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Apple to pay millions for Brazilian 'iPhone' name rights

Apple is headquartered here in California, but its popular products are in demand all across the globe.

For the Cupertino-based tech giant, that means it must not only work to secure protection for its designs here in the U.S., but in any other country where its gadgets are sold as well.

Recently, news broke that Apple was inching toward ending a long-running dispute with regard to the rights for the name "iPhone" as it is used in Brazil.

In the U.S., "iPhone" is trademarked, of course, but in 2000, a company called IGB Electronica asked the Brazilian Industrial Property Institute (its Portuguese acronym is INPI), the Brazilian equivalent of the U.S. Patent and Trademark Office, for the rights to use the term "iPhone" in Brazil.

This practice is derogatorily termed "squatting." At the time, Apple had not even introduced the iPhone, and it seems Electronica may not have even had a product yet on which it was going to use the name.

Electronica, however, was thinking ahead and correctly guessed, based on earlier products like iPod, iTunes and iMac, that any telephone Apple made would likely be called iPhone. In other words, it knew that rights to the word "iPhone" would become very valuable if Apple's telephone succeeded.

It did, of course, and for the past 13 years, Apple, Electronic and INPI have tussled over the rights to the word "iPhone." Apple formally asked INPI in 2007 not to give Electronica the rights to "iPhone," but it was rebuffed.

Last week, news broke that Apple and Electronica had reached an agreement that will allow Apple exclusive use the term "iPhone" in Brazil. Although Apple is probably not happy that it was not able to achieve what it wanted through the Brazilian court system, Brazil is considered an important emerging market, so in the end, Apple must have decided it would rather pay up than lose out.

What we hope California businesses realize here is that if their products are sold overseas, they should not assume that U.S. intellectual property protections will apply abroad.

Source: Forbes, "Apple Closer To Solution Regarding Brazilian iPhone Trademark Dispute," Kenneth Rapoza, March 9, 2013

  • For more information on trademarks, you could visit our Trademark Law page.

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