Cisco Systems Sues Apple Over iPhone

Cisco Systems (CSCO) is suing Apple (AAPL) over the iPhone, but keep in mind that this has no impact on the phone itself other than the name. The suit was filed in the United States District Court for the Northern District of California against Apple, Inc., seeking to prevent Apple from infringing upon and deliberately copying and using Cisco’s registered iPhone trademark that it has owned since 2000 via the acquisition of Infogear.

"Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco’s iPhone name," said Mark Chandler, senior vice president and general counsel, Cisco. "There is no doubt that Apple’s new phone is very exciting, but they should not be using our trademark without our permission.  Today’s iPhone is not tomorrow’s iPhone. 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."

In short: Either Apple didn’t want to pay enough or Cisco decided it wanted too much.  If you will recall the street had already become used to the fact that Cisco had the name iPhone before this was introduced.  With all the hype over the "Apple Phone," Apple can either change the name or fight it.  Jobs & Co could even call it the Poop Phone now and get away with it.  Shame on Cisco or Shame on Apple, but if this creates any substantial weakness beyond the 0.6% drop seen in after-hours you know it is just an overreaction.

Jon C. Ogg
January 10, 2007