iPhones, Apple and Cisco

We are big Macintosh evangelists around here. I’ve used a Mac in my personal life since 1990, and Karl has used them here at the office as long as I can remember. For a small firm like ours they make total sense, since they do not break and allow technical amateurs like us to run our own servers, website, blog, email, etc. So, needless to say, Karl and I were both extremely excited when Steve Jobs and Apple announced the iPhone earlier this week.

The iPhone, which will not be released until this summer, will be Apple’s version of the blackberry or treo or other handheld “smartphone”. It will be a cellphone/mp3 player/web browser/camera/mini-computer. It was executed in typical Apple fashion, which means it looks beautiful, has a stunning GUI, and will probably be buggy until version 2 or so. In other words, Apple hopes it will be to smartphones what the iPod is to mp3 players.

Problem is, and this is where the lawyers come in, in 2000 Cisco Systems purchased a company which had, back in 1996, obtained a registration for the iPhone trademark from the USPTO. Apple, of course, knew this, and apparently attempted to acquire Cisco’s mark for years. Cisco was unwilling to license or sell it, since it was using it, according to them in direct competition with the product Apple launched earlier this week.

According to a lawsuit (link is to .pdf file) Cisco filed yesterday, Apple and Cisco were on the verge of working out a deal which would have allowed Apple to use the mark when Apple quit returning calls and launched the product anyway. This irritated Cisco; we’ll leave it to you to read their petition.

In an interesting twist, since Apple could apparently not obtain a trademark from the PTO for iPhone in the normal manner, given that Cisco got there first, the company, via a wholly-owned subsidiary called “Ocean Telecom Services LLC,” registered the mark in March in Trinidad and Tobego. Ocean Telecom then filed an application to register the mark as a foreign mark, in other words asking for a simultaneous registration. I do not know what legal effect this will have on Cisco’s case.

Given that we read both legal blogs (“blawgs”) and technology blogs around here, it has been interesting to see the fallout from both perspectives. Consensus seems to be that this is simply a stunning display of Steve Jobs’ hubris. Perhaps most exciting about all of this is Cisco’s on approach to managing the press surrounding their lawsuit. Cisco’s general counsel has his own blog and posted his version of the whole story. Whether or not it’s a truthful account, it feels candid and it thus gives the blogger, and hence the company, credibility, at least within the blogging community. For what it’s worth, numerous blogs have embraced Cisco’s version of events, simply because its GC posted candid-feeling comments free from typical press-conference mealy-mouthed verbiage (see, for example, posts from Scoble and Dave Winer).

Finally, two other common comments: 1) given the ferocity with which Apple has defends its own i_____ trademarks, Apple’s behavior clearly irritates many who are watching this story; and 2) iPhone is kind of a lousy name for this product anyway – the whole point of the device is the fact that it functions as much more than a phone.

It will be interesting to see how the litigation shakes out. Selfishly, I certainly hope Cisco is not successful in enjoining the release of a product I really want to buy, although it certainly seems that Apple is wantonly infringing on their mark. I am most interested, however, to see what, if any, impact the bloggers are able to have on the perception of those of us who love Apple’s products but are sometimes wary of their corporate approach (thank goodness, for example, their products’ generally high quality means we are not often at the mercy of their awful customer service).

As a lawyer, Apple’s involved attempts to obtain rights in the mark acknowledge, it would seem, their acceptance that Cisco’s ownership of the mark is (or ought to have been) an impediment to what they want to do with it. Perhaps the timing of the release has something to do with it. Announcing a product that is not ready to ship for six months is highly unusual for Apple; perhaps they simply assume that they can get something hammered out by the time they’ve actually built a mess of the things. Or, maybe they are happy to just sell their iPhone in Trinidad and Tobego (and the other myriad nations where they’ve also registered the mark). At any rate, one would think the company has too much invested now to risk not working out some kind of deal, but I guess we’ll have to wait and see.

Technorati Tags:
litigation, law, iPhone