Professional Documents
Culture Documents
I. INTRODUCTION
In todays 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.2 Virtually every product we
purchase is protected by a trademark, a patent, and/or copyrights. Thus,
basic concepts of intellectual property are a natural component in any
business law or legal environment course.3
Assistant Professor of Business Law, University of Texas at Tyler; B.S., Texas A&M
University; J.D., Texas Tech University School of Law.
nn
Cecil B. Day Assistant Professor of Business Ethics and Law, Georgia Institute of Technology; B.A., Davidson College; M.S. (Information Systems), Dakota State University; J.D., University of Virginia School of Law.
Gordan Kelly, Nokias iPhone: We Copied Apple Says Company VP (Aug. 30, 2007), http://
www.trustedreviews.com/mobile-phones/news/2007/08/30/Nokias-iPhone-We-Copied-AppleSays-Company-VP/p1 (quoting Anssi Vanjoki, Nokia VP & General Manager of Multimedia,
on his companys plans to release new phone similar to the iPhone in 2008).
Robert C. Bird, This Buds for You: Understanding International Intellectual Property Law through
the Ongoing Dispute over the Budweiser Trademark, 23 J. LEGAL STUD. EDUC. 53, 84 (2006).
331
332
Case studies are often used in business law classes, utilizing real
or hypothetical fact patterns to help students identify and analyze real
business problems.4 One can find numerous case studies for use in
the classroom involving intellectual property issues.5 Cases can enhance
students analytical and reasoning skills6 as they are realistic scenarios
that bridge the gap between theory and fact.7 Students are most likely
to be engaged by a case and to put forth the effort required for its proper
analysis if they appreciate its relevance and timeliness.
With this in mind, what could be better than pulling an iPhone
out of your pocket and after demonstrating a few of its more captivating
features, proceeding to launch into a case study of the legal, ethical,
and business decisions required to put this phone in your hands?
Students are already very familiar with the iPhone and Apple,
Inc. (Apple), so the legal concepts are likely to resonate with them.8
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, both
of which could be distributed to students in a classroom setting. Part III
contains a Teaching Note with background information in basic trademark
law concepts and guidance to use the case in a business law or business
ethics class.
4
See, e.g., Jeffrey Pittman, Consumer Electronics v. Jones & Diamond: A Hypothetical Case Study, 29
J. LEGAL STUD. EDUC. 117 (2002).
5
See, e.g., Bird, supra note 3, at 1; Janell M. Kurtz & Drew Schuler, Competitive Intelligence
at Procter & Gamble: A Case Study in Trade Secrets, 21 J. LEGAL STUD. EDUC. 109 (2003); Margo E.
K. Reder, Case Study of Apple, Inc. for Business Law Students: How Apples Business
Model Controls Digital Content Through Legal and Technological Means, 26 J. LEGAL STUD. EDUC.
185 (2009).
6
333
Steve Jobs, Macworld Conference and Expo (Jan. 9, 2007), available at http://www.iphone
buzz.com/complete-transcript-of-steve-jobs-macworld-conference-and-expo-january-9-200723447.php.
10
InfoGear Technology Corporation, formed in 1995, primarily produced software and integrated circuits for Internet appliances. It was a privately-held company based in Redwood
City, California. Infogear Technology Corporation, BLOOMBERG BUSINESSWEEK, http://investing.
businessweek.com/businessweek/research/stocks/private/snapshot.asp?privcapId=29892 (last
visited Dec. 21, 2010).
11
12
Cisco Systems, Inc. sells Internet-protocol products and other products related to the communications and information technology industry, such as adapters, gateways, modems, software products, and IP (Internet-protocol) phones. It competes worldwide with other product
providers, including Apple. Cisco Systems, Inc., BLOOMBERG BUSINESSWEEK, http://investing.
businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=CSCO:US (last visited Dec.
22, 2010).
