wonder if the cost of a lawsuit is less than a TON of commercials and other advertisements.