Apple IPhone Spat Reaches Canada With Comwave Claims (Update1)
By Chris Fournier and Susan Decker
Jan. 25 (Bloomberg) -- Apple Inc.'s fight for the iPhone name has moved north of the U.S. border because a small company laid claim to the trademark in Canada.
Comwave Telecom Inc. has used the iPhone brand since 2004 to sell Internet phone service to its customers, and filed documents opposing Apple's motion to take the name, President Yuval Barzakay said in an interview yesterday. His closely held company has about 100 employees.
The dispute expands Apple's legal woes over the brand, which Cisco Systems Inc. claims to have trademarked in the U.S. The spat also may lead to delays in getting the phone to Canadian consumers. Apple, which wants to introduce it in the U.S. in June, hasn't announced plans for a Canadian version.
``It's a crucial brand for us,'' said Barzakay, 36. He declined to say how many customers the Toronto-based company has or disclose its revenue. ``Our legal folks believe we're certainly in the driver's seat.'' Until Apple offers the iPhone in Canada, Comwave has no reason to claim damages, he said.
Apple has ``nothing to announce at this time'' about plans to sell the phone in Canada, according to spokesman Tom Neumayr. He declined to comment further.
Comwave may have the upper hand in a trademark dispute if Canada's intellectual property office agrees with the company's first-use claim, even though Apple filed an application for the rights to the name first, according to Ottawa trademark lawyer Marcus Gallie, who isn't involved in the proceedings.
``If I were a really aggressive lawyer for Comwave, I'd be out suing Apple,'' said Gallie, who practices with Canadian law firm Ridout & Maybee. ``Apple's got to know what they're up against.''
No Canadian Plans
Apple, based in Cupertino, California, announced plans for the iPhone this month. The device combines the iPod and a cell phone with Internet browsing. The iPhone will cost $499 for a 4- gigabyte version and $599 for 8 gigabytes.
Cisco, the world's biggest maker of computer networking equipment, sued Apple over the name Jan. 10. Cisco obtained the U.S. trademark when it purchased Infogear Technology Corp. in 2000, which sought protection for the name in 1998.
Apple shares fell 45 cents to $86.25 at 4 p.m. New York time in Nasdaq Stock Market trading. Cisco stock fell 67 cents to $26.22.
Comwave also may sue San Jose, California-based Cisco for promoting the brand in Canada, Barzakay said. Cisco spokesman John Noh, who confirmed that the company's iPhone is available for sale in Canada, declined to comment on potential suits. Cisco's iPhone is designed for Internet calling.
Apple applied to use the name in October 2004, according to the Canadian Intellectual Property Office's Web site. Comwave, which has operated since 2000, filed an opposition to the application in August 2005, and then filed its own application in November 2005.
Blocking Apple?
Even though Comwave's application was later than Apple's, Comwave may win any dispute if it can prove it has used the name since June 2004, and Comwave could get a court to block Apple from using name based on that, Gallie said.
UBS AG analyst Benjamin Reitzes predicted in a note to clients after the iPhone was introduced that Apple would sell 7.4 million of the gadgets in fiscal 2008. That prompted the New York-based analyst to raise his estimate of Apple's earnings per share for that year by 6.9 percent to $3.58. Reitzes ranks second-highest among computer analysts, according to Institutional Investor.
The U.S. case is Cisco Systems Inc. v. Apple Inc., 07-198, U.S. District Court for the Northern District of California.
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