13
Scott Martin, Cisco files iPhone Suit, RED HERRING (Jan. 9, 2007), http://www.redherring.com/
Home/20673.
334
15
John Markoff, Cisco, Claiming Ownership of iPhone, Sues Apple, N.Y. TIMES, Jan. 10, 2007, at
C13, available at http://query.nytimes.com/gst/fullpage.html?res=9A03E4DA1230F932A
25752C0A9619C8B63.
16
Many first learned that Apple wholly owned Ocean Telecom after the dispute with Cisco
resolved and Ocean Telecom merged into Apple. Ocean Telecom Services, LLC Certificate of
Merger (Oct. 4, 2007) (on file with author).
17
An Intent to Use application must include a sworn statement that the applicant has a bona
fide intention to use the mark in commerce. The applicant must then begin actual use of the
mark in commerce before the USPTO will register the mark. See United States Patent and
Trademark Office, What Must the Application Include?, http://www.uspto.gov/trademarks/process/
appcontent.jsp (last visited Oct. 9, 2010).
18
19
335
20
21
22
Paul Miller, Cisco Might Have Lost iPhone Trademark in 06 (Jan. 13, 2007), http://www.engad
get.com/2007/01/13/cisco-might-have-lost-iphone-trademark-in-06.
23
Neeraj Saxena, Apple to Launch in June, May Alter Name. ECON. TIMES, Jan. 16, 2007, available
at http://economictimes.indiatimes.com/Cisco_to_launch_in_June_may_alter_name/articleshow/
1230622.cms Ciscos Declaration of Use (filed May 4, 2006) (on file with authors).
24
Id.
25
Holman Jenkins, Business World: iFoodfight, WALL ST. J., Jan. 17, 2007, at A18.
26
Id.
27
Id.
28
Id.
336
29
Id.
30
Martin Schwimmer, More Than Meets the iPhone, WORLD TRADEMARK REV., Mar.-Apr. 2007, at
44.
31
Anick Jesdanun, Speculators Grab iPhone Domain Names, ASSOC. PRESS FIN. WIRE (June 29,
2007), available at http://www.lexisnexis.com.
32
33
Apple Insider, Cisco Introduces iPhone Family of Devices (Dec. 18, 2006), http://www.apple
insider.com/articles/06/12/18/cisco_introduces_iphone_family_of_devices.htmll.
34
Id.
35
Apple Insider, News Flash: Apple iPhone Receives FCC Approval (May 17, 2007), http://www.
appleinsider.com/articles/07/05/17/news_flash_apple_iphone_receives_fcc_approval.html.
36
37
Markoff, supra note 15. See Complaint for Trademark Infringement, Unfair Competition,
False Description, and Injury to Business Reputation, Cisco Systems, Inc. v. Apple, Inc., No.
3:07-cv-00198-MHP (N.D. Cal. Jan. 10, 2007) available at http://news.findlaw.com/wp/docs/
apple/ciscoaap110007cmp.html.
337
announcement of the lawsuit by Cisco, Apple chose the tack most often
advised in litigation strategiesFit remained silent, with no public announcement, blog entry, or statement.38 Cisco, on the other hand, communicated its side of the story with the public via its general counsels
blog.39 In pertinent part, that blog entry 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 happenFit 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. Thats it. Openness and clarity.40
Apple filed several stipulations allowing it additional time to file a response, which allowed
Apple to negotiate with Cisco without ever filing a formal answer to the complaint. See Stipulation Regarding Time to Move or Plead in Response to the Complaint, Cisco Systems, Inc. v.
Apple, Inc., No. 3:07-cv-00198-MHP (N.D. Cal. Feb. 1, 2007) (on file with authors).
39
40
Mark Chandler, Update on Ciscos iPhone Trademark (Jan. 10, 2007), http://blogs.cisco.com/
news/comments/update_on_ciscos_iphone_trademark/.
