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Apple and Cisco Return to Negotiating Table Over iPhone Trademark Dispute

By Chris Hogg     Feb 2, 2007 in Business
It's a typical fight among kids: Two toddlers sitting in a room fighting over a toy, unable to determine who it belongs to, and who has the right to use it. It takes a parent to step in and say grow up. Well Mom finally stepped in to help Apple and Cisco.
After Cisco announced it would be suing Apple for trademark infringement, analysts weighed in on the debacle and suggested an ugly legal battle could drag both companies through long legal battles.
But Apple seems to have learned from its experience in the court room, and Cisco appears to realize it could cost them a whole lot of cash to get in the ring with the iPod giant, as both companies have announced they are suspending legal action and returning to the negotiation table.
While the lawsuit against Apple is still pending, both companies have agreed to give Apple more time to respond to Cisco's initial request to talk about trademark rights and interoperability. Both companies hope to resolve the issue outside of court.
Cisco has owned the iPhone name in the U.S. since 2000, and the company began selling its own Internet-enabled phone under that name in early 2006. When Apple announced its own iPhone, Cisco claimed it was "deceptively and confusingly similar" to its own phone collection. Almost immediately, Cisco sued and screamed bloody murder. Well, bloody trademark infringement at least.
As AP reports: "Apple's Chief Operating Officer Tim Cook called the Cisco lawsuit "silly" and said Cisco's trademark registration was "tenuous at best." He also said, "If Cisco wants to challenge us, we're confident we'll prevail."
The case is no doubt confusing for most involved, and potentially lucrative for any company that comes out on top of the legal battle. But under U.S. law, two companies can use the same trademark, as long as the uses of the products aren't "confusingly similar." Cisco obviously carefully chose this wording when it announced the lawsuit, but Apple (and many observers) say the devices don't compete at all -- Cisco's iPhone was hardly known before Apple launched its phone, and they occupy different markets (for the most part).
Cisco heated up the debate further when it took out an ad in the New York Times earlier this week to promote the device, adding a small "R" for registered trademark next to the name.
And proving that ad execs can definitely have a sense of humour, the ad featured two women sitting on a grassy field using the Cisco iPhone and, of all things, an Apple laptop.
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