Cisco could lose iPhone trade mark
OUT-LAW Radio, 11/01/2007
We uncover evidence that Cisco could lose the rights to the
iPhone trade mark in Europe, where Apple is next in line to
register the name.
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to out-law radio, the weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever-changing laws that govern
technology today.
My name is Matthew Magee, and coming up on this week's show we
look at the controversy surrounding one simple letter: a lower case
i. Has Apple gone too far in simply going ahead calling his new
product the iPhone when Cisco already owns the name? Maybe not. We
uncover evidence that Apple may in fact be able to wrestle control
of the trade mark from Cisco after all.
But first, the news.
- Wiki ordered to delete link to sensitive documents;
- government ditches ID Card iris scans; and
- Ryanair's Derry Airport deal to be exposed
A Wiki relating to a controversial prescription drug has been
ordered by a US Court to remove a link to documents which
originated with Eli Lilly, the drug's manufacturer.
The drug, Zyprexa, has been the subject of payouts by Eli Lilly
in cases over its alleged side effects, which ongoing suits claim
include weight gain and diabetes. Eli Lilly has already paid out
$1.2 billion to settle suits before they reached Court.
A Wiki, or collaborative information website, about the
controversy, zyprexa.pbwiki.com, published a link to internal Eli
Lilly documents which the New York Times said showed that
the company deliberately downplayed the alleged side effects of the
drug.
The Judge in one of the product liability cases, Federal
District Judge Jack Weinstein, ordered the site and a number of
named individuals to refrain from distributing the documents or
causing them to be distributed.
Digital rights group The Electronic Frontier Foundation (EFF)
defended the free speech rights of one anonymous poster in front of
Weinstein but the Judge has reiterated his earlier decision. He
will hear further arguments on 16th January.
Iris scans will not form part of the UK Government's planned
identity card system the National Identity Register (NIR). The only
biometric information to be held on the register will now be
fingerprints, in contrast to previously stated plans.
The Home Office's strategic action plan for the National
Identity Scheme, published in December, said that iris scans were
now just an option, and only fingerprints will be taken from those
enrolling in the scheme.
James Hall, the Chief Executive of the Identity and Passport
Service, told IT Week that the decision was down to cost.
"Collecting every biometric involves significant extra cost and I
believe we can achieve the objective – securing people’s identities
– without irises," he said.
A Home Office spokeswoman said that the Government would focus
on facial and fingerprint recognition but that a return to iris
scanning in the future would not be ruled out.
The move is the latest policy climb-down for the ID card scheme.
The Government also announced in December that it would no longer
be building one new single database on which the NIR would be
stored. The information will sit on three existing Government
databases.
Derry City Council must reveal the details of its deal with
Ryanair on landing fees, the UK's Information Tribunal has ruled.
The Council had argued that releasing the information would be
economically detrimental to the area but it lost the case.
A journalist had requested information from the Council about
the deal struck between it and Ryanair over the airline's use of
Derry City Airport. The Council blacked out financial specifics
contained in a fax from Ryanair outlining the deal, and the
journalist complained to the Information Commissioner.
The Council argued that it was permitted to keep the information
private under exemptions contained in the Act which protect
information that would damage an area's economic interest, but the
Information Commissioner and then the Tribunal over-ruled it.
Ryanair has previously been involved in disputes about its deals
with airports. The European Commission had found that the Local
Authority behind Charleroi airport had provided un-notified
assistance to Ryanair which broke EU rules.
That was this week's Out-Law News.
Steve Jobs always has a surprise for the Apple devotees that
gather to hear him launch products in San Francisco. Even when
launching technology's worst kept secret, the Apple mobile
telephone, he left the crowd gasping with his audacity: he called
it the iPhone, even though everyone knew that the rights to that
name were owned by router giant Cisco.
Incurring the wrath of Cisco, a lawsuit in California and the
bafflement of intellectual property experts everywhere, Jobs looks
to have made a rare tactical slip.
The area is fraught with complexity. A trade mark is what a
company uses to protect a brand, but it's a slippery thing – it
relates only to a specific geographical area and only to specific
areas of business. You can lose the rights to it if you don't
actually use the trade mark, so Cisco do not automatically get to
keep the rights to iPhone forever.
Lee Curtis, a trade marks specialist with Pinsent Masons, the
law firm behind Out-Law, explains the history of how Cisco came to
own the trade mark in the US and in Europe.
