Wednesday, February 21, 2007

iPhone Lawsuit Settlement

Apple and Cisco settled their iPhone trademark lawsuit, but (as of yet) nobody knows why. There are three explanations that I find plausible.

  1. The lawyers agreed that they are distinct markets, as in this AP story:
    “Although Cisco is making the point that we don't know what the future brings, it just strikes me that their markets are plenty distinct, and there's probably room for them to find peaceful cooperation,” said James Pooley, an intellectual property litigator and adjunct law professor at the University of California at Berkeley. “They're not naturally going to be stepping on each other's toes very much, so cooperation makes a whole lot of sense.”
  2. Cisco decided to settle for whatever Apple is willing to give — likely better than what they offered on Jan. 8.
  3. If today (or 3 months ago) you asked someone what an iPhone is, more consumers would say Apple than Cisco, undercutting Cisco’s claim to have established and protected its trademark.
The last two points are made by the New York Times story:
“Cisco had to provide access to the trademark to Apple if it wanted to achieve the highest value for the name. There was no potential second buyer who would have equaled Apple’s desire for the iPhone mark,” said Alan Fisch, an intellectual-property lawyer at Kaye Scholer in Washington.

He added that Cisco also faced the reality that consumers associated the name more with Apple.

“The iPhone name has been informally synonymous with an anticipated Apple phone for years prior to the product’s formal announcement,” he said.
I hate to say it, but Steve Jobs’ game of chicken seems to be vindicated. Of course, we need to hear what the actual terms are — perhaps in the next Cisco or Apple 10-Q.

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