41
Ken Mingin, Cisco Sues Apple over iPhone Trademark, COMPUTER WORLD (Jan. 10, 2007),
http://www.computerworld.com/action/article.do?, command=view articleBasic&articleId=
9007798&pageNumber=1.
42
Apple, Cisco Try to Make iPhones Compatible, BLOOMBERG NEWS (Apr. 17, 2007), http://seattlepi.
nwsource.com/business/312022_ciscoapple18.html.
43
Victoria Shannon, Cisco Systems Chief Executive Calls Apple Lawsuit a Minor Skirmish, INTL
HERALD TRIB., Jan. 27, 2007, http://www.iht.com/articles/2007/01/24/business/cisco.php.
338
44
Instructors might direct students to the resources found at U.S. Patent & Trademark Office,
http://www.uspto.gov; Lanham Act, 15 U.S.C. 11141127; Madrid Protocol Implementation Act, 15 U.S.C. 1141 et seq.; and World Intellectual Property Organization, http://
www.wipo.int/trademarks/en/.
339
45
46
Darren Charters et al., Using the Case Study Approach to Challenge Students in an Introductory
Business Law Course, 26 J. LEGAL STUD. EDUC. 47, 52 (2009).
340
A. Relevant Law
1. Timing of Use/Registration
The creation of a proper trademark allows a company to develop and
maintain an identity distinct from that of its competitors. It is also a tool
that allows consumers to identify products of various manufacturers.47
This is the core issue at stake in the iPhone trademark dispute between
Cisco and Apple. According to the Lanham Act, trademark law protects a
word, name, symbol, or device used to identify the source of a good and
distinguish it from the products of another.48 In practice, anything capable
of communicating with consumers can be considered a trademark, which
would also include slogans, colors, designs, product configurations, and
packaging.49
Trademark rights can be acquired by being the first person to use
the mark in commerce or being the first to register the mark with the
USPTO.50 While unregistered trademarks are governed by common law,
where priority is given to the first to use the mark in a commercial transaction,51 registered trademarks must be filed with the USPTO. The Lanham Act states that registration is prima facie evidence of the validity of
the registered mark . . ., of the registrants ownership of the mark, and of
the registrants exclusive right to use the registered mark.52 It effectively
47
48
49
50
15 U.S.C. 1127(a).
51
Emergency One, Inc. v. Am. Fire Eagle Engine Co., 332 F.3d 264, 267 (4th Cir. 2003).
52
15 U.S.C. 1057(b).
341
prevents others from using the trademark in connection with the sale,
offering for sale, or advertising of goods, in a way that is likely to cause
confusion.53 Specifically, benefits of registration include (1) the right to
use the mark nationwide (subject to preexisting use of the mark in a particular geographic region);54 (2) nationwide constructive notice to others
that the party owns the trademark; (3) the ability to bring an infringement
suit in federal court;55 and (4) the potential to recover treble damages,
attorneys fees, and other remedies. Additionally, after five years, the mark
can become incontestable, at which point the exclusive right to use the
mark is conclusively established.56 One may also register the mark with the
state; although this does not provide the same benefits as federal registration, it does provide notice to others.
In order to serve as a trademark, a mark must be distinctive, meaning
it must be capable of identifying the source of a particular good or distinguishing the applicants goods from those of others.57 The distinctiveness
of a mark is its power to identify the source of a product.58 To determine
the level of distinctiveness necessary for protection, the courts divide
marks into five categories, based upon the relationship between the mark
and the underlying product: (1) arbitrary, (2) fanciful, (3) suggestive,
(4) descriptive, or (5) generic.59 An arbitrary or fanciful mark bears no
logical relationship to the underlying product and is considered inherently
distinctive.60 A suggestive mark suggests a characteristic of the underlying
good and it too is inherently distinctive.61 A descriptive mark is one that
directly describes a characteristic of the underlying product. It is not
protectable unless it has acquired secondary meaning, meaning the consuming public primarily associates the mark with a particular producer as
53
15 U.S.C. 1114(1)(a).
54
15 U.S.C. 1072.
55
15 U.S.C. 1121.
56
15 U.S.C. 1065.
57
15 U.S.C. 1052.
58
Time, Inc. v. Petersen Publg Co. L.L.C., 173 F.3d 113, 117 (2d Cir. 1999).