"Cisco purchased InfoGear I think 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 and in
the community in the European Union Cisco Systems also own a
community trade mark registration for the mark iPhone phone as
well, dating slightly later but they are the proprietors of that
right. My understanding is that Apple did approach Cisco for
consent to use iPhone and they have been in negotiations for a
number of months. Apple have filed various applications in the US
and in the European Union to attempt to register iPhone but they
are all pending at present and they actual postdate Cisco's or
InfoGear's rights."
Historically it all seemed to be pointing Cisco's way, but
Curtis has spotted a loophole which could strip Cisco of its
European rights.
In Europe a person can lodge a revocation application against a
trade mark registration if it hasn't been used for the past five
years. On exactly the same day last December that Cisco launched
its iPhone a German law firm, CMS, lodged a revocation
application.
In the preceding five years Out-Law can find no use of iPhone by
InfoGear or Cisco, which means its holding of the trade mark is
under threat in Europe.
If CMS's revocation application is deemed to have taken place
before Cisco's use, then Cisco will lose the trade mark rights.
Apple is next in the queue, having the oldest outstanding
application, from 2002.
But even if the revocation is said to have taken place later in
the day than Cisco's launch, a specific provision comes into play
that will still likely put the trade mark in Apple's hands.
Curtis explains: Under the European Trade Mark Directive which
is the basis of the Community Trade Mark Regulation which governs
this CTM Registration which Cisco owns, 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. So the crucial question is when did Cisco become
aware that they might be applying to revoke.
MM: So if this German law firm's revocation is successful, Apple
get the trade mark in Europe?
LC: And if they win those oppositions which these three other
parties have filed against them, if they win the oppositions and
they win the revocation action, then Apple will get the rights.
The astonishing outcome of some extremely detailed and
complicated legal wrangling could be that Apple will own the rights
to iPhone in Europe, while Cisco owns it in the US. This will
significantly strengthen Apple's hand and give it negotiating
clout.
Apple is still set to try other arguments, though. The other
argument Apple may make is that it has such a strong brand
association with putting a lower case i in front of anything they
launch that they have rights to the term iPhone. Again says Curtis,
history is on Cisco's side.
"The rights to iPod actually date from 2001 to the best of my
knowledge so after the iPhone rights in the US and in the European
Union so they can't claim, oh we came up with iPod and you just
traded off iPod based on iPhone, that's not tenable. One argument
that Apple might have is well they came up with iMac etc, they
would be on reasonably weak grounds because effectively then
although Apple's rights in iMac date from before InfoGear's rights,
they would effectively then have to be claiming exclusive rights to
the prefix i, which I think would be pushing matters slightly,
therefore I don't think Apple have a great chance of cancelling on
the basis of prior rights."
Apple had tried hard to win the rights to iPhone, even forming a
shell company to act on its behalf, according to Cisco's law suit,
and it says it is confident of victory in Cisco's court case. A
spokeswoman told US reporters that it is "the first company ever to
use iPhone for a cell phone. If Cisco wants to challenge us on it,
we're confident we'll prevail".
Curtis is not so sure that Apple's fine distinction between VOIP
phones and mobile phones will wash with a court.
"The basic scenario is you have to look at the nature of the
product, what use they are put to and the trade channels through
they are sold that deem whether they are similar or not. I think
it's not a particularly tenable argument to put forward that the
products aren't similar. They are telephone products and people
would associate them."
Perhaps the most surprising thing about this mess of conflicting
rights, of claim and counter claim, is that Apple is at the heart
of it. Pinsent Masons e-Commerce specialist Gavin McGinty says that
confusion like this is uncharacteristic, and relatively easily
avoided.
"I think what we are seeing here is Apple who are usually very
good at managing their brand and usually very good at managing
their marketing campaigns, struggling with another big player in
the market, and I think they could have a real fight on their
hands. I mean I think what this demonstrates is that there is
a real need for the brand profile and the trade mark portfolio to
be considered at the same time as the technology is developed and
probably long before the marketing cogs start to turn."
Few think that the case will run its course. A settlement is
inevitable. Though experts believe that that could run to tens of
millions of dollars, the legal web uncovered by OUT-LAW could
save Apple a fortune. Perhaps the audacious Jobs knew this all
along.
That's all we have time for this week, thanks for listening.
Why not get in touch with Out-Law Radio? Do you have a legal
problem you would like us to discuss on air? Do you know of a
technology law story? We'd love to hear from you on radio@out-law.com.
Make sure you tune in next week; for now, goodbye.
Out-Law Radio was produced and presented by Matthew
Magee for international law firm Pinsent Masons.
