Apple is set to challenge a Brazilian patent agency ruling that states that the iPhone trademark belongs to a Brazilian electronics company.
Apple now faces a major obstacle in the emerging Brazilian smart-phone market. Brazilian patent regulators announced today that Apple does not have the rights to the iPhone trademark. This means that Apple will have to fight to keep the name, a battle that they’ve fought before.
The National Institute of Industrial Property (INPI), Brazil’s patent agency, has denied Apple’s claims to the trademark because, it says, IGB Eletrônica SA already owns the rights. IGB is better known by its brand name, Gradiente.
Gradiente filed for a Brazilian trademark on the iPhone name back in 2000, six years before Apple filed its application. Since Brazil's trademark law states that registrations work on a first-come, first-serve basis, Gradiente was definitely in line before Apple. However, Apple is challenging the decision, according to the Wall Street Journal, on the basis that Gradiente has not sufficiently used its trademark.
Gradiente won the trademark in 2008, which according to Brazilian laws gives it rights to the name until 2018 as long as the company produces a device under that name within five years. Gradiente did not release such a device until December, only a few weeks before the deadline. Gradiente’s “IPHONE Neo One” runs on the Android OS, retailing for $304. That is a fraction of the price of Apple’s iPhone 5, which retails for $1,220 in Brazil. (In the US, the cheapest iPhone costs $199 with a two-year contract. That contract helps phone companies recoup the money lost on the initial sale of the device. Most countries do not have these subsidies, hence higher prices)