It's quite strange. Cisco owns an iSomething trademark, and Apple did not try to prevent such a big brand dilution: Apple has been selling iThings (the iMac, precisely) since 1998, and if I were Steve Jobs I would have suited InfoGear, which filed the iPhone trademark in 2000, for brand dilution.
The iMac hype generated a lot of iSomething gizmos, some of them were nice, some weren't.
I think that "i" prefixed to another word is a strong identity element which, in my opinion, pertains to Apple product portfolio.
Therefore, Apple has the right to preserve its identity elements and avoid product misattribution, brand weakening, loss of dominance in a market.
For instance, I don't think Apple will allow me to sell frozen pre-cooked cod fillets with the brand name "iCod", because it will confuse consumers and think that Apple is selling food. Or, worse than ever, associate my low quality (fishy) iCod rotten sticks with Apple...
Anyway, as David Berlind speculates right before the iPhone unveiling, Apple has much more to gain than to lose, in a lawsuit with Cisco.
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And, for those who do not know yet, there is another danger towards Apple brand, a trademark misuse that's called iBrator. I wonder if Cisco is interested in acquiring the owning firm...
Watch the video :)) (Quicktime)
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