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I Phone, You Phone, We All Phone with iPhone: Trademark Law and Ethics from an
International and Domestic Perspective
1.
Tammy W. Cowart1,†,
2.
Wade M. Chumney2
Journal of Legal Studies Education, Vol. 28 No. 2.
In today’s Internet-based and global business environment, the legal issues companies face will often involve issues
of intellectual property. In fact, intellectual property-based businesses “drive more economic growth in the United
States than any other single sector.” Virtually every product we purchase is protected by a trademark, a patent,
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and/or copyrights. Thus, basic concepts of intellectual property are a natural component in any business law or legal
environment course.
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This case is designed to expose students to the Lanham Act, U.S. Patent & Trademark Office (USPTO), and the
registration system in the United States, while also demonstrating the global issues involving trademark registration
and infringement. The following scenario demonstrates how a product name, or trademark, can become a major
issue for companies. Part II.A of this case study presents the facts of the dispute, and Part II.B contains questions for
discussion. I want you to write out the answers to the discussion questions and bring them to class. Most of the
concepts mentioned in the case are explained in your textbook. For those that are not or if you want a clearer
understanding of the term or concept, you can “Google” the term or concept.
Assignment: You are to read the case and prepare in writing answers to the discussion
questions and have those answers available in class.
II. CASE STUDY
A. Facts
On January 9, 2007, Apple, Inc. introduced its newest product, the iPhone, in one of the most anticipated product
launches in recent memory. Steve Jobs, CEO of Apple, Inc. stated,
Today, we’re introducing three revolutionary products …. The first one is a widescreen iPod with touch controls. The
second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device. … An iPod,
a phone, and an Internet communicator … These are not three separate devices, this is one device, and we are
calling it iPhone.
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He made the pronouncement at the Macworld Conference & Expo to cheers of Apple enthusiasts. But behind the
scenes, a firestorm had been brewing over the iPhone trademark well in advance of Apple’s January announcement.
The story actually began years earlier, when InfoGear Technology Corporation (InfoGear) filed to register the iPhone
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mark with the USPTO in March of 1996. InfoGear began selling its iPhone, which combined a telephone and dialup
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Internet portal, in 1997. In 2000, Cisco Systems, Inc. (Cisco) acquired InfoGear, thereby securing the U.S.
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trademark in the iPhone mark. The original iPhone trademark registration covered integrated telephone
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communication with computer networks. Cisco then used the iPhone mark after its acquisition of InfoGear for its
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Voice over Internet Protocol (VoIP) telephones. In 2001, Apple initiated conversations with Cisco for permission to
use the iPhone mark. Although negotiations ensued through 2006, Cisco never agreed to release its rights to the
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mark.
On September 22, 2006, Apple filed a Certificate of Formation in Delaware for Ocean Telecom Services, LLC (Ocean
Telecom). On September 26, Ocean Telecom filed an Intent to Use application with the USPTO for the iPhone mark,
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thereby requesting authority to use the mark. Ocean Telecom’s application claimed a prior right to the iPhone mark
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based on trademark filing number 37090 filed in Trinidad and Tobago on March 27, 2006. Moreover, on September
19, 2006, Apple filed an application to register the iPhone trademark in Australia. Apple’s application was similar to
Ocean Telecom’s and also claimed a prior right to the iPhone mark based on the same trademark filing in Trinidad
and Tobago.
This type of priority filing is allowed under the provisions of the Madrid Protocol Implementation Act (Madrid
Protocol). The Madrid Protocol allows for a trademark holder in another country to file an international registration
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with the World Intellectual Property Organization (WIPO). The trademark owner can then file for an Extension of
Protection of the trademark with the USPTO, which has the same effect and validity as filing an initial registration with
the USPTO. More interestingly, a provision of the act provides that an international registrant “shall be entitled to
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claim a date of priority … if … (2) the date of international registration … is not later than 6 months after the date of
the first regular national filing.” This provision allowed Apple and Ocean Telecom to register the iPhone mark in
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Australia and Trinidad and Tobago, respectively, and then file for Extension of Protection in the United States. The
effective date of trademark protection in the United States, however, was the date the original applications were filed
in Australia and Trinidad and Tobago, not when the registration was filed in the United States.
On December 18, 2006, Cisco launched its new iPhone product. But Cisco’s iPhone launch involved some
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complicating factors. Because Cisco had acquired the trademark from InfoGear in 2000, Cisco was required to file a
Declaration of Use in the sixth year of the registration term (in 2006), stating that the owner was still using the
mark. When Cisco filed the Declaration of Use, it allegedly sent in a picture of a cordless Internet phone with an
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iPhone sticker affixed to the box. Cisco claimed to have been shipping iPhone products since early 2006 when it
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acquired Linksys and that the December 2006 line of products was an extension of the earlier products.