59
See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F. 2d 4, 9 (2d Cir. 1976).
60
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).
61
Id.
342
62
63
64
15 U.S.C. 1114. See also Time, Inc. v. Petersen Publg Co. L.L.C., 173 F.3d 113, 118 (2d Cir.
1999) (stating that the test for infringement is the likelihood of consumer confusion as to the
source of the allegedly infringing product.). Trademark infringement may also be found when
the commercial trademark use is likely to cause initial interest confusion, even if that confusion
is dispelled at the time of purchase. John Handy, Note, Why the Initially Confused Should Get a
Clue: The Battle Between Trademark Infringement and Consumer Choice Online, 16 FORDHAM INTELL.
PROP. MEDIA & ENT. L.J. 567, 57677 (2006).
65
U-Haul Intl, Inc. v. WhenU.com, Inc., 279 F. Supp. 2d 723, 727 (E.D. Va. 2003).
66
343
mark.67 Although there is some disparity among the circuit courts, four
factors are common to the circuits in assessing likelihood of confusion: the
similarity of the marks, the proximity of the goods, evidence of actual
confusion, and the strength of the plaintiff s mark.68
Given the documents filed with the USPTO by Cisco, the iPhone
mark was being used in commerce. Although Ciscos use in commerce may
not have been substantial enough to cause much actual confusion, the
iPhone mark was placed on a box and offered for sale in the marketplace.
Apple clearly used the mark in commerce as soon as Steve Jobs announced
the launch of the iPhone at the Macworld Conference and Expo in early
2007. Even though the mark was used in commerce, it may be tougher for
students to determine whether there was a likelihood of confusion.69 While
the marks were identical and the goods were very similar, there would be
little evidence of the strength of Ciscos mark. Students could further discuss how the court would analyze evidence of actual confusion using the
four factors outlined above. Finally, students could discuss the strength of
the iPhone mark, a point addressed later in this case.
2. Diligence in Protecting Mark
Exploring this issue underscores the importance of following the procedure established in the trademark registration process. Understanding the
nuances of this process gives students an opportunity to debate the intent
of the law versus the letter of the lawFespecially given the sample submitted by Cisco for its Declaration of Use.
A trademark owner in the United States is required to submit a Section 8
Declaration of Continued Use in the sixth year of the registration term.70 The
Section 8 affidavit can state either (1) that the owner is using the mark or (2)
the owner is not using the mark for good reason.71 At the same time, a
67
Gruner1Jahr Publg v. Meredith Corp., 991 F.2d 1072, 1077 (2d Cir. 1993).
68
Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark Infringement, 94 CAL. L.
REV. 1581, 1589 (2006).
69
Consumer surveys are typically used in litigation to show confusion. K. J. Greene, Abusive
Trademark Litigation and the Incredible Shrinking Confusion Doctrine Trademark Abuse in the Context
of Entertainment Media and Cyberspace, 27 HARV. J.L. & PUB. POLY 609, 620 (2004).
70
71
Id.
