iPhone trademark may cost Apple millions

[echarcha]

iPhone trademark may cost Apple millions

Meenakshi Ganjoo in Silicon Valley | PTI | January 12, 2007 | 16:21 IST

Apple Inc. may have to pay hundreds of millions of dollars in royalties to Cisco Systems for the coveted iPhone trademark, industry experts believe.

A day after Apple CEO Steve Jobs unveiled the Apple iPhone at a trade show in San Francisco, Cisco filed a lawsuit on Wednesday, asking the judge to refrain Apple from using the name "iPhone," which is a Cisco trademark since 2000.

With financial analysts estimating iPhone revenue to hit $6.5 billion in 2008, licensing fees could run Apple $130 million to $325 million per year, according to Red Herring, an online technology publication.

Over the period of a five-year product run, it could cost Apple well over a billion dollars in royalties, the publication reported on Friday.

"If they licensed it, the figure would be several percent of revenue annually," Mich Bergesen, executive director at Landor in New York told Red Herring.

"It could be 2 to 5 per cent or higher."

During the launch of iPhone, an iPod-like cellular phone, Jobs said he expects the company to take about one per cent of the market by selling about 10 million phones, priced at $499 and $599, in 2008.

Merrill Lynch analysts told Red Herring that it amounted to $6.5 billion in revenue in 2008 based on an average selling price of $525 and a $125 carrier subsidy per phone.

Cisco 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 back to March 20, 1996.
"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," the official said adding, the company is seeking injunctive relief to prevent Apple from copying Cisco's iPhone trademark.

Cisco said this lawsuit was not over money, product services or royalties, but because Apple flatly refused to come to an agreement with the company.

"We wanted to make sure to differentiate the brands in a way that could work for both companies and not confuse people, since our products combine both web access and voice telephony. That's it," Cisco representative John Noh said.

"This lawsuit is about Cisco's obligation to protect its trademark in the face of a willful violation. Our goal was collaboration. The action we have taken today is about not using people's property without permission."

But Tim Calkins, a marketing professor and branding expert at Northwestern University's Kellogg School of Management, said that Cisco's joint-ownership proposal is merely a negotiating point. "This ultimately does come down to money."

Calkins said it was almost impossible to calculate how much Apple would be willing to spend to secure control of the iPhone brand.

However, Calkins said the key question for Apple is: "Could Apple launch a phone under a different brand and how much would it hurt them to do so?"
Commenting on the lawsuit, Apple spokesman Steve Dowling called the Cisco lawsuit "silly," saying there are several companies using the term iPhone for VOIP products, and Cisco's trademark is "tenuous at best."

Link (http://www.rediff.com/money/2007/jan/12apple.htm)

[echarcha]

Also check out http://blogs.cisco.com/news/

[chitrala]

But it looks like a helluva phone..... I'd heard that Apple was in talks with Cisco regarding iPhone use..... however it would be unethical on the part of Cisco to sue Apple as Apple has given a whole new meaning to letter 'i' as a prefix. All others "iMate", "iPac", "iRiver" etc. were just followers.

[echarcha]

But it looks like a helluva phone..... I'd heard that Apple was in talks with Cisco regarding iPhone use..... however it would be unethical on the part of Cisco to sue Apple as Apple has given a whole new meaning to letter 'i' as a prefix. All others "iMate", "iPac", "iRiver" etc. were just followers.

How would I feel if someone started a line of products called echarcha when I own the domain echarcha.com? I am surprised you find Cisco's action 'unethical'? What is so unethical?? Protecting your own name and trademark is unethical? :rolleyes:

Or how would it be if you made a puppet and called it Elmo? Try doing that and tell what happens! :rolleyes:

If you are supposed to feel bad or good about something and not obey trademark laws then what is the use of these laws? Let everyone make everything and name it as they like!

Apple was invited into negotiations and they did not want to pay up! Apple goes after other companies aggresively to protect their trademark, but when someone else goes after them, then we are supposed to feel sorry?

And iPhone products have been marketed and sold (sicne 1996) even before iMac or iAnything came out from Apple!

[Sane Less]

But it looks like a helluva phone..... I'd heard that Apple was in talks with Cisco regarding iPhone use..... however it would be unethical on the part of Cisco to sue Apple as Apple has given a whole new meaning to letter 'i' as a prefix. All others "iMate", "iPac", "iRiver" etc. were just followers.
I do not understand your statement, Chitrakala pai... how did Apple give a whole new meaning to "i"? What was their first product that started with "i"?