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To complicate matters for Cisco, at least four other companies, including two in the United Staes, were using the
iPhone mark to market various products prior to Cisco’s iPhone product launch. Surecom, a Texas company, used it
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for a USB device. Vocal Tech, in Israel, used it for a software product. Orate Telecommunications, located in
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Britain, used it for a VoIP phone. The fourth use of the mark was for a line of hotel phones from Teledex, located in
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California. Further, the URL, “http://www.iPhone.com” was utilized by a number of third-party entities from 1999
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through 2007. The domain name had been in existence since 1995.
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As mentioned earlier, on January 9, 2007, Steve Jobs announced the production of the Apple iPhone at the Macworld
Conference and Expo. Although Apple’s iPhone shared the Cisco product’s name, there were numerous differences
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in the actual products. Cisco’s phone connected directly to online voice products such as Skype and Yahoo!
Messenger with Voice and allowed access to other media on the Internet. There were several models of the phone
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to connect with various messenger clients, and at least one of the products could be used as a landline as well.
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This contrasted with the phone produced by Apple. Apple’s product is a GSM (Global System for Mobile
Communications) cellular telephone with Bluetooth and Wi-Fi. It combines three products in one—a cellular phone, a
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widescreen iPod, and an Internet device with HTML e-mail and a desktop-class Web browser. Obviously, both
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products are phones with varying degrees of features, though one is VoIP enabled and the other is cellular in nature.
On January 10, 2007, one day after the Apple iPhone introduction, Cisco filed a lawsuit against Apple for trademark
infringement. After the announcement of the lawsuit by Cisco, Apple chose the tack most often advised in litigation
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strategies—it remained silent, with no public announcement, blog entry, or statement. Cisco, on the other hand,
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communicated its side of the story with the public via its general counsel’s blog. In pertinent part, that blog entry
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stated:
Fundamentally we wanted an open approach. We hoped our products could interoperate in the future. In our view,
the network provides the basis to make this happen—it provides the foundation of innovation that allows converged
devices to deliver the services that consumers want. Our goal was to take that to the next level by facilitating
collaboration with Apple. And we wanted to make sure to differentiate the brands in a way that could work for both
companies and not confuse people, since our products combine both web access and voice telephony. That’s it.
Openness and clarity.
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Cisco appeared to be attempting to position itself as looking to the future of telecommunications; the protection of the
brand was about the possibility of all phones (home, work, or cell) being able to work together in the future. Talks on
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interoperability apparently began in April of 2006, when Apple and Cisco began researching possibilities of its
products working together. Cisco argued that it did not want money for the license to use the name; rather, it simply
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wanted the Apple phone to work with Cisco products.
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Exhibit A shows a timeline of the relevant events leading up to and including the litigation between Apple and Cisco.
Table EXHIBIT A:.
iPHONE TRADEMARK TIMELINE
March 1996
InfoGear trademarks “iPhone”
2000
Cisco acquires InfoGear
2001
Apple negotiates with Cisco through 2006 tryi
acquire iPhone rights
March 27, 2006
Ocean Telecom iPhone trademark filed in Trin
& Tobago
May 4, 2006
Cisco files the Declaration of Use for iPhone m
in this 6th year
September 19, 2006
Apple files Intent to Use iPhone mark in Austr
based on 3/27/06 filing
September 22, 2006
Certificate of Formation for Ocean Telecom fi
Delaware
September 26, 2006
Ocean Telecom files Intent to Use application
USPTO for iPhone mark based on 3/27/06 filin
December 18, 2006
Cisco launches iPhone device
January 9, 2007
Apple launches iPhone device at Macworld
Conference & Expo
January 10, 2007
Cisco files lawsuit against Apple
February 21, 2007
Cisco and Apple settle lawsuit
July, 2008
Apple’s iPhone 2.0 software offers an option f
communicating with Cisco security appliances
February–May, 2010
B. Questions for Discussion
Having read the foregoing facts, students should be directed to some basic resources for
more information on trademark law. Using the facts above, the information in Exhibit A, and
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the resources available, students could be asked to consider the following discussion
questions.
•
1
Is the trademark “iPhone” distinctive enough to justify protection? Why or why not? Explain
under what category of trademarks this mark would be classified.
•
2
Which company, Cisco or Apple, properly acquired the iPhone trademark first? Reference
facts from the case to justify your response.
•
3
Did Cisco act properly in protecting the iPhone trademark after it acquired the trademark in
2000? Why or why not?
Apple expands its “iPhone” trademark protec
by filing for protection of “Made for iPhone” a
expanding the trademark to include handheld
electronic games.
•
4
Articulate an argument that Apple could make that it owns a “family of marks” for any
electronic or communication product which begins with the “i” prefix. Is it persuasive? Why or
why not?
•
5
How is this dispute complicated by international trademark treaties such as the Paris
Convention for the Protection of Industrial Property (Paris Convention) and the Madrid
Protocol? What are the policy issues at stake when the United States adopts treaties which
may conflict with the actions of U.S. companies?
•
6
What are the ethical issues at stake here? Did either company act unethically in attempting to
gain control of the iPhone trademark? Justify your conclusion.
•
7
In your opinion, which company should be granted the exclusive use of the iPhone trademark,
and why?
…
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