Monday, June 13, 2011

Trademark Lawsuit Challenges Apple's iCloud Name

The lawyers have come out again, this time in a challenge to the iCloud name Apple gave its cloud-storage service. iCloud Communications, a VoIP provider, has sued Apple for trademark infringement. But battling behemoth Apple could bankrupt iCloud Communications, so the company is expected to accept a cash settlement.

About a week. That's how long it took for a lawsuit against Apple to emerge in the wake of its iCloud announcement at the Worldwide Developers Conference.

iCloud Communications, a Voice over Internet Protocol company, filed suit against Apple in the U.S. District Court of Arizona. The suit alleges that Apple is infringing on its trademark with the new iCloud service Relevant Products/Services, along with unfair competition and injury to the VoIP company's business Relevant Products/Services reputation.

In its suit, iCloud Communications is asking the court for a preliminary and permanent injunction against Apple, as well as undisclosed monetary damages and attorneys' fees. iCloud Communications claims Apple's iCloud has similarities with some of the services it provides.

Injured iCloud?

"The goods and services with which Apple intends to use the 'iCloud' mark are identical to or closely related to the goods and services that have been offered by iCloud Communications under the iCloud marks since its formation in 2005," the suit reads.

"However, due to the worldwide media coverage given to and generated by Apple's announcement of its 'iCloud' services and the ensuing saturation advertising campaign pursued by Apple, the media and the general public have quickly come to associate the mark 'iCloud' with Apple, rather than iCloud Communications."

Apple's iCloud is a set of free new cloud Relevant Products/Services services that work with applications on the iPhone, iPod touch, and Mac or PC Relevant Products/Services to automatically and wirelessly store Relevant Products/Services content and push it to devices. The free iCloud services include the former MobileMe, App Store and iBookstore, iCloud Backup, iCloud Storage, Photo Stream, and iTunes.

Settling Like Cisco

Apple couldn't immediately be reached for comment, but Rob Enderle, principal analyst at the Enderle Group, said there is an assumption that iCloud Communications will do what Cisco Systems did in its iPhone trademark suit against Apple in 2007: Work out a deal.

"Apple is crossing over into somebody else's space, and that business has a right to defend its brand," Enderle said. "I'm sure Apple can come up with an amount that keeps this firm happy and if the firm decides to hang Apple out to dry, they will figure out that litigating against Apple is an incredibly expensive and time-consuming process."

Indeed, Apple could put the much smaller iCloud Communications out of business with a long legal battle. Enderle suspects iCloud Communications will settle for a reasonable sum and walk away with a nice check rather than fighting Apple and perhaps getting a bigger check long after the company has gone bankrupt.

"The brand is worth something, and iCloud Communications will get something more than what the brand would have been legitimately worth if Apple didn't take the name. That is the way the world should work," Enderle said. "You shouldn't be denied the use of something at any price or be held ransom by someone who took a name first. It's got to be balanced."

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