So, let me get this straight.

For probably three years running, rumors about Apple making a mobile phone have been running wild. This rumored gadget is universally dubbed the iPhone, if for no other reason than its the obvious name.

Three weeks ago, Cisco announces a VoIP handset they call the iPhone. Rumors of Apple's iPhone persist, though most people think they'll rename it.

Yesterday, Apple really does announce a mobile phone, and they call it the iPhone. Cisco announces that they're negotiating with Apple so that Apple can license the iPhone name.

Today, Cisco sues Apple to stop Apple from using iPhone.

This is one of those stories where there has to be more to it than meets the eye.

Here's what I think is going on....

Cisco acquired the "iPhone" trademark in 2000 when it acquired Infogear, which had been selling a line of iPhone-branded products. Apparently, though, Cisco had not been selling anything called iPhone for several years.

Apple almost certainly knew this, since their lawyers certainly found the original trademark issuance, and also researched the subject enough to know that the trademark had fallen into disuse. So Apple went ahead with the iPhone name--at least partly because it was the obvious choice, and partly because everyone was already calling it iPhone--figuring that they could pay Cisco a few million dollars and get the trademark transferred.

Meanwhile, Cisco saw that the iPhone name was also both the obvious choice for Apple, and that everyone was already using the name. So they figured that the iPhone name should be worth rather a lot to Apple, and added a couple zeroes to the price Apple offered.

Apple, of course, balked. Especially since (as they no doubt pointed out to Cisco), Cisco hadn't actually been selling anything called iPhone for quite some time. So if it came to a lawsuit, Cisco's trademark could be nullified for disuse. Under American trademark law, it isn't enough to be issued a trademark: you have to actually use the trademark and defend it from infringement if you want to keep other companies from using it.

So Cisco quickly rebranded some other new product as iPhone and rushed it to market in order to maintain the trademark. It was important that Cisco's iPhone be introduced before Apple's iPhone, otherwise Apple would have a much stronger claim that Cisco wasn't actually using the name.

That's why we saw Cisco announce an iPhone just weeks before Apple. They needed to shore up their bargaining position before Jobs' big speech. It doesn't matter that practically everyone with a live Internet connection thinks of Apple--not Cisco--as the iPhone company. All that matters is that Cisco can claim that Apple stole its product name.

Now that it's all out in the open. Cisco is irritated that Apple won't pay up for what is (to Apple) a very valuable trademark. Apple is annoyed that Cisco is playing games to extract extra money from what had been a moribund name. And now they're taking it to court.

The conventional wisdom is that Cisco's going to win in court. But I think Apple has a better chance than most give it credit. It is possible to invalidate a trademark by showing that the name has become generic--which is only a small step from showing that the name is not associated in most people's minds with the product claiming the trademark. Apple will have an easy time proving that (a) basically nobody knows about the Cisco iPhone, while the whole planet knows about Apple's version; (b) Cisco had not used the name for a long time until suspiciously introducing an iPhone immediately before Apple; and therefore (c) that Cisco was attempting in bad faith to reclaim a trademark which it had stopped using, solely in an attempt to extract more money from Apple, the company universally associated with the iPhone name.

Of course, I have no idea if any of this is true. So my opinion is worth what you paid for it.