Cisco Systems on Wednesday sued Apple over its use of the iPhone trademark, a day after Apple shook up the cellphone market by unveiling its sleek mobile phone using the name claimed by Cisco.
Shares of Apple, which are volatile, initially fell 1,3% in after-hours trade following the announcement and then pared the loss to less than half a percent.
Apple chief executive Steve Jobs debuted the long-rumored iPhone at the start of Apple’s annual Macworld conference in San Francisco on Tuesday, and both companies had said a deal on the ‘iPhone’ name was near.
”We think this is silly,” said Apple spokesperson Steve Dowling of the tiff over trademarks. ”There are already several companies using the name iPhone for voice over IP [Internet Protocol] products.”
Cisco said it wanted to keep Apple from ”infringing upon and deliberately copying and using” the trademark, which the number one network equipment maker obtained in 2000 after acquiring Infogear. Infogear had previously owned the trademark and had sold devices called iPhones for several years, it said.
Linksys, a division of Cisco, has been selling wireless products with the iPhone name since early last year, with new products added to the line in December.
Linksys is part of Cisco’s strategy to tap consumer electronics markets; Cisco early last year bought set-top box maker Scientific-Atlanta.
Analysts have called Apple’s move into the rough-and-tumble cellphone market its most significant yet into the consumer electronics industry.
On Tuesday, a Cisco spokesperson said the company had been in discussions with Apple, and it believed Apple would agree to a final document and public statement concerning the trademark.
”We had been ready to resolve the very few items that remained,” Mark Chandler, Cisco’s chief counsel, said on Wednesday. ”Our goal was to collaborate with the use of the trademark on different products for the two companies.
”Before the product was announced we hoped we would and we assumed it would be concluded shortly afterward, if not in advance, but that seems not to have been the case,” Chandler said.
Jobs in an interview on Tuesday after his keynote speech during which he debuted the iPhone, expressed similar sentiments about an agreement being reached.
Said Dowling of Apple: ”We’re the first company to use the name iPhone for a cellular phone and if Cisco wants to challenge us on that we’re very confident we’ll prevail.” – Reuters