You'd think they'd know better. Apple, who have recently been taking action against companies who dared use the word "pod" in their name, announced earlier this week they have launched a new mobile phone, called the iPhone. (One wonders exactly how long the marketing guys took to come up with that name).
Unfortunately, it appears some one else already had a trademark on the name as applied to phones. The suggestion is that their trademark goes back as far as 1996, when the iMac, the first of the "i" products, was merely a gleam in the eye of Steve Job's goldfish.
This isn't some tiny little company either that's suing Apple. It's Cisco. A company bigger than Apple, and so far has rarely been in direct competition with them. The Register has more here.