Cisco Sues Apple Over IPhone Name

In this undated photo provided by Apple, Apple's new iPhone is shown that was introduced by Apple CEO Steve Jobs during keynote address at MacWorld Conference & Expo in San Francisco, Tuesday, Jan. 9, 2007. (AP Photo/Apple, ho) (AP)

Apple went so far as to create a phony company _ called Ocean Telecom Services LLC _ to get around Cisco's trademark, Cisco alleges.

In an application to the U.S. Patent and Trade Office in March, Ocean Telecom billed itself as a foreign company doing business in Trinidad and Tobago. The company listed its attorney as James Johnson. His contact information was an e-mail address from Google's free Web-based gmail service.

On Thursday, the Apple spokeswoman said the company would not discuss Ocean Telecom.

No one responded to an e-mail that The Associated Press sent to James Johnson's e-mail account.

Despite harsh words in the lawsuit, Cisco spokesman John Noh said Cisco's attorneys are still willing to negotiate with Apple. He emphasized that Cisco _ the most richly valued company in Silicon Valley, with a market capitalization of more than $174 billion _ never wanted Apple to pay cash for naming rights.

Rather, Noh said, Cisco executives wanted to let Apple use the word "iPhone" on the condition that both companies' phones could communicate with each other. He would not provide technical details.

"This is not about money. We were seeking to work closely with Apple to make our devices more interoperable," Noh said Thursday. "Cell phones, work phones, home phones, personal computers _ they're all converging. The value of that convergence is limitless, and the key to that is industrywide interoperability. It's a core tenets to our business."

Barry Cohen, a partner in the Philadelphia office of Thorp Reed & Armstrong, said Cisco had a strong argument. Judges usually allow products from different companies to share the same name only when they're starkly dissimilar _ Delta Airlines and Delta Faucet, for instance.

"Those are clearly two businesses that don't overlap, except for maybe the bathroom in an airplane," Cohen said.

Judges also consider possible expansions of the product lines in determining whether trademark infringement occurred. Another factor is intent _ did the company not know of another with a similar name? That can't be the case with Apple, which first approached Cisco about the name nearly six years ago.

Apple may argue that the word "iPhone" is so generic and broad it should not be trademarked at all. Numerous English words have become so pervasive _ aspirin, escalator and elevator, for instance _ that they've lost trademark protection. (Apple has aggressively defended the word "iPod," sending threatening legal notices to people who use the word to mean any type of digital music player.)

"The problem with the genericness argument is that, if Apple goes that route, the next day Nokia could come out with an iPhone, and I can't imagine that would go over well with Apple," Cohen said.

If Ocean Telecom is the "alter-ego" for Apple and applied for the trademark, as Cisco suggests, that could undercut the argument that the name is not worthy of trademark protection.

It's unclear why executives couldn't settle their naming skirmish. Grace Han Stanton, a trademark expert and partner in the Seattle office of Perkins Coie LLP, said Apple executives were likely anticipating the lawsuit long before they launched the iPhone Tuesday.

"Why choose iPhone when there's a known conflict? Maybe they wanted the media frenzy," Stanton said. "This added a lot of fuel to the iPhone fire."

Peter Morici, business professor at the University of Maryland, acknowledged that both companies have ample resources for a multi-million-dollar court battle _ but why? Apple's marketing staff is among the most talented in corporate America and should be able to come up with a catchy new name.

"Apple doesn't need this lawsuit," Morici said. "A new, creative moniker would be a wise strategy."