The day after Apple unveiled its iPhone, Cisco filed a trademark infringement lawsuit.
Cisco has owned the trademark on "iPhone" since 2000 when it acquired another company that filed the trademark in 1996, 2 years before Apple publicly got on the "i" bandwagon with the release of the iMac.
Apple calls Cisco's lawsuit "silly". They claim that other companies have been using the iPhone name, that their phone is a cell phone rather than a VoIP phone (giving it differentiation), and that Cisco's trademark registration is tenuous. Apple has been quoted as saying they're ready to go to court on this.
What does all this mean?
First, while patents and copyrights remain enforceable throughout their lifespan, a trademark is "use it or lose it". If you do not actively defend and enforce your trademark, it can be declared invalid.
Second, a tradmark is only on a class of goods. The idea is that the use of the trademarked name cannot create confusion in the marketplace. So goods with different purposes can have the same name as long as it's not going to make consumers believe the two goods are related in some way.
If you're making a line of underwear called "Orange Marmalade" and someone makes a computer monitor called "Orange Marmalade", it's unlikely that consumers will be confused into believing the underwear and monitors are related. But if you were making a line of HDTV flatscreens called "Orange Marmalade", you might have a solid case against the maker of the monitors. Though they technically have different purposes, they're similar enough to make the claim that they will cause confusion among consumers and that the monitor maker is benefitting from and trading on the good reputation you've built for the name.
In this area, I find Apple's claims spurious. They've been pretty vigorous in the enforcement of their trademarks and have made some stretches that go much farther than the cell/VoIP differentiation. While I'm no lawyer and can't say that Apple's apparent hypocrisy will have a legal bearing on this case or on cases regarding the enforcement of their own trademarks, I can only hope it does.
On the matter of enforceability... that's going to have to play out in court. Apple's going to have to show that Cisco has let the name be abused without any attempts to stop it to such an extent as to cause Cisco to lose the right to stop it. But if they do that, are they shooting themselves in the foot? If they get a ruling that Cisco lost its rights to enforce a trademark on iPhone, then they effectively give everyone and their brother the right to create products called "iPhone". Once they get it declared dilluted enough as to be unenforceable, it stays that way. They can go and file their own trademark on it and start trying to enforce it, but any enforcement actions will be a hard fight because the defendants can use their own arguments against them.
Apple was negotiating with Cisco to have a contractual right to use the name, but it appears they thought it would be cheaper to try to knock down Cisco's trademark than to pay whatever licensing fees Cisco was demanding. So rather than sign the contract, they went ahead with their press conference and stopped talking to Cisco.
What's going to be the kicker, though, is if Cisco seeks injunctive relief pending the court case, i.e. Cisco gets a judge to rule that Apple cannot use the iPhone name commercially until the case has been settled one way or another, claiming that Apple's use of the name will cause irreparable harm. I don't think that's going to be too difficult to do and I doubt Cisco hasn't already planned that. With the anticipated June launch date, Apple would have to rebrand quickly or delay the phone.
Or maybe Apple is going to take a page from a company that is suing them...
Apple actually got a court to stop Luxpro from making and marketing its Tangent MP3 player on the claims it was too similar to the iPod Shuffle (the old one that looked like a pack of gum, not the new one that looks like a pack of matches). Despite the fact that LuxPro's model had a screen (which the Shuffle doesn't), had an FM tuner (which the Shuffle doesn't) and played WMA (which the Shuffle doesn't), Apple was able to get the injunction.
That injunction was overturned in December, and now Luxpro is suing Apple for 100 million dollars to compensate them for lost sales and lost opportunities. Perhaps Apple is hoping that the possibility of them pulling a Luxpro on Cisco will keep Cisco from seeking injunctive relief.
In the long run, though, I seriously doubt that either of the parties want this to go to trial and get a ruling. If Apple wins, no one wins, because the name basically becomes generic for internet-enabled phones and Apple cannot stop others from using it. If Cisco wins, then they can do serious damage to Apple in terms of punitive damages for violations, plus the cost of rebranding the phone with a new name and switching all the marketing efforts to it.
I really think that this is just posturing, each side trying to use their argument and the possible outcome of the court case as leverage to win concessions from the other in the licensing agreement that will eventually be signed. The benefits of this court case just don't warrant the risks. This will be settled before June.
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