How can "iRiver" be a follower when the company was selling MP3 players long before "iPod" was even conceived?

[echarcha]

I do not understand your statement, Chitrakala pai... how did Apple give a whole new meaning to "i"? What was their first product that started with "i"?

How can "iRiver" be a follower when the company was selling MP3 players long before "iPod" was even conceived?

Sane Less, I can say that Apple made the portable music player quite cool and sexy with a good design and calling it iPod which sounds cool.

But still, rules are rules - they have a trademark and they used it. Imagine, someone else like Creative trying to use iPod to market their Rhomba brand or Microsoft using iPod instead of Zune as the brand name?

[HarHarMahaDev]

Wondering if Meenakshi Ganjoo had to warm bed of underworld don (http://www.echarcha.com/forum/showthread.php?t=25521)in order to write this article???!! :D (slight derail here....!!)

[chitrala]

What I meant to say wa that the whole bunch of apple products/softwares uses the prefix "i". iChat, iMac, iBook, iPod, iTunes, iDvd, iCal,iPhoto, iTV, iLife etc..... so very naturally when it will launch a phone it will be called iPhone.... now I agree that they are violating a trademark.... but Cisco should consider that Apple is not trying to rob iPhone's brand value. It just has to be called iPhone. Legally Cisco is every inch within its rights but this "i" letter just reminds me of an Apple product....
On second thaughts.... Apple could have come up with some other name and avoid controversy.... they don't need it.. it will only help Cisco.
Did i say iPhone(Apple's) surpasses my expectations... it might be expensive but have a dekko

[Sane Less]

Why can't they just call it iTele:confused: Oops... did I just miss out on millions:(


or iCell?

[28virgo]

it might be expensive but have a dekko

Have a detailed dekko:

http://www.echarcha.com/forum/showpost.php?p=338992&postcount=18

[28virgo]

Why can't they just call it iTele:confused: Oops... did I just miss out on millions:(


or iCell?

Or what about iMobile...

[chitrala]

One more thing is clear that Cisco is trying to get benefit from the iphone wave... it has got this trademark since 2000 but has launched the product just weeks before Apple's launch:confused: .
Another thing is that a cell phone and an internet phone are a completely different goods and have different markets. It doesnt bother Cisco a bit when their direct rival "Teledex" and "Orate" used the trademark:rolleyes: . Because it wont get any publicity out of those smalltimers. Cisco clearly failed to protect their trademark and are now crying foul:down: .

ADD: If Apple can get "iPhone" then why iMobile or iCell :D

[ShivSainik]

Have a detailed dekko:

http://www.echarcha.com/forum/showpost.php?p=338992&postcount=18

Its looks amazing ! The scrolling interface and overall user interface is too good. But I think it looks too delicate for users like me :(

[echarcha]

One more thing is clear that Cisco is trying to get benefit from the iphone wave... it has got this trademark since 2000 but has launched the product just weeks before Apple's launch:confused: .
Another thing is that a cell phone and an internet phone are a completely different goods and have different markets. It doesnt bother Cisco a bit when their direct rival "Teledex" and "Orate" used the trademark:rolleyes: . Because it wont get any publicity out of those smalltimers. Cisco clearly failed to protect their trademark and are now crying foul:down: .

ADD: If Apple can get "iPhone" then why iMobile or iCell :D

How do you know other companies you mention have NOT entered into an agreement with Cisco?

How about someone using your name to promote something without your permission? How about I use your company brand or registered trademark to sell something I make?

And who says or what proof do you have that Cisco is cashing on phone wave just now? For your information, Cisco has the largest installed based of VoIP phones in the world! Also, the iPhone brand has been in the market since a long time and not just now as you claim. Please check the facts.

Offcourse if you are a Macky (just like there are Microsofties) then there is no point explaining what a trademark is to you! :clap:

[chitrala]

How do you know other companies you mention have NOT entered into an agreement with Cisco?
Well, this arguement is considered to be the trump card for Apple in this case... I don't know for sure but it is all over the internet. Kindly have a look.
Let me quote a blog
Abandonment. Under US Trademark law, trademarks can be lost through abandonment. Generally speaking, non-use of a trademark for three consecutive years is regarded as compelling evidence of abandonment of a trademark. This is a protection in our trademark system so that someone can't go through and, say, register iDesk, iLamp, iEverything and just see if it would be useful to Apple someday in the future. Since the iPhone trademark that Cisco has was acquired in 2000 and they have done nothing with it for 6 years, there is quite an argument for abandonment of trademark.
link: http://nonrandomchaos.blogspot.com/2007/01/why-apple-has-defense-against-cisco.html

How about someone using your name to promote something without your permission? How about I use your company brand or registered trademark to sell something I make?
Apple has been in talks with Cisco over it for almost 4 5 years now... the talks failed recently when Cisco wants something more than money... i forgot that term:( ..something like Cisco have part ownership of iPhone. Jobs refused and now this is the consequence. However, I've never denied that it is illegal on Apple's part. But if they win their claim in court... it would be all legal.. nahi?

