iPhones In Harmony, For Now

Arik Hesseldahl

Well that certainly didn't take long. Word came last night from Apple and Cisco Systems that they had settled their dispute over the use of the iPhone name on their respective product lines bearing it. Cisco's claim, you'll recall, stems from its acquisition of a forgotten little company called Infogear that launched a combined land line phone and Internet appliance in the late 1990s that bore the iPhone name.

The settlement agreement itself is a bit of a head-scratcher though. The press release says that "both companies are free to use the 'iPhone' trademark on their products throughout the world," and that 'both companies acknowledge the trademark ownership rights that have been granted.' Essentially I think this means they're agreeing to share the rights to the name, and to proceed using it as they see fit going forward.

But I wonder what the limitations are on each company's use of the name. Cisco wants to use it on IP-based handsets aimed at the home, like this one. Apple wants to use it on a wireless phone and Internet device. It looks a little like the old trademark-sharing arrangement that Apple had with the Beatles back in the early days. In that case, Apple Computer agreed to use the name for non-musical uses, while Apple Corps. had all rights pertaining to music. Intellectual property lawyers call this sort of thing limiting the field of use.

But we all know how that turned out. The Beatles and Apple ended up in court a few times over the course of nearly three decades mainly because of changing market conditions that put Apple at risk of breaching the original agreement. Finally, as we reported on 5 Feb., Apple is now the sole owner of the Apple trademark, and has given Apple Corps a license to use it.

As the example with The Beatles shows, fields of use have a way of blurring and overlapping over time. When personal computers first appeared in the 1970s, no one envisioned they'd become as central to personal entertainment as they are today, let alone guessed that Apple might one day become a leading music retailer.

I'd argue that the fields of use between IP telephony and wireless phones are blurring so fast that soon you'll rarely know which one you're using. A future version of Apple's iPhone -- say one that supports the super-fast wireless technology known as HSDPA -- could easily run software for making calls over Internet-based calling systems like Skype or The Gizmo Project. They're already available on wireless phone/PDA devices now. Meanwhile, what's to stop Cisco to jointly developing a handset with someone like Motorola or Nokia that jumps effortlessly from making an Internet call when connected to a Wi-Fi hot spot to the wireless phone networks without the caller even knowing the change in connection has been made. That technology is coming, and given Cisco's expertise and the way its been playing up the strategic importance of IP calling in the home and office, I'd have to wonder if the deal between them limits to allows Cisco to use the iPhone name on just such a product.

Somehow, it seems me that this won't be the last time Apple and Cisco wrestle over the rights to the iPhone trademark.