Apple likely to settle iCloud trademark lawsuit, says legal expert

Arizona company iCloud Communications takes Apple to federal court

An Arizona company sued Apple in federal court last week over the "iCloud" trademark, court documents show.

One legal expert said Apple would likely settle the case for cash.

iCloud Communications, a Phoenix-based provider of VoIP (voice over Internet) and other online services, claimed in a complaint filed Friday that Apple is treading on the trademark it's been using for several years.

"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 a company's filing stated. "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."

iCloud charged Apple with unfair competition, trademark infringement under Arizona law and injury to its business reputation, and asked the federal court to block Apple from using the iCloud mark "or any Internet domain name .... confusingly similar to iCloud Marks."

Earlier this year, Apple acquired the "" domain from Swedish company Xcerion. iCloud Communications uses the domain "" for its Web site.

Apple CEO Steve Jobs unveiled his company's iCloud service last week during the opening keynote of the Worldwide Developers Conference (WWDC), where he talked up the new free online sync and storage service that for most users will replace the three-year-old MobileMe.

At first glance, it may seem Apple has the edge with the iCloud trademark. Last week it registered 11 applications with the U.S. Patent and Trademark Office (USPTO), and has acquired the already-existing U.S. trademark formerly registered to Xcerion.

Meanwhile, iCloud Communications has not registered the "iCloud" trademark with USPTO, according to searches of the agency's database.

But that doesn't prevent iCloud from taking its complaint to court, or even winning, a legal expert said today.

"Although a trademark registration does give you additional rights, there are also what are called 'common law rights,'" said Brad Salai, a partner with Harter Secrest & Emery who practices patent and trademark law.

Common law trademark rights stem from use of a mark, explained Salai, particularly in a limited geographic area, such as a city or state.

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