Wednesday, January 10, 2007

The "iPhone" Saga Continues -- Cisco Sues Apple -- What This Means for Apple

The intrigue surrounding yesterday's Apple iPhone announcement continues, as Cisco filed a lawsuit against Apple earlier today about Apple's use of the "iPhone" name. Cisco, of course, has long been a registered owner of the "iPhone" trademark.

Apple always has been known for bold, aggressive moves -- both in product design AND in business. And, Apple's decision to move forward using the "iPhone" name without an agreement with Cisco certainly appears to be more evidence of the same. (The parties had been in negotiations prior to the announcement according to reports.)

Cisco's lawsuit seeks injunctive relief against Apple -- meaning that Cisco is asking the court to prevent Apple from distributing its new "iPhone" under that name. If the court were to agree with Cisco, Apple, among other things, could be required to re-name its new multi-use cell phone.

You can bet that Apple cannot afford to let that kind of decision happen AFTER it begins to distribute its new phone/player under the "iPhone" name. And, given the nature of trademark litigation, no one (not even Apple) -- no matter how strong their arguments -- can feel truly confident that the court will see things their way. That is simply too risky.

This means Apple's best bet is to negotiate now and quickly with Cisco. But that, of course, would take substantial (with a capital "S") money flowing from Cupertino to San Jose unless Apple has some kind of real leverage.

Apple must believe it does have leverage -- not just strong legal arguments -- to play this game. And, Apple's best leverage may be that it has real alternative naming possibilities for its new phone in case Cisco is not willing to make what Apple believes to be a reasonable deal.

Do I hear the names "iPod Phone" or "Apple Phone" anyone? Believe me, Cisco will ...