Cisco this week sued Apple over its use of the iPhone name for
its new mobile telephone. Cisco holds US and European trade marks
in the name and negotiations over a licensing deal between the
companies had broken down, Cisco said.
Trade mark specialist Lee Curtis of Pinsent Masons, the law firm
behind OUT-LAW.COM, has found a legal loophole, though, which could
strip Cisco of its European rights. He told technology law podcast
OUT-LAW Radio that in Europe a person
can lodge a revocation application against a trade mark
registration if the trade mark has not been used for the past five
years.
Just such a revocation was lodged by a German law firm, CMS, on
exactly the same day, 18th December 2006, on which Cisco launched
the iPhone.
OUT-LAW can find no use in Europe of the iPhone trade mark in
the five years preceding that revocation application, which means
Cisco's ownership of the trade mark is under threat in Europe.
Though there are references in US media to Linksys products dating
from 2005 using the iPhone name, this is unlikely to count as use
in Europe unless there were sales into the EU or Linksys, a
subsidiary of Cisco, undertook advertising and promotional activity
in the EU.
If CMS filed its revocation application before Cisco launched
its product, meaning earlier that day, then Cisco will lose the
trade mark rights.
Apple has the oldest application for the mark so would almost
certainly then own the trade mark in Europe.
But even if it is found that Cisco launched its product earlier
on 18th December than CMS launched its revocation application it
could still lose the rights. In that case a special rule comes into
play which is designed to stop companies launching products simply
to protect their trade marks.
"Under the European Trade Mark Directive any use made in the
three month period before the application for revocation is
disregarded, unless there were actual plans for resumption of use
before the trade mark owner became aware that an application for
revocation might be filed," said Curtis.
This complicated rule is designed to stop companies rushing out
a product quickly once they hear that someone is about to file a
revocation application on their trade mark. It creates a three
month window preceding the revocation application in which any use
of the trade mark is not allowed to justify the continued holding
of the mark.
The only way in which Cisco could use its 18th December product
to hold on to the trade mark is if it could prove that it had
launch plans which predated its learning that a revocation
application was being filed. That is a complicated issue which a
European court is likely to decide.
"The crucial question is when did Cisco become aware that they
might be planning to revoke," said Curtis.
The news could fundamentally change the negotiations between two
of the world's biggest technology companies. Curtis said that Apple
had paid The Beatles' record label tens of millions of pounds in a
settlement over the Apple name. "That was tens of millions of
pounds. This could be more," he said.
But the potential weaknesses in Cisco's European situation could
change that completely. A mutual licensing agreement between the
companies could end up taking the place of a multi-million pound
payment.
There are barriers in Apple's way, though. Observers are
assuming that CMS is acting on behalf of Apple, and if that
revocation is successful then Apple is the next in line to register
the trade mark. But three European companies have filed objections
to Apple's 2002 registration application. The details of those
objections are not available, but they could either derail Apple's
application or limit the rights that it wins through its
registration.
Cisco's ownership of the iPhone trade mark stems from its
purchase of a phone equipment maker seven years ago. "Cisco
purchased Infogear in 2000 and Infogear were the proprietors of a
US trade mark registration for iPhone dating from 1996 for various
computer software relating to telephones," said Curtis. "In the
European Union Cisco systems also own a community trademark
registration for iPhone as well dating slightly later."
Cisco has said that it was negotiating with Apple over the use
of the iPhone name up to as late as Monday night. Apple chief
executive Steve Jobs then announced the name of his company's new
mobile telephone as iPhone on Tuesday without a deal being in
place.
An Apple spokeswoman was quoted in the US press as saying that
the company would mount a case based on the fact that its product
is different to Cisco's because it was a mobile phone and Cisco's
was a voice over internet protocol (VOIP) phone.
Curtis said that that argument was unlikely to convince a court.
"The basic scenario is you have to look at the nature of the
product, the use they are put to and the trade channels through
which they are sold to deem whether they are similar or not," he
said. "I think it's not a particularly tenable argument to put
forward that the products are not similar, they're [both] telephone
products."
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