344
trademark owner can, but is not required to, file a Section 15 Declaration of
Incontestability, claiming incontestable rights in the mark based on the
continuous use of the mark for the past five years.72 Cisco had to file a
Declaration of Use the sixth year of the registration term, in 2006, stating
that the owner was still using the mark.73 As stated in the case, when Cisco
filed the Declaration of Use, it apparently sent in a picture of a cordless
Internet phone with an iPhone sticker affixed to the box.74 As reported in
the Wall Street Journal,
Cisco may have failed to meet a six-year deadline to show it was making use of
the trademark. Cisco did submit something just before an additional six-month
grace period ended, butFaccording to ZDNet, which backs up its report
with a photoFthe filing consisted of slapping an iPhone sticker on a box for its
Linksys Cordless Internet Telephony Kit.75
It should also be noted that Cisco could not file the optional Section
15 Declaration of Incontestability, despite the important statutory benefits
it would bring, because the iPhone mark was not continuously used in
commerce for the requisite time period.76 Examination of this issue can
lead students to a greater understanding of the underpinnings of U.S.
trademark law. A critical requirement of trademark protection is that the
mark be used in commerce. The actions of Cisco raise some issues that will
allow the class to see real-life application of this trademark law principle.
As discussed in the case, InfoGear Technologies first acquired and
used the iPhone trademark in 1996.77 It should be noted, however, that
after buying InfoGear in 2000, Cisco did not actually use the iPhone
trademark until late 2006.78 Furthermore, the release of this product followed many discussions with Apple about licensing the trademark.79 But
72
15 U.S.C. 1065.
73
Miller, supra note 22. The Declaration of Incontestability is conclusive evidence of the
validity of a registered mark and the owners exclusive right to the use the mark. The
standard is higher and provides more protection than the Section 8 Declaration of Continued
Use.
74
75
76
77
78
Id.
79
Id.
345
Cisco claimed it had been shipping InfoGears iPhone until it launched the
Linksys product under the same name.80
Ciscos conduct (or lack thereof) brings up the issue of trademark
abandonment. Pursuant to 15 U.S.C. Section1127, a trademark is deemed
to be abandoned when, its use has been discontinued with intent not to
resume such use.81 Once a mark has been abandoned, another person
can seize the trademark and establish a right to use the mark under trademark priority laws.82 To win on this issue, Apple would need to demonstrate, non-use of the name by the legal owner and no intent by that
person or entity to resume use in the reasonably foreseeable future.83
Furthermore, three years of consecutive nonuse would constitute prima
facie evidence of abandonment.84 This presumption would place a burden
on the owner of the mark (Cisco) to produce either evidence of actual use
during the period or intent to resume use.85
Closely related to the use in commerce requirement of trademark law
is the fact that a trademark owner bears the burden of policing the use of
its mark by others.86 The facts in this case allow the instructor to question
the students about whether Cisco truly sought enforcement of the rights
granted to it via the U.S. trademark law system or was lackadaisical in its
enforcement.
Prior to the lawsuit with Apple, Cisco had apparently failed on several
occasions, against several different entities, to protect its trademark for the
iPhone. At least four other companies, including two in the United States,
were using the iPhone trademark to market various products.87 The
80
Tom Krazit, How Apple Could Fight Cisco (Jan. 12, 2007), http://news.cnet.com/2100-1041_36149755.html.
81
82
Emergency One, Inc. v. Am. Fire Eagle Engine Co., 332 F.3d 264, 268 (4th Cir. 2003).
83
Stetson v. Howard D. Wolf & Assocs, 955 F.2d 847 850 (2d Cir. 1992).
84
15 U.S.C. 1127.
85
Cerveceria Centroamericana SA v. Cereveria India Inc., 892 F.2d 1021 at 1026 (Fed. Cir.
1989).
86
Levin, Elizabeth K. Note: A Safe Harbor for Trademark: Reevaluating Secondary Trademark Liability After Tiffany v. eBay, 24 BERKELEY TECH. L.J. 491, 518 (2009).
87
346
presence of the mark in other countries and for other products and services arguably shows a lack of initiative on Ciscos part to protect the mark.
