) global expansion has hit the ultimate snag: the company can no
longer use the iPhone name without the risk of being sued.
Brazil's trademark regulator, which was
expected to announce
that another firm owned the iPhone name, has now made its ruling.
, Gradiente Eletronica SA -- a Brazil-based consumer electronics
manufacturer -- has been granted ownership of the popular
Unlike Apple's last trademark battle (which involved an
iPad dispute in China
and cost the firm $60 million), Gradiente Eletronica registered
the "iphone" name (without capitalization of the "P") seven years
before Apple's first smartphone was released. Now that the
Brazilian company has been granted ownership of the trademark,
Apple must stop using it or risk being sued.
Gradiente Eletronica will hold exclusive rights to the
trademark through 2018, providing the company with a five-year
lead to build up its own "iphone" brand. Apple's only recourse is
to file an appeal.
Globally, Apple has spent billions crafting a very specific
image of the iPhone. By allowing another company to sell a device
with that name, Brazilian regulators could cause a number of
problems for Apple.
Gradiente Eletronica may be innocent in its attempt to sell an
"iphone." After all, the company registered the trademark 13
years ago. Apple may wonder why the firm waited so long to launch
its first device (Gradiente Eletronica claims a multi-year
restructuring forced the company to delay the product), which was
released last year. Regardless, now that Gradiente Eletronica
officially owns the name, it can choose to do whatever it
Apple would be wise to remember this when it goes back into
court. The company is very fond of how the legal system allows it
to stock up on patents and use them against its competitors with
or without building a single product. However, when similar rules
work against its trademark plans, Apple lawyers are not nearly as
Like it or not, Apple will probably have to settle with
Gradiente Eletronica if it wants to legally use the "iphone" (or
"iPhone") name in Brazil. Knowing how important that name is to
Apple's global expansion, Gradiente Eletronica can probably get
away with charging any price it desires.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.