Apple's Brazilian iPhone Trademark Battle Takes Interesting Turn

Apple's trademark battle with Brazilian firm Gradiente (and its parent company IGB Electrônica) took an interesting turn on Wednesday when an appeals judge granted joint custody over the use of "IPHONE" in that country. What makes it interesting is the reasoning the judge offered in his ruling.

Gradiente IPHONE Neo One

Gradiente IPHONE Neo One

The Start

The case effectively started in 2000 when IGB Electrônica registered a trademark for IPHONE, almost seven years before Apple introduced the iPhone at January's Macworld Expo in 2007. IGB Electrônica was granted the trademark in 2008, with the process allegedly taking so long due to the intricacies of Brazil's trademark system.

In December of 2012, IGB Electônica released a lowest-of-the-low-end Android device under its Gradiente brand, calling it the Gradiente IPHONE Neo One. This was roughly a month before its trademark expired, making the release a strategic choice relating to the trademark, rather than making a real stab at the smartphone market.

Gradiente said at the time that it would take "all the measures used by companies around the world" to preserve its intellectual property rights because "the two brands can't coexist in the market." Reasonable people concluded it was an effort to get Apple to pony up some portion of its huge cash hoard to buy the trademark, and I am one of those reasonable people.

It seemed like a cut and dry case, too. IGB Electrônica registered the mark in 2000, fair and square, and even if the IPHONE Neo One was a shill device intended to keep the trademark in play, the reality is that IGB/Gradiente owned it legitimately.

First Blood

Trademark authorities in Brazil appeared to be of a similar mind. In February of 2013, regulators ruled that Apple had no right to the IPHONE name in Brazil. Apple appealed that ruling almost immediately, and that appears to be where Wednesday's ruling came from.

The Twist

AFP News reported that Judge Eduardo de Brito Fernandes ruled that both Apple and Gradiente could use the mark. BNamericas added (via CNet) that in his ruling he stated that the IPHONE name had gained value around the planet because of Apple's product line, and that the Brazilian intellectual property institute (INPI) should have considered such realities before granting exclusive rights to Gradiente.

He said Apple's iPhone is "world renowned," and, "all the product's renown and client following have been built on its performance and excellence as a product."

The judge also noted that IGB/Gradiente's mark was just the combination of "Internet" and "phone"—and this is where it gets interesting—that in 2000, Apple already had an extensive "i" product line, with marks registered in several countries around the world.

In other words, it appears as if the judge is arguing that even though IGB registered its "IPHONE" mark many years before Apple released the iPhone, the reality is that Apple had already established the value of iProduct names. Brazilian attorneys are encouraged to add any color that they can in the comments below.

IGB said that it will appeal the ruling.