Cisco has filed a lawsuit in Federal District Court for Northern California seeking an injunction against Apple using the name.

The name iPhone is a registered trademark of Linksys, a division of Cisco. Linksys picked up the iPhone name when it bought a company called Infogear Technology in 2000. Cisco's iPhones are telephone handsets designed for use on a VoIP network.

The iPhone has proved to be the most talked-about product at this year's Macworld, and its positive reception has sent Apple's stock surging over the past two days. The company's stock closed at $97 Wednesday, up nearly 5% for the day.

Apple and Cisco have been in negotiations for about two years over Apple's desire to license the iPhone trademark, say Cisco spokesman John Noh. When Apple CEO, Steve, Jobs introduced the iPhone at Macworld, Cisco had not yet received a signed trademark licensing agreement from Apple, even though the two companies had been negotiating terms as recently as Monday night.

"Because they have been negotiating with us on licensing the trademark all this time, Apple is acknowledging that we own the name," says Noh.

"Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco's iPhone name," says Mark Chandler, senior vice-president and general counsel for Cisco.

"Today's iPhone is not tomorrow's iPhone. The potential for convergence of the home phone, cell phone, work phone and PC is limitless, which is why it is so important for us to protect our brand," Chandler adds.

An Apple executive told PC World magazine that because the Cisco iPhone is a VoIP phone and the Apple iPhone is a cell phone, Apple is not in violation of Cisco's trademark. "They are different products," says Greg Joswiak, Apple's vice-president of worldwide iPod marketing. The iPhone also includes an iPod music player.

But if Apple was in talks with Cisco to license the iPhone trademark, it would be "a dangerous move" for Apple to start using the iPhone name anyway, says trademark attorney, Allonn Levy, of law firm Hopkins & Carley in San Jose, California. "It could be seen as intentional infringement."

Levy says it is possible that Apple could argue that Cisco had not introduced any iPhone products until last summer and that Apple would consider the name available. But he also said Cisco may have filed the lawsuit in order to pressure Apple into signing the trademark licensing agreement that the two companies had been negotiating.