Apple, Cisco settle iPhone spat

Apple and Cisco Systems today said they had settled their disagreement over the iPhone trademark, which Apple is applying to its new iPod Phone and which Cisco claims is already in use in product lines.

Instead of one company taking over the product name, however, they are both planning to use the iPhone name, Cisco for its Linksys VoIP handset and Apple for its consumer-oriented music smartphone. “Both companies acknowledge the trademark ownership rights that have been granted, and each side will dismiss any pending actions regarding the trademark," the companies said in a joint statement.

Apple announced the iPhone at the Consumer Electronics Showcase in January, setting off a media deluge over the highly anticipated handset. Apple had already ventured into the wireless space, signing an agreement with Motorola to develop phones with the iTunes operating system embedded, but the lackluster devices didn’t have the robust capabilities of an iPod. Apple, however, rectified that problem with the iPhone, which not only stores between 4 GB and 8 GB of music but contains advanced data functions based on a new Mac OS for the handheld.

After announcing the launch though, Cisco immediately filed a lawsuit claiming ownership of the iPhone trademark, which it acquired when it purchased Infogear in 2000. Since then the companies have been in negotiations, which resulted in today’s compromise though neither company released the exact terms of the deal. It was expected, though, that Apple has to pay royalties for the use of the iPhone trademark.