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Apple Hangs Up On Cisco

UPDATED: Apple's CEO Steve Jobs did an amazing thing at Macworld Expo Tuesday. He brought together two fierce rivals and giants of the Internet industry (Google CEO Eric Schmidt and Yahoo's Chief Yahoo, Jerry Yang) to help celebrate the unveiling of the Apple iPhone.

But one day later, all that iPhone talk would infuriate another Silicon Valley giant, Cisco Systems, enough to sue Apple.

On Wednesday, Cisco  announced it had filed a lawsuit in the United States District Court for the Northern District of California against Apple, Inc., which it said seeks to prevent Apple from infringing upon and deliberately copying and using Cisco's registered iPhone trademark.

Cisco said it obtained the iPhone trademark in 2000 after completing the acquisition of Infogear, which previously owned the mark and sold iPhone products for several years. Infogear’s original filing for the trademark dates to March 20, 1996.

Linksys, a division of Cisco, has been shipping a new family of iPhone products since early last year. As recently as December 18, Linksys expanded the iPhone family with additional products.

Unlike many trademarks disputes, Cisco spokesman John Noh said money wasn't an issue in the negotiations. Noh said Cisco had offered to share the iPhone trademark with Apple , although he didn't elaborate as to what else might be part of such an agreement.

"We've had extensive discussions with them recently and we were open to sharing the trademark with them," Noh told internetnews.com. "That's part of our culture, we're collaborative, and working something out would have been our preference."

"We think Cisco's trademark is silly," Apple spokeswoman Natalie Kerris told internetnews.com. "There are several companies using the iPhone name for Voice over IP products. Cisco's U.S. trademark is tenuous at best [because it's being used by others]. We're the first to use the iPhone name for a cell phone."

Kerris declined to comment on whether Apple had received Cisco's suit or if and when it would respond. She also would not confirm any negations with Cisco to date.

"I would think it's a tough sell for Apple," Allonn E. Levy, intellectual property litigator with Hopkins & Carley in San Jose, Calif., told internetnews.com. "If you think of trademark you're talking about consumer confusion. I tell people at its core, trademark protection is about unfair competition; it's different than intellectual property.

Levy said he didn't think making the distinction between the cell phone and cordless phone markets is enough for Apple to prevail.

"These are different types of phones, but you may find them in similar stores, and Apple would have a difficult time convincing a court that consumers are not going to be confused by that."

Companies can sometimes avoid trademark infringement claims when the name relates to different or unrelated industries. Apple itself has had trademark problems with Apple Corps Ltd., the holding company which controls the music of the Beatles.

Noh said Apple has asked permission to use the iPhone trademark for years and that the frequency and urgency of the requests had increased in the past few months. The most recent counterproposal by Cisco was sent to Apple on January 8 and Noh said since Apple has apparently chosen to ignore that, Cisco had no choice but to sue. "At the end of the day we expect Apple to respect our property and trademarks," said Noh.

While Cisco's iPhone and the Apple yet to be released product don't compete, Cisco said the lawsuit is an attempt to head off conflicts in the future. "Today’s iPhone is not tomorrow’s iPhone," said Mark Chandler, a senior vice-president and general counsel at Cisco, in a statement. "The potential for convergence of the home phone, cell phone, work phone and PC is limitless, which is why it is so important for us to protect our brand."