Live

Watch CBSN Live

Motorola Xoom Hit by Trademark Lawsuit. Apple Couldn't Be Involved, Could It?

The Motorola Mobility (MMI) Xoom tablet may be the first serious competition for the Apple (AAPL) iPad -- at least if you ask the likes of Walt Mossberg of All Things Digital. That doesn't mean it's likely to face smooth sailing.

The biggest immediate challenge facing the Xoom is a trademark lawsuit that seeks a temporary injunction of sales, as intellectual property blogger Florian Mueller reported. There are good reasons to ask whether Apple might be involved in some way.

Xoom Corporation filed suit yesterday against Motorola Trademark Holdings (the Motorola legal entity that holds the trademarks) for willful infringement and sought a "temporary restraining order and/or preliminary injunction" as well as a permanent injunction against use of the mark. If granted, Motorola would have to immediately stop the launch of the Xoom until it could either legally resolve the matter or find another name. Given that the device and packaging are already in process, it's unlikely that Motorola could make such a shift.

A sketchy lawsuit on thin premises
Could Motorola have seen this coming? Absolutely, and it probably did. Xoom Corp. originally got a trademark in 2001 and then filed to change what the registration covered in September 2003, with registration granted in December 2004. Xoom has the website www.xoom.com. (You'd think that Motorola would have squared away any possible conflict -- or found another product name.)

But there are curiosities about this suit. Motorola filed for its trademark in October 2010. Surely lawyers from both sides have known about the issue from the start. Why wait until the last minute for resolution?

That crosses into the second oddity. Motorola seeks a trademark on hardware: computer, cases, accessories, power adapters, and the like. Xoom Corp originally had a trademark for an online advertising network. After the registration change, the trademark covered "providing business information, namely on, money transfer services."

Trademark offers ownership of an identification for specific business uses in which the trademark holder engages. It can extend into related areas, but, really, going from business information on money transfers to tablet computers? It hardly seems like a potential confusion between the businesses.

Tracing ties back to Apple
So what's the reason for the suit? Xoom Corp has received an estimated $53 million in investments between 2007 and 2010 -- and those were fifth and sixth rounds. Hardly a start-up hungry for a few million.

Maybe the board actually is worried about identity. According to various estimates, Xoom Corp's www.xoom.com web site gets between 150,000 and 400,000 unique visitors a month: not shabby, but not a household name, either.

Conspiracy buffs might enjoy noticing that one of Xoom Corp's investors is Sequoia Capital, which was an early backer of Apple. Could it be that Apple worked some personal connections to encourage the lawsuit? Even if not ultimately effective, it could tie Motorola in knots.

And if you haven't pulled out your tinfoil hat yet, remember that Apple is generally regular in new product releases: every year. But there's the announcement of the iPad 2 next week and, according to a continuing rumor, an iPad 3 late this year. Could it all be part of an Apple attempt to upset Motorola and keep effective competitors out of the tablet space? Or is it just a happy coincidence?

Related:

Image: morgueFile user southernfried, site standard license.
View CBS News In