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Will Apple iCloud suit affect its market release?

Phoenix-based voice-over IP provider iCloud Communications has filed a lawsuit against Apple claiming trademark infringement over the use of the name ?iCloud.?

The company's suit claims that because it used the mark iCloud first for cloud computing services that Apple?s proposed use of the same term for related services infringes upon its rights. Apple is likely to either fight back or pony up a licensing fee in order to be able to continue to use the term.

?As with all emerging industries, there is significant advantage to grabbing an early lead,? said Joseph Bowser, an attorney with Arent Fox LLC, Washington, DC. ?And since Apple is not likely to enter the fray without its iconic i, I expect Apple to fight ? and/or pay ? to keep using the iCloud mark.?

Last week, Apple unveiled its much-anticipated iCloud service, which will allow Apple customers to automatically upload and store data as well as push out content to all of their devices.

Because of Apple?s success with products like the iPad, iPhone and iPod, the new iCloud service is expected to be a force to be reckoned with. This includes its potential to boost the amount of data transversing already overworked mobile networks.

ICloud Communications provides voice over IP services. The company claims that the name ?iCloud? has quickly become associated with Apple rather than iCloud Communications given the worldwide media coverage of Apple?s launch of the service.

However, the company may have a hard time proving its case given Apple?s size as well as the history around the use of ?cloud? and ?i? in trademarks.

iLicense
?Apple?s ownership and the fame of its i-formative marks may help its chances of registration,? said Andrea L. Calvaruso, a partner at law firm Kelley Drye + Warren, New York.

?Unless the Plaintiff has an endless supply of capital to devote to legal expenses, I can only imagine the company?s objective in filing the lawsuit is to try to obtain money from Apple to assign its rights to the mark or obtain a consent agreement or other settlement,? she said.

This is not the first time that Apple has infringed another company?s trademark. When the company first started using the name ?Apple? it was sued by the Apple music company.

The parties reached a settlement that called for Apple to pay the music company a licensing fee and to not participate in the music business. Apple, of course, later entered the music business and was sued again.

Apple could be looking for a similar outcome here.

?Apple is taking a risk by adopting a name that is being used by another company,? said Adam Snukal, an attorney with law firm Reed Smith, Pittsburgh, PA. ?However, Apple has a long history of treading on other parties? trademarks, so this shouldn?t come as a complete surprise.

?Apple may, at the end of the day, say that because of the disproportionate leverages in place, it will agree to a licensing agreement,? he said. ?iCloud Communications may decide it is a lot easier to get a license out of Apple than to go to court with Apple.?

Generic term
Apple could also be taking the position that there are no rights in the name iCloud and has filed for trademark registration to hedge its bets.

Trademark law generally recognizes that words that generic terms such as soap or cloud are too descriptive and have no secondary meaning outside the word itself. They therefore cannot be trademarked.

?The trademark office might not let anybody hold the trademark for iCloud because it is too descriptive,? Mr. Snukal said.

?Apple could be taking the position that iCloud is a generic descriptor for these services and is not claiming any rights in it,? he said.

Apple may also fight on the basis that it has been using an ?i? in front of its trademarks for some time.

?Apple has a strong argument that based upon their longstanding use, widely successful advertising campaigns and unsolicited media regarding Apple products identified with i-formative marks, these marks have acquired secondary meaning such that the consumer has come to identify i-formative marks exclusively with Apple and therefore no one will confuse its use of the iCloud mark with Plaintiff or its goods or services,? Ms. Calvaruso said. 

Final Take
Chantal Tode, Mobile Marketer