GO
Loading...

What's in a name? Apple and Cisco square off over "iPhone"

iPhone
Apple
iPhone

What a stunning turn of events for two of the best known names in technology, squaring off over the same name: iPhone.

Weeks ago, I covered the naming controversy surrounding the impending announcement of Apple Inc.'slong-anticipated mobile device. For the past year, just about everyone referred to Apple's cell phone as the "iPhone." Go to Google, and the "i's" are certainly in Apple's favor: type in "Apple" and "iPhone" and you get 8.7 million results. Do the same with "Cisco" and "iPhone" and you only get 1.7 million results. Seems just about everyone is reaching the same connection that iPhone and Apple go together like chips and salsa.

Everyone, that is, except Cisco. Which filed a Federal lawsuit late Wednesday after years of negotiations apparently fell apart.

"Apple has come to us numerous times over the last five years seeking rights to the name and acknowledging that they should be coming to us for that," says Cisco Vice President and General Counsel Mark Chandler. "We've been in intensive discussions with them the last few weeks actually trying to come up with an arrangement where the name can be shared. We're disappointed that didn't work out but at the end of the day we have to take action to make sure our names don't get used without our permission."

Cisco has owned the rights to the name iPhone since 2000 when it acquired a company called InfoGear, which apparently trademarked the name going back to 1996. The InfoGear unit is now wrapped into Cisco's Linksys division, a maker of VOIP communicators and phones.

We were told as late as Tuesday afternoon, after the Steve Jobs keynote at MacWorld, that a deal over the naming rights was "imminent" and that an announcement was pending. Amazing that Jobs would take the stage and unveil the product without a deal in place, but I guess with the mercurial Apple CEO, nothing should be surprising, including Apple's official statement on the controversy: "It's silly. we think the lawsuit is silly. There are already several companies using the name iphone for VOIP products," Apple spokesman Steve Dowling tells me. "(Cisco's) trademark registration is tenuous at best. We're the first company to use the iPhone name for a cell phone. If Cisco wants to challenge us on it, we're very confident we will prevail."

But legal experts aren't so sure. Barry Cohen, a patent and trademark attorney with Thorpe Reed & Armstrong, says in essence that possession is nine-tenths of the law. And Cisco owns the trademark. That puts Apple at a severe disadvantage, weakened even further by going ahead and announcing the product without a deal in place.

"The question's going to be whether the (trademarks) are similar; here they're identical, and whether the products were similar, not necessarily whether they're identical," says Cohen. Clearly 'cell phone' and 'VOIP' are different, but that doesn't mean they're not similar. For example, Delta Airlines and Delta faucets are clearly two different products, both with trademarks and can operate in the same world."

But this story has a nefarious side to it as well: In Cisco's filing, the company claims that when negotiations with Apple stalled, Apple created a "front" company called Ocean Telecom Services, headquartered in Delaware, to try to secure rights to the iPhone name secretly, something first reported by AppleInsider way back in mid-October. In fact, the website found iPhone trademark filings from Apple in Australia (Oct. 2002; granted Dec. 2004); Canada (Oct. 2004); the European Union (Oct. 2002); New Zealand (Sept. 2006); Singapore (Oct. 2002; granted June, 2003); and the United Kingdom (Oct., 2002; granted April, 2006).

Taken alone, this might seem like a creative way of doing business. But in the broader context of backroom, boardroom shenanigans going on at Apple, it becomes another example of dirty-tricks business and bigfooting. To wit, Apple once pulled or prevented copies of "iCon Steve Jobs: The Greatest Second Act in the History of Business" by Jeffrey S. Young and William Simon from being displayed in its stores because the book was an unauthorized biography of Jobs. The company has sued websites for publishing secret information they collected about upcoming products purportedly from Apple insiders. More recently, Apple and Jobs have been at the center of the stock options backdating controversy which included the revelation that Apple had faked a board meeting to cover up what may be a misappropriation of options to Jobs himself. (Apple's own internal investigation has found no wrongdoing by any current Apple executives.) Lets not even talk about the multi-decade trademark dispute with the Beatles and Apple Corps!

"Apple's notorious for filing lawsuits," says Cohen. "There have been a lot of stories in the past of them going after little old ladies that have put 'pod' on some product and they have sued them. Believe me, if I had put out a little device, painted it white, played a cassette tape and put headphones on it, clearly a different technology than the iPod, but put the word iPod on it, I'm sure I would have received a 'cease and desist' letter."

Nothing like tarnishing a product even before it gets out the door (Apple says its iPhone won't be available until June.) Both companies have deep pockets and both appear to be digging in, and if a resolution appeared "imminent" to some just a few days ago, resolution now seems way over the horizon.

Questions? Comments? TechCheck@cnbc.com

Symbol
Price
 
Change
%Change
CSCO
---
AAPL
---