iOops, Apple Didn't Actually Get The Rights To The Name iPhone

from the not-so-fast dept

In the weeks leading up to yesterday's big announcement there was a lot of talk about how Apple couldn't even use the name iPhone because it was a registered trademark of Cisco. Thus, it was as big of a surprise as any that Apple's new converged cellphone/iPod was indeed called the iPhone. The word out of Cisco was that the night before the announcement, they sent Apple the final terms of a license that would allow Apple to use the name, and that they expected a signed agreement right away. Well, apparently Apple didn't get back to Cisco quickly enough, and now the networking giant is taking Apple to court, seeking to prevent Apple from using the name. It seems likely that this is a threat to make sure that Apple takes Cisco's demands seriously, and that things will get worked out before the lawsuit goes to trial. Still, it's really astounding that Apple would make such an important announcement without having this matter long squared away.

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  1. identicon
    Stymie, 10 Jan 2007 @ 5:21pm

    I think it was a strategic mistake by Apple.

    Given that the crowd at Macworld went nuts for the new Apple iPhone, what's to stop Cisco from demanding 10x more than they were demanding before? Apple's options would be to:
    1) pay up
    2) change the name

    If Cisco does in fact own the trademark (based on what we've seen they do), then they can demand whatever they want to license it's use. They have no obligation to license the name to Apple or anyone else. They would say pay us $100000000000000 or don't use it; that's within their rights.

    Now, I think we agree that Cisco will never make jack squat with their own iPhone device, so it makes absolute sense for them to get whatever they can by licensing the name to Apple. But given that Apple has already started to build equity in the name (with the announcement and fanfare), the price just went up. And Apple did it to themselves.

    Cisco does not need to prove damages if all they want is to assert their rights to the trademark. A court will grant injunctive relief (prevent Apple from using the name) as long as Cisco establishes their ownership of the trademark. If Cisco wants to sue for money, then they will have to prove damages, but could also be awarded punitive damages in excess of actual damages.

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