Apple’s Trademark Strategy: Use Now Pay Later

Like any true Apple junkie, I obsessively follow every move they make.  In my opinion, they are truly innovative and brand savvy!  And no Apple is not paying me to say that! LOL!

So I have been very interested in their trademark strategy.  On several occasions, Apple chose a trademark or brand name for one of their products and then discovers another company already owns the trademark.  Apple then negotiates to buy the name or negotiate a licensing fee to use the trademark.  At this juncture, choosing another trademark or brand name is not feasible because Apple has already spent considerable millions bringing the product to market.

For example, Apple announced the iPhone in 2007 and Cisco already owned the trademark, iPhone.  Cisco and Apple later worked out a deal in which both companies could use the iPhone trademark simultaneously without threat of trademark infringement litigation from either party.  I am sure Cisco is receiving a pretty hefty licensing or royalty fee from Apple for the use of the iPhone trademark.

Currently, Apple does not own the trademark,  iPad.  Fujitsu owns the trademark, iPad, for a mobile touch-pad devise that retail employees can use to check store prices for customers.  Fujitsu has asserted its ownership of the trademark and Apple has filed an international trademark application for the iPad trademark and is requesting additional time to challenge Fujitsu’s ownership to iPad.   There are also several other international companies that have valid trademarks for the mark, iPad, for a variety of products.  Some are tech related and some are not.

Trademark Legal Strategy

As a trademark attorney, I never advise my clients to chose a trademark for a product unless we first perform a comprehensive trademark search to ensure the trademark is not already taken.  If the trademark is relatively clear, then I advise my clients to submit an application with the USPTO and then begin development, manufacturing, marketing, etc.  It is a tremendous waste of money to begin the process of bringing the product to market without ensuring  trademark ownership is secured.  If a company uses Apple’s strategy they will either have to spend funds:  to purchase or license the trademark from the owner; fighting it out in court; or losing in court and having to spend additional dollars choosing another brand name.

Why Does Apple Chose Brand Names without Trademark Ownership?

I have two theories on why Apple chooses this strategy as opposed to the one I mentioned above.  Being a truly creative company, Apple may simply begin the creative process and forget to clue the attorneys in on what they are creating and want to bring to market before it is too late.  In most companies, the legal department is usually the last to know anything. Or maybe Apple already knows the trademarks are owned and decides to go with the product and negotiate later.  Of course, that gets into “willful and intentional” trademark infringement and I am by no means accusing Apple of anything of the sort.  But let’s face it, Apple has enough money to have a “sit down” with anyone.

Since Apple has already bought iPad to market and it is selling like hotcakes, Fujitsu has a lot of leverage regarding negotiation with Apple.  I am sure in a few weeks, we will hear that Apple and Fujitsu have reached an agreeable settlement and the details will not be disclosed.  When the announcement comes, I will make sure to report it.

About the Author
Latoicha Givens is the founder and a member of the firm Phillips Givens, LLC. Ms. Givens practice includes represention of start-ups, small, and mid-sized businesses in intellectual property matters, specficially, trademarks, copyrights, and licensing issues. She is the author of IPLAW101.com, a blog covering Intellectual Property issues specifically trademark law - trademark registration and infringement; Domain Name Disputes: Cybersquatting; Licensing and Intellectual Property issues in New Media.
See all posts by Latoicha Givens.