Yuval Barzakay had a thriving telecom business with an identifiable brand, and was pretty sure he had the law on his side.
What he didn't have was a way of preventing the omnipresent brand juggernaut that is Apple Inc. from using the name he gave to his company's voice over Internet protocol (VoIP) phone service four years ago: iPhone.
As thousands of anxious Apple fans in 70 countries around the world, including Canada, line up for the launch of the next-generation iPhone today, Mr. Barzakay can breathe a sigh of relief.
After striking an eleventh-hour deal with Apple on Wednesday night, the president and founder of Toronto-based Comwave Telecom Inc. is pleased with the way his legal odyssey with the computer maker has ended.
“I'm happy to report that we have settled our dispute,” Mr. Barzakay said in an interview with The Globe and Mail. “Both parties worked hard and diligently to make sure the deal was closed prior to the launch.”
Under the terms of the agreement, Apple will receive sole rights to the iPhone name in Canada, while Comwave has agreed to phase out its use of the moniker – which it currently uses to promote its VoIP phone service – by Nov. 9.
A spokesman for Apple in Canada did not return calls requesting comment.
For more than a year, Mr. Barzakay and his lawyers negotiated with Apple over the rights to the trademark.
Although the dispute had the potential to degenerate into a lopsided shoving match between a computer giant and a Canadian business with 120 employees, neither side wanted that.
“Initially we had that thought that perhaps it could have been that way,” Mr. Barzakay said. “But I think that Canadian industry needs to stand up when their rights are being violated. … Ultimately, if you have something to stand for and you stand up for it you're going to prevail. In this case, I think both parties were satisfied.”
This isn't the first time Apple has run into opposition to its use of the iPhone name. In February, 2007, a little more than a month after the iPhone was announced, Apple settled a dispute with Cisco Systems Inc., which was using the iPhone name to promote its own Web-based home phone service in the United States.
Even though privately held Comwave was the first out of the blocks with the iPhone name in Canada, customers were increasingly identifying the term with Apple's product.
“Whenever you have a very large enterprise like Apple and they put in $20-million to $30-million a quarter into advertising, it doesn't matter whose name it is, eventually they will own it,” he said.
“It's all about perception. There are hundreds of thousands of Canadians who have been exposed to our iPhone over the course of a few years, but within a very short time, the hysteria on the Apple iPhone has almost caused what I call reverse confusion, in that the perception is that the iPhone name was Apple's [first] and not Comwave's,” he said.
Comwave's iPhone brand was created in a boardroom at the company's Toronto offices in June, 2004, as Mr. Barzakay and his call centre managers searched for a name to go with its plans to market an Internet-based home phone service. Prior to the launch of its iPhone, Comwave was primarily a long distance provider. The VoIP service now accounts for approximately 30 per cent of its revenue.
In 2006, the company started hearing rumblings that Apple was working on a new multimedia cellphone, tentatively named the iPhone in keeping with the company's other i-branded product lines, such as the iMac and the iPod.
At the time, Mr. Barzakay found it hard to believe Apple would launch a product dubbed the iPhone, but a few months later, in January, 2007, Mr. Barzakay heard the news; Apple chief executive officer Steve Jobs had unveiled the revolutionary touch screen device at the Macworld Conference & Expo.
He was shocked.
“We heard rumours about it, but we didn't believe [Apple] would launch it when there were so many trademark holders of the name,” he said.
Although the first-generation iPhone was only available in the U.S., it would be only a matter of time before Apple would bring the device to Canada.
It wasn't long before Comwave filed documents opposing Apple's use of the name and the two companies entered into negotiations.
Dozens of letters between lawyers were exchanged. Meetings and conference calls followed. Throughout the ordeal, Apple's lawyers were professional, Mr. Barzakay said.
Now that its dispute with Apple is over, Comwave can focus on the future, which will begin with shooting new television commercials and preparing for the rebranding of the company's VoIP service.
Mr. Barzakay said he told Apple's executives he would even buy himself an iPhone.
