Thursday, February 22, 2007

Lieutenant Dan Got Me Invested in Some Kind of Fruit Company.

Cisco and Apple finally settled their dispute over the use of the trademark "iPhone."

It comes as no surprise since Cisco's complaint was filed back in January. The complaint alleged trademark infringement, unfair competition, false description and injury to business reputation (the charge of injury to business reputation is a California state claim; all the others are federal claims under the Lanham Act - the act that makes trademarks the domain of federal law).

Cisco had two main arguments in its infringement argument. The first that Apple's use of "iPhone" in its cell phones would confuse customers because Cisco's iPhone used for "computer hardware and software for providing integrated telephone communication with computerized global information networks." (That's from the description in the trademark registration.) The second is that even if Cisco and Apple make different products now, in the future, technology would allow their products to converge and the same mark would then compete head-to-head from two different companies.

One of the last paragraphs of the Associated Press story says, "Legal experts said Cisco's argument that the phones could eventually compete seemed like an unlikely scenario. They added that the products and markets they serve are currently so dissimilar there's little likelihood of future trademark tangles."

I agree that the "future" argument is weak. I am concerned, though, because at first blush, Apple's iPhone "combines three products — a revolutionary mobile phone, a widescreen iPod with touch controls, and a breakthrough Internet communications device with desktop-class email, web browsing, maps, and searching — into one small and lightweight handheld device" (according to the iPhone website). If that is not "computer hardware and software for providing integrated telephone communication with computerized global information networks," then I'm not too sure what is.

What I find interesting, however, is Cisco's trademark attorneys' lack of using trademark dilution as well as infringement in their arguments. Dilution is the use of a famous trademark in another mark which lessens the uniqueness of the mark. The issue here: Was "iPhone" famous before Apple's cellular phone announcement? I would have made the argument, especially since the Trademark Dilution Revision Act of 2006, or H.R. 683, was signed into law. The new law revised the definition of dilution so that the plaintiff only needs to show the defendant's mark is likely to cause dilution (in the past, only evidence of actual dilution was to be considered).

I'm not sure this is finished. Apple and Cisco, as a part of the agreement, are going to try to work together to have products (like the iPhone) that work with Apple and Cisco technology. I'm curious how well that will go.

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