And who says or what proof do you have that Cisco is cashing on phone wave just now? For your information, Cisco has the largest installed based of VoIP phones in the world! Also, the iPhone brand has been in the market since a long time and not just now as you claim. Please check the facts.

yuh.. but after 6 years one fine morning it remembered trademark iPhone is not in use :)
Offcourse if you are a Macky (just like there are Microsofties) then there is no point explaining what a trademark is to you! :clap:
huh!:rolleyes:


Short message?.... nahi re........:D

[echarcha]

Short message?.... nahi re........:D

Cisco never abandoned the iPhone trademark. Maybe you have not been to your local Circuit City or Frys electronics. YOu will see many devices sold by Cisco's company LinkSys with the iPhone brand name. Just that we do not make much fanfare for products like Apple does. We dont need to. The music on my Creative Rhomba player sounds just as sweet as any iPod :D and plus its not locked like iTunes music is :D

You are a Apple fan and I will let you say whatever. Trademark is trademark. Patent is patent. You cannot just change laws just because one company is into cool marketing.

Just as you are you and no one can deny it even legally as you have a birth certificate, so are trademarks. Apple and Cisco were in talks and if, as you speculate, Cisco wanted sharing the money for sharing the trademark, then what is wrong? Its business!! All the toy manufacturers like Hasbro, Mattel and Fisher Price do pay some money to Disney when they make toys for their characters. Is that wrong of Disney to make money this way?

Which world do you live in? Some socialist communist utopia where anything goes? :rolleyes:

[Cooldude]

Apple argues that Cisco wasn’t the only company to use the brand name “iPhone” as there are several other companies using the same name for their Voice Over Internet Protocol (VOIP) products. So Apple terms Cisco’s lawsuit as silly as Apple is the only company to use the trademark “Iphone” for cellphones & not for Voice Over Internet Protocol (VOIP) products.

Anyways legally speaking Cisco has the moral right to demand royalties from Apple for using a trademark that was theirs irrespective of whichever product it’s used for.

As for the "Iphone", it's sure touted to be a sell out. :up:

[echarcha]

Apple argues that Cisco wasn’t the only company to use the brand name “iPhone” as there are several other companies using the same name for their Voice Over Internet Protocol (VOIP) products. So Apple terms Cisco’s lawsuit as silly as Apple is the only company to use the trademark “Iphone” for cellphones & not for Voice Over Internet Protocol (VOIP) products.

Anyways legally speaking Cisco has the moral right to demand royalties from Apple for using a trademark that was theirs irrespective of whichever product it’s used for.

As for the "Iphone", it's sure touted to be a sell out. :up:
Coolbhai, how does Apple know for sure that the other companies are not in a legal agreement with Cisco for using iPhone?

Have you seen the Linksys equipment sold here? Have you seen the iPhone sold by Linksys for VoIP services like Vonage?

Bhai, its simple and Cisco does not need to be moral (though it has been very open and see the official Cisco blog in my second post) as it is legal owneer of the trademark. Please do read what Cisco has to say too. Just dont brush off Cisco and then say o morally they have a right. Damn it. Cisco has a legal right just like any other company who owns a trademark.

[chitrala]

It will be clear in a few days whether Apple is within their legal limit.

And, yes Cha' pai...I'm a Apple fan despite the fact that my iPod gave up on me exactly 2 months after a year when warranty ended. Thats because I really like their products.What's wrong with that? To me, you sound like a Cisco fan/employee ... we all have our soft spots for a particular brand ... I see nothing wrong in that... I dont think I'll use internet phone very regularly in near future, I may be wrong... but yeah iPhone...I'll look forward to buy it... not now but surely a few years later.

iPhone by any other name would be as good if it is made by Apple ( and as long as it is not made by Cisco.):D.

[GunsNRoses]

Adding fuel to the fire here:
Cisco lost rights to iPhone trademark last year, experts say (http://blogs.zdnet.com/Burnette/?p=236)
According to the article, it seems Cisco tried to pull a fast one, once they knew Apple was interested in the iPhone name. Interesting times ahead.