Does Apple have a case against Cisco?

What's the difference between a mobile phone and an Internet phone?

No, it's not a joke, it's precisely the question at the heart of the legal dispute over whether Apple will be allowed to use the iPhone name -- currently trademarked by Cisco -- for the new device unveiled at Macworld. Cisco sued Apple on Wednesday, claiming the iPhone violates a trademark Cisco acquired in 2000 and uses for a line of Internet phones.

There are a few avenues that Apple can pursue in defending itself against Cisco's lawsuit. But no matter what the company does, it is treading uphill because Cisco has a registered trademark with the US Patent and Trademark Office, according to lawyers interviewed on Thursday. "As a federal trademark holder, there are certain presumptions," said Grace Han Stanton, a trademark lawyer with Perkins Coie in Seattle.

Apple also apparently recognised the value of Cisco's trademark, as it started negotiating with Cisco for the rights to use the iPhone brand as early as 2001 and was involved in negotiations as late as Monday night, according to Cisco. Apple has declined to comment on its negotiations with Cisco.

One tack that Apple can take is proving that its iPhone is as different from Cisco's iPhone as Delta Air Lines is different from Delta Faucets, said David Radack, chair of the intellectual property department at the Pittsburgh law firm Eckert Seamans Cherin & Mellott. No one is going to call Delta Faucet looking for a round-trip ticket from San Francisco to New York, so two companies can use the same trademark if they don't confuse the other's customers, he said.

Preventing consumer confusion is one of the primary reasons for trademark law, Radack said. Courts must consider whether the average consumer would be flummoxed by the fact that a tap company and an airline share the same name. "Since the mark is the same, are the goods substantially different?" he asked.

This appears to be one facet of Apple's legal strategy, as one part of its statement on Thursday in response to the lawsuit read, "We're the first company ever to use iPhone for a cell phone". Any court taking up the Cisco versus Apple case would have to decide if voice over Internet Protocol (VoIP) phones are substantially different from mobile phones, and while some might consider a phone a phone, it's not clear cut, Radack said.

McDefense strategy
Apple can also argue that it owns a 'family' of trademarks related to the iPhone, said Craig Mende, a lawyer with trademark and copyright firm Fross Zelnick Lehrman & Zissu in New York. For example, the iPod, iTunes, iMac, iWork and iLife products all bear a strong association with Apple, so the company could argue that consumers would naturally associate the iPhone with Apple.

The most famous example of this strategy is used by McDonalds, which has successfully argued that any other company that attached 'Mc' to their product, like a McPhone, is creating consumer confusion that the McPhone is a McDonald's product. Even though you really shouldn't eat a phone, consumers would automatically associate McDonald's with anything using the 'Mc' prefix, Mende said.