Another interesting point raised by this case is the critical concept of
consumer confusion. This is the key determinant of liability in a trademark
infringement suit, and the issue is not clear-cut in this case. The instructor
may question the students about how closely related the two products are
and if this proximity (or lack thereof) would lead to consumers being confused. The legal issue of the relatedness of the goods is a subset of likelihood of confusion from a consumers perspective. Apples argument would
be that Apples iPhone is so different and distinct from Ciscos product that
consumers would not be confused as to the source of each good.88 The
clearest example of this is Delta faucets and Delta airlines; one is likely
aware of both trademarks but the likelihood of consumer confusion is
exceedingly low. With the iPhone, both products are phones, though one is
VoIP enabled and the other is cellular in nature. Clearly there is not the
level of distinction presented in the Delta trademark example, but where it
falls along the spectrum is not absolutely clear.89 On balance, this argument
would likely lean toward Ciscos position as both products are phones. But
creative students may present arguments to the contrary.
While all the aforementioned issues could be argued by Apple, one
last nuclear option would remainFthe argument that the iPhone mark
was generic. The generic argument permits the instructor to cover various aspects of trial strategy from Apples perspective. The instructor could
tie this issue back to the five categories of trademark law generally and
discuss the concept of genericide, whereby an entity loses ownership
of a trademark because of how it is viewed by consumers.90 This would
88
89
The Supreme Court ruled that Victor and Cathy Moseleys use of the mark Victors Little
Secret in a retail store for lingerie, adult videos, and sex toys in Kentucky did not dilute the
Victorias Secret trademark without proof of harm. Moseley v. V. Secret Catalogue, Inc., 537
U.S. 418, 423 (2003). However, other courts have ruled that there was infringement for use of
identical marks for different goods. See J. Thomas McCarthy, Symposium: Trademark in Transition: Institute for Intellectual Property & Information Law Symposium: Proving a Trademark Has
Been Diluted: Theories or Facts?, 41 HOUS. L. REV. 713, 72122 (2004) (Bacardi jewelry was an
infringement of Bacardi rum; Jaguar perfume was an infringement of Jaguar autos; and K2
cigarettes conflicted with K2 skis).
90
A mark may begin as fanciful and protected and drop to the lowest level, generic, through
the process of genericide. See Deven R. Desai & Sandra L. Rierson, Confronting the Genericism
Conundrum, 28 CARDOZO L. REV. 1789, 1810 (2007).
347
91
Antone Gonsalves, Apple Unlikely to Go to Trial Over iPhone Trademark Suit, EE TIMES ASIA (Jan.
15, 2007, available at http://www.eetasia.com/ART_8800449314_499488_NT_64893680.
HTM.
92
93
94
Apple Insider, Cisco Introduces iPhone Family of Devices, supra note 33.
95
Id.
348
See, e.g., Apple Computer v. TVNET.net, Inc., 2007 TTAB LEXIS 80 (2007) (denying
application of TVNET.net to register the mark VTUNES.net for digital music video internet
downloads because of likelihood of confusion or dilution of ITUNES and ITUNES MUSIC
STORE).
97
See J&J Snack Foods Corp. v. McDonalds Corp., 932 F.2d 1460 (Fed. Cir. 1991).
98
Id. at 1462.
99
Id. at 1463.
100
103
Id.
349
104
Id.
105
Id. at 45.
106
Jennifer LeClaire, Cisco Dials Apple in iPhone Trademark Spat, NEWSFACTOR (Feb. 16, 2007),
http://www.newsfactor.com/news/Cisco-Dials-Apple-in-iPhone-Spat/story.xhtml?story_id=100005
SGP7O0&full_skip=1.
107
Ameritech, Inc. v. Am. Info. Tech. Corp., 811 F.2d 960 (6th Cir. 1987).
108
350
109
Paris Convention for the Protection of Industrial Property art. 6 (2), Mar. 20, 1883, 21
U.S.T. 1583.
110
Id.
