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Apple’s luck protecting the iPhone name has taken a turn for the worse with Friday development that the firm has lost an appeal over its use of the iPhone moniker in Mexico, reports The Wall Street Journal. The ruling marks Apple’s second setback in Latin America after a Brazilian patent office a month ago approved the iPhone trademark to a local electronics maker IGB Eletronica SA.

That Brazilian firm, better known by its brand name Gradiente, owned rights to the iPhone name since 2000, long before Apple introduced its handset. In the case of Mexico-based Ifone SA, it had registered the ‘Ifone’ trademark back in 2003 and was making proper use of it, the nation’s Supreme Court ruled Friday…

Anthony Harrup, writig for The Wall Street Journal:

A Mexican technology services company is hoping to reap compensation from Apple Inc. and local mobile operators for the use of its brand name – Ifone – after Mexico’s Supreme Court upheld a ruling that the local firm owns and makes proper use of the brand in the country.

It was reported in November 2012 that a Mexico City Judge denied Apple’s injunction request to let it sell its iPhone-branded products in the country.

The dispute actually dates back to 2009 when the California firm attempted to register the iPhone trademark in Mexico, only to be told by the Mexican Industrial Property Institute that the name was already taken.

Apple did sue Ifone SA, arguing its rights to the moniker had expired, but a federal court disagreed and now the Supreme Court has rejected Apple’s appeal.

iFone

Ifone SA is in it for the money.

They’re a small to medium sized company that sells server systems to telcos and is the local representative for the software solutions provider AltiGen Communications Inc.

A company lawyer said Ifone SA has already submitted claims to the Industrial Property Institute IMPI, seeking damages from Apple and the three Mexican telcos who carry Apple’s handset in the 115 million people country: America Movil’s unit Telcel, Spain’s Telefonica SA and Grupo Iusacell.

This is a repeat of the Brazil case.

After Apple lost the iPhone trademark to Gradiente, a Brazilian phone maker, the Cupertino firm did appeal the decision, but in all likelihood will have to pay a fee for rights to use the iPhone name in the country. It’s also interesting that Gradiente had five years to make use of the iPhone trademark and just before the deadline they cunningly released an Android handset called Iphone Neo One, depicted below.

IGB Electronica iPhone (image 001)

Local companies like Ifone must be realizing that Apple is willing to pay millions so they won’t settle and instead pursue their claims before local IP authorities, seeking monetary damages in excess of millions of dollars.

The strategy appears to be working: just last year, Apple paid China-based Proview $60 million to drop a challenge of the iPad trademark.

Shortly after the iPhone was announced in January 2007, network equipment giant Cisco began a similar trademark challenge which was resolved a month later.