Apple, Cisco agree to solve iPhone issue out of the court

Already fed-up with a long string of lawsuits, Apple Inc. on Wednesday agreed to solve its legal battle with Cisco Systems Inc. over the iPhone trademark out of the court, apparently going back at the bargaining table to solve the issue through negotiations.

In a joint statement, the two companies said they had agreed to give more time to Apple to respond to Cisco's lawsuit over the use of iPhone trademark in the court. During the extended time the companies can discuss trademark rights and interoperability and reach an agreement, the statement said.

Cisco, which makes routers and switches to link networks and power the Internet, last moth had accused iPod/Mac maker of copying and using Cisco's registered iPhone trademark intentionally.

San Jose, California-based networking equipment market leader filed suit against Cupertino-based Apple in the United States District Court for the Northern District of California for using iPhone trademark that is already obtained by Cisco.

Cisco lawsuit came merely a day after Apple launched its eagerly awaited cell phone-iPod-Internet communications device, called iPhone, at the annual Macworld conference and Expo in San Francisco on January 10.

According to the giant networking company, it succeeded in securing the iPhone trademark for itself after acquiring Infogear Technology Corp. Cisco took over Infogear, which specialized in Internet appliances and previously owned the trademark, in a stock deal worth US$301 million in 2000.

Infogear, which has sold iPhone products for several years, originally filed for the trademark on March 20, 1996. Cisco's Linksys division has been shipping a new family of iPhone products since early last year. It expanded the iPhone family on Dec. 18 by adding some more products to it.

The two companies had been in negotiations on trademark rights up until the day before Macworld, when Apple suddenly stopped talking, as per told by Cisco last month.

On the other hand, Apple has not said much about the issue. However, Apple’s spokeswoman Natalie Kerris called Cisco's lawsuit "silly," arguing that a number of companies are already using the name iPhone for voice over IP (internet protocol) products.

"We're the first company ever to use iPhone for a mobile phone. If Cisco wants to challenge us on it, we're confident we'll prevail," Kerris has said.

Cisco claims Apple's new gadget is "deceptively and confusingly similar" to its own line of wireless phones from Cisco's Linksys division, however, the computer company contends that it's entitled to use the name "iPhone" because its device operates over a cellular network, unlike Cisco's phones, which use the Internet.

Under federal law, two companies may share a trademark as long as their uses are not confusingly similar.

This is not the first time Apple has faced a lawsuit over trademark infringement, instead it was sued by Apple Corps, the Beatles' recording company, over its entry into the music business.