111
112
15 U.S.C. 1141d-e.
113
15 U.S.C. 1141h.
114
15 U.S.C. 1141i.
115
15 U.S.C. 1141f.
351
mark in Trinidad and Tobago. When both companies filed for extension of
protection of the respective marks with the USPTO, they were nearly
guaranteed extension of registration under the Madrid Protocol, and the
Paris Convention allowed the grant of trademark protection to date back to
the respective filings in Australia and Trinidad and Tobago. These provisions arguably allowed Apple and Ocean Telecom to bootstrap the
iPhone mark to a filing date (as early as March 2006) and place which
may have been unknown to Cisco.
B. Ethical Issues
This case provides the instructor with a vehicle for extending the discussion beyond a narrow focus on the law and to introduce the students to
the intertwined concepts of business and ethical concerns. Students should
be asked to posit the best business and ethical arguments that both Cisco
and Apple could put forth. The instructor could then question the viability
of these positions from legal, business, and ethical angles, in order to
encourage critical thinking.
Different ethical schools of thought give appropriate perspectives from which to argue for and against the actions taken by both
Apple and Cisco. While the application of numerous ethical theories is
possible,116 it is not necessary for the instructor to utilize all of them
in order to engender vibrant student discussion of the issues. Two schools
of ethical thought relevant to this case are utilitarianism and natural
rights theory.
1. Utilitarianism
Utilitarianism posits that actions are moral in proportion as they tend to
promote happiness and wrong as they tend to produce the reverse of
happiness.117 This is often understood as advocating a position that promotes the greatest amount of good for the greatest number of people. The
ethical theory is applicable to trademarks because the protection of commercial trademarks promotes the greatest amount of good consequences
116
See Wade M. Chumney & Tammy W. Cowart, iEthics, 93 J. BUS. ETHICS 471, 475 (2010)
(providing an ethical analysis of Apple and Ciscos trademark dispute via the additional perspectives of justice theory and stakeholder analysis).
117
352
118
D. B. Resnik, A Pluralistic Account of Intellectual Property, 46 J. BUS.ETHICS 319, 324 (2003)
(noting that social utility is maximized by providing trademark holders with incentives and
reward, which encourage the development of industry).
119
120
Edwin C. Hettinger, Justifying Intellectual Property, 18 PHIL. & PUB. AFFAIRS 31, 48 (1989).
121
Id.
122
Three years of consecutive nonuse constitutes prima facie evidence of trademark abandonment. 15 U.S.C. 1127.
353
While this theory could be used to examine many facets of this case,
utilizing it to analyze the consumers perspective is particularly interesting.
One could argue that Cisco put forth the effort to acquire InfoGear and
obtain rights to the iPhone mark. While InfoGear put forth the initial labor
required to create the mark, through independent knowledge and effort,
Cisco came to be the rightful owner of the mark and should thus be able to
utilize it as the company sees fit.
Alternatively, if the marketplace presumes that the newest product developed by Apple would bear the i prefix to its mark, does Apple have
some moral high ground for the mark? Consequently, should Apple, and
not Cisco, reap the benefits of creating goodwill and consumer recognition in
the iPhone, part of the i-family of marks?125 One could argue whether
Cisco anticipated this very thing when it purchased InfoGear and the iPhone
mark in 2000. From an ethical standpoint, the issue may be whether Cisco
had some obligation to tender the mark to Apple when the company was
approached beginning in 2001. This responsibility would arguably flow from
the divergent approaches taken by the two companies in the marketplace. As
discussed earlier, Apple affirmatively labored in the marketplace to create
consumer goodwill toward the i family of marks. Contrarily, Cisco acquired
the iPhone mark but did nothing in the marketplace in order to create a
product for consumers. Thus, from a Lockean natural rights view, one could
argue that Apple had the stronger claim the iPhone mark.
123
Benjamin G. Damstedt, Limiting Locke: A Natural Law Justification for the Fair Use Doctrine,
112 YALE L.J. 1179, 1179 (2003).
124
JOHN LOCKE, SECOND TREATISE OF GOVERNMENT 11 (J. Bennett ed., 2008), available at http://
www.earlymoderntexts.com/pdf/locke2tr.pdf.
