Will Apple Have to Pull the iPhone From This Market?

Apple (NASDAQ:AAPL) may have officially lost the right to use the iPhone name to sell its smartphone in Brazil, but the company that owns it exclusively is still open to talks. A local newspaper reported that the Brazilian Institute for Industrial Property had rejected Apple’s request to regain the naming right from electronics firm IGB Eletrônica SA, or Gradiente, which had originally asked for the trademark back in 2000. According to Folha de S.Paulo newspaper, the decision will be announced on February 13.

But the chairman of IGB told Bloomberg that while he had not received any ruling information yet, his company would consider selling the naming rights to Apple. “We’re open to a dialogue for anything, anytime,” Eugênio Emilio Staub said on Tuesday. “We’re not radicals.”

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Apple made the first attempt to receive exclusive use of the iPhone name in 2006, but its application was rejected because IGB had made the request first. Apple was still allowed to use the word in marketing and instruction manuals for a while, but in 2008, INPI went ahead and awarded exclusive rights to the name to the Brazilian company for its G-Gradiente iPhone until 2018.

Gradiente had earlier warned it may go after Apple for copyright infringement, saying it would take “all the measures used by companies around the world” to preserve its intellectual property rights. “The two brands can’t coexist in the market,” Staub told The Wall Street Journal in December. “It’s up to Apple to make a move.”

Staub added that while his firm was ready for a dialogue, it was surprised at Apple’s apathy. “To our surprise, Apple never looked us up,” he said. “They didn’t look for us. They didn’t treat this issue with the respect it deserves.”

The Gradiente device has a rectangular shape with rounded edges like Apple’s iPhone and also comes in black or white with a touchscreen. It uses Google’s (NASDAQ:GOOG) Android operating system.

Apple, which had to acquire exclusive rights to the iPhone name in the United States from Cisco (NASDAQ:CSCO), is also facing a similar problem in Mexico, where a local telecommunications firm registered the name iFone in 2003. Apple sued it in 2009, but two lower courts have already ruled against the California company. Apple also had to fight for the iPad name in China with a local company and it eventually settled there for $60 million last July.

It can still challenge the Brazil ruling in the country’s courts.

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Apple does not reveal revenue specific to Brazil and Mexico because the countries contribute less than 10 percent to its net sales.

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