The networking gear vendor filed suit in a Northern California District Court, asking for damages and an injunction that would stop Apple using the iPhone name to market its devices.

While Apple’s iPhone is not set to hit shelves in the US until the summer, Cisco claims in its complaint that the company’s huge launch event in San Francisco already constitutes infringement.

Apple’s use of ‘iPhone’ in its product promotion and advertising at Macworld constitutes the use in commerce of a colorable imitation, copy and reproduction of Cisco’s iPhone mark, the complaint says.

Apple’s iPhone will be a combined smartphone and music and video player, along the same design lines as the already successful iPod. The company plans to sell them for $499 or $599 from June.

Cisco came into possession of the iPhone trademark when it bought InfoGear Technology Corp in 2000. The trademark application was filed in 1996, and granted in 1999.

InfoGear was using the brand as early as 1997, and Cisco started using it to describe an IP telephone just last month, when it launched iPhones under its Linksys consumer brand.

According to Cisco’s complaint, Apple first approached it about using the iPhone mark back in 2001, and continued to make overtures until very recently. Each time, Apple was told that Cisco was not interested in ceding the mark to Apple, Cisco says in its complaint.

Negotiations apparently continued until as recently as Monday this week, when Cisco said that it had sent a document to Apple for signing, in anticipation of Tuesday’s announcement.

Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco’s iPhone name, said Cisco general counsel Mark Chandler, in a statement, they should not be using our trademark without our permission.

Cisco, keenly aware that it could off looking like the bad guy with Apple’s notoriously vocal fans, is trying to position the dispute as one of openness and interoperability, in which Apple is the stubbornly closed party.

What were the issues at the table that kept us from an agreement? Was it money? No. Was it a royalty on every Apple phone? No. Was it an exchange for Cisco products or services? No, Chandler blogged yesterday. We hoped our products could interoperate in the future.

That is arguable Apple’s soft spot, in terms of public perception. The company is not known for the openness of its platforms. Indeed, early criticisms of the not-yet-released Apple iPhone is that it will not allow third-party software to be installed.

Cisco also suspects that Apple has been trying to register the iPhone mark by the back door, filing an application under the name Ocean Telecom Services LLC last September.