125
See Paul Steidlmeier, The Moral Legitimacy of Intellectual Property Claims: American Business and
Developing Country Perspectives, 12 J. BUS. ETHICS 157, 160 (1993).
354
IV. RESOLUTION
OF
CASE
AND
CONCLUSION
Cisco ultimately extended negotiations with Apple twice so that the two
companies could resolve the dispute.126 Cisco and Apple finally settled the
lawsuit and obviated the need for trial on February 21, 2007.127 Cisco appeared willing to allow Apple to use the iPhone mark if Apple was willing to
allow both companies phones to communicate with each other.128 The
areas of interoperability to be explored were thought to include security,
consumer, and business communications.129 Little was expected from the
settlement; while Apple may have considered interoperability on some of
its lower-profile products, Apple was not expected to open up any of its
proprietary technology to outside devices any time soon.130 Many believed
that money had more of a role in the settlement than either company
stated.131 A few months after the settlement, on October 4, 2007, Ocean
Telecom Services, LLC was merged into Apple via a Certificate of Merger.
In 2008, Apples iPhone 2.0 software offered an option for communicating
with Cisco security appliances, so perhaps there was some gain for Cisco in
forcing the iPhone trademark issue with Apple. However, Apple has not
changed its proprietary stance on protecting its intellectual property interests. In the spring of 2010, Apple filed for trademark protection of
Made for iPhone and expanded the current iPhone trademark to include handheld electronic games.132 Apples recent attempt to trademark
126
Cisco Extends iPhone Talks with Apple Until Feb. 21, AM. INTELLIGENCE WIRE (Feb. 16, 2007),
http://www.accessmylibrary.com/coms2/summary_0286-29659340_ITM.
127
Steve Donohue, Apple, Cisco Call iPhone Truce, MULTICHANNEL NEWS (Feb. 22, 2007), http://
www.multichannel.com/article/CA6418736.html.
128
129
Brad Stone, Settlement with Cisco Lets Apple Keep iPhone Name, INTL. HERALD TRIB., Feb. 22,
2007, http://www.iht.com/articles/2007/02/22/business/cisco.php.
130
131
Id.
132
Vlad Savov, Apple Locks Down iPhone Trademark, Includes Electronic Games Category, ENGAD(Feb. 14, 2010, 12:29 p.m.), http://www.engadget.com/2010/02/14/apple-locks-downiphone-trademark-includes-electronic-games-category; Jack Purcher, Apple Files Made for
iPhone Trademark, PATENTLY APPLE (May 5, 2010), http://www.patentlyapple.com/patentlyapple/2010/05/apple-files-made-for-iphone-trademark.html.
GET
355
the term App Store has been challenged by Microsoft as being too
generic; the dispute is pending with the USPTO.133
The iPhone case presents many issues that give students an opportunity to engage in legal, ethical, and business analyses of these concepts.
The instructor can use this case for a basic analysis of trademark rights and
filing, a more complex analysis of international treaties, or the ethics of a
companys efforts to protect its intellectual property. Whether used in a
business law, legal environment or business ethics course at the undergraduate or graduate level, this is a case where both companies have credible arguments. Thus, various perspectives can be taken by the students,
allowing them to engage in high-level critical thinking. By utilizing the
popular iPhone as the focal point for these issues, an instructors task of
motivating students to think, participate and learn critical-thinking skills in
the classroom can be greatly enhanced.
133
Jennifer Valentino-DeVries, Should Apple Get to Trademark App Store? Microsoft Says No,
DIGITS WALL ST. J BLOG, (Jan. 25, 2011, 10:49 p.m.), http://blogs.wsj.com/digits/2011/01/12/
should-apple-get-to-trademark-app-store-microsoft-says-no/.