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SAN FRANCISCO, Feb. 21 — Apple and Cisco Systems have decided that a name is not worth fighting over.
On Wednesday, the companies settled their dispute over the iPhone trademark. Six weeks ago, Cisco filed a lawsuit in federal court in San Francisco over Apple’s planned use of the name for its much anticipated multimedia device, which combines the features of a mobile phone, an iPod and a BlackBerry.
Cisco claimed that it had owned the trademark since 2000 and was using it for a line of Internet-connected phones.
Wednesday night, in a short, ambiguously worded statement, the companies said they would dismiss all legal action against each other regarding the trademark and that Apple could use the name for its device, which it plans to start selling in June.
In addition, the companies said they would explore ways to make their identically named iPhone products work together “in the areas of security and consumer and enterprise communication.”
Representatives for Apple and Cisco said other terms of the deal would remain confidential. It is not known if Apple made a cash payment to Cisco, but intellectual property lawyers say some sort of payment is typical in these cases. It is also unclear whether Cisco had sold Apple the name iPhone outright and had then secured permission to use it itself.
But the deal appears to give a partial victory to both sides. Apple can begin selling its phone with the name that its strong-willed chief executive, Steven P. Jobs, seemed to prefer.
Cisco can also continue to use the name, and with the promise of interoperability, it might have some of the hype and magic surrounding Apple’s products rub off on its own less prominent offerings.
Hostilities broke out between the two companies last month, when Mr. Jobs announced the music phone at the annual Macworld convention in San Francisco.
Cisco, the networking company based in San Jose, Calif., was using the name to sell phones that can plug into a PC or connect with a wireless hot spot and make free calls over the Internet.
The two companies negotiated intensely over the trademark in early January. Executives had planned to make announcements concurrently at the Consumer Electronics Show in Las Vegas and at Macworld, proclaiming the links between their iPhone products.
After talks broke down and Mr. Jobs announced his iPhone anyway, Cisco filed a lawsuit, saying that Apple’s use of the iPhone name constituted a “willful and malicious” violation of Cisco’s intellectual property. In response, Apple called the lawsuit “silly” and noted publicly that several companies besides Cisco were using the iPhone name.
Cisco’s lawsuit described covert Apple attempts to obtain the rights to the iPhone name. In September 2006, a corporation calling itself Ocean Telecom Services filed an application for the trademark based on earlier filings in Trinidad and Tobago. In its complaint, Cisco asserted that Apple was behind the efforts.
But while they flung legal accusations at each other, both companies faced significant pressure to settle. Apple’s iPhone will be released in June and will be available to customers of the AT&T wireless network, which was formerly known as Cingular Wireless. If Apple had failed to settle with Cisco and subsequently lost the battle in court, it could have been liable for financial penalties for each unit that it sold.
But Cisco also faced a strong incentive to reach a deal.
“Cisco had to provide access to the trademark to Apple if it wanted to achieve the highest value for the name. There was no potential second buyer who would have equaled Apple’s desire for the iPhone mark,” said Alan Fisch, an intellectual-property lawyer at Kaye Scholer in Washington.
He added that Cisco also faced the reality that consumers associated the name more with Apple.
“The iPhone name has been informally synonymous with an anticipated Apple phone for years prior to the product’s formal announcement,” he said.
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