A telecommunications consultant in Brazil is predicting that Apple will pony up for the "IPHONE" trademark in that country. That trademark is owned by IGB Eletrônica SA, which released an Android-powered 'IPHONE Neo One' under the Gradiente brand in December.
The Glorious Gradiente IPHONE Neo One
At that time, Gradiente said in a statement 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."
Gradiente registered for the trademark in 2000, more than two years after Apple reset the rules of the PC industry with its iMac, but more than six years before Apple announced the iPhone at Macworld San Francisco.
The AP reported on Thursday that Gradiente said it filed for the 'IPHONE' mark because it realized, "there would be a technological revolution in the world of cellphones with the convergence of voice and data transmission and reception via mobile Internet."
The reality, however, is that the Gradiente IPHONE Neo One is a budget level device that seems more like a bargaining chip than a serious entry into the smartphone market. For R$599 (US$289), users get a 3.7-inch 320×480 display, a 700MHz processor, 2GB of internal storage, a 5MP rear-facing camera, a 0.3MP front-facing camera, dual-SIM support, all powered by Android 2.3.4 Gingerbread.
Holy smokes. 2011 called and said that 2010 had left a message about wanting Gradiente to give those specs back.
The device may serve that bargaining chip purpose, however. Eduardo Tude, president of Brazilian telecommunications consultancy Teleco, told the AP that, "The most likely scenario is that the two companies will reach an agreement whereby Apple will pay Gradiente for the use of the brand."
Doing so would be in Apple's best interest. The trademark was filed in 2000, but due to the speed (or lack thereof) of Brazil's trademark process, it wasn't granted until 2008. Good for ten years, that means Gradiente owns it until 2018, and Apple's iPhone could conceivably be chased out of Brazil if it doesn't come to an accord with Gradiente.
Even if that isn't the case—we'll be the first to point out that we know next to nothing about the specifics of Brazillian trademark law—the IPHONE Neo One's mere presence in the market damages Apple's iPhone brand.
Brazil has the sixth largest economy on the planet. It's a large market with an emerging middle class that is very desirable for a company like Apple. While Apple's products are currently very pricey in Brazil due to hefty protectionist tariffs, Apple has been rumored to be working on plans to make some of its devices in Brazil with Foxconn to avoid those tariffs.
If it does so, Brazil could become a major market for Apple, and as such the company needs to control the IPHONE mark.
In other words, Mr. Tude's analysis appears spot on to us. Apple will assuredly pay to get control of this mark, even though Gradiente president Eugenio Staub told the AP that Apple has not contacted his company heretofore.