Apple can use the term iPhone to refer to its new music-playing mobile phone. Cisco, which owns trade marks for iPhone, has come to a deal with the computer and iPod maker.
Apple co-founder and chief executive Steve Jobs announced the iPhone earlier this year despite the fact that his company had no right to use the name. The trade mark belongs to networking equipment maker Cisco, which instantly launched a law suit to protect its name.
Cisco has owned the trade mark since it bought phone equipment maker Infogear in 2000. It has since launched several products under the iPhone name. Apple was in discussion with Cisco about licensing the name up to within 24 hours of its product announcement, but just announced the device as iPhone without there being a deal in place.
"Both companies acknowledge the trademark ownership rights that have been granted, and each side will dismiss any pending actions regarding the trademark," Cisco said in a statement.
"In addition, Cisco and Apple will explore opportunities for interoperability in the areas of security, and consumer and enterprise communications. Other terms of the agreement are confidential."
Apple had at first said that it did not need Cisco's permission to use the name. It dismissed the suit as "silly" and argued that because Cisco's phones were voice over internet protocol machines and its were mobile phones there was no likelihood of trade mark infringement.
Cisco's suit alleged that Apple had perpetrated a "wilful and malicious" trade mark violation, and that the result of two iPhones would have been "confusion, mistake and deception among consumers".
Cisco also owns a European trade mark for iPhone dating from slightly later than the original 1996 Infogear filing.