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Apple in Brazil: What Is This iPhone Neo One, Anyway?

When I was writing about the case of Apple Inc. (NASDAQ: APPL) losing an appeal in Mexico over the use of the iPhone name against Mexican telecommunications company iFone, I thought that if Apple submitted to paying iFone what it was asking for (the 40 percent of its iPhone’s sales in Mexico), other companies would take it as an invitation to act in the same way. (See: iPhone vs. iFone: Apple Loses Appeal in Mexico.)

Laws can be tricky in some places, created specifically to benefit the locals. This is not news for anyone, isn’t it?

Thanks to some readers who had similar thoughts, and good, passionate discussion on the topic, I went on a quest to find out more about the existence of similar cases. And voilá ! I did: A recent, ongoing case in Brazil.

What's this Android iPhone Neo One, anyway?
As if the iFone case isn't bad enough for Apple, wait until you hear about Grandiente’s iPhone Neo One (pictured, below) in Brazil.

In March of 2000, Brazilian telecommunications service firm IGB Electronica, which owns the brand Grandiente, filed an application for registration of the trademark “iPhone” at the Institute of Intellectual Property (INPI) in Brazil, demanding exclusive rights to the name. At the time, Apple’s iPod, iTunes, and iMac were known in Brazil.

The INPI, taking its time, granted the rights to the name iPhone to IGB Electronica seven years later, in November 2007. Strangely enough, this happened four months after Apple tried to register the trademark iPhone in July. Coincidence? I don’t think so. The INPI denied Apple’s request, saying they wouldn't accept two records of the same brand for the same product category. How convenient.

Despite having enough time after receiving the trademark registration by the INPI in 2007, it was not until December 18, 2012 that Grandiente, having also declared bankruptcy, launched its iPhone Neo One, which runs on Android. It did so 15 days before the expiration of its exclusive right to use the trademark in Brazil (a record expires in five years if it is not used). Again, how convenient.

Of course, the money Apple might have to pay will help the company to recover, right? Right.

Amicable ending?
According to Folha de São Paulo, Brazil’s largest daily, Apple and Grandiente have been negotiating an “amicable solution,” since early January for the use of the iPhone trademark in Brazil.

It sounds to me like Apple is just tired of all these instances where there is always a reason — which never seems to make sense — why it ends up losing these fishy cases. Although, this time, bankruptcy seems to be a clear reason for a company trying to get easy money from Apple. I see too many unethical issues going on here; issues that are only solved by Apple paying large amounts of money.

In a nutshell, all these cases seem to end in expensive settlements between Apple and the companies that are trying to get easy money. These are not cases of over-patented, innovative technologies. These are disputes over the rights of using a name. How far are these companies going to go if Apple continues paying what they demand? Are the Mexican and Brazilian markets really significant enough to Apple in terms of ROI, and worth the trouble, time, and money?

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11 comments on “Apple in Brazil: What Is This iPhone Neo One, Anyway?

  1. Anand
    April 12, 2013

    Are the Mexican and Brazilian markets really significant enough to Apple in terms of ROI, and worth the trouble, time, and money?

    @Susan, I think Apple will be seroius about Mexican and Brazilian markets because Apple needs new emerging markets if it has to expand its user base. Moreover Samsung is giving tough competition to Apple in other US/Europen markets. Apple has to find new ways to improve its profitability.

  2. Susan Fourtané
    April 12, 2013

    Thanks, Anand, for answering that question.

    “I think Apple will be seroius about Mexican and Brazilian markets because Apple needs new emerging markets if it has to expand its user base.”

    In part I agree with you. Apple needs new emerging markets, but until what extent is this profitable if in every emerging market there is a situation causing so much expenses to Apple?

    Apple has to find new ways to improve its profitability.”

    To respond to this I believe Apple needs to expand its own product line with at least one more smartphone different from the iPhone. Something like the iPhone mini that it was so talked about some time ago, remember? And then nothing happened.  

    -Susan

     

  3. Susan Fourtané
    April 12, 2013

    Anand, 

    Look:  http://www.ebnonline.com/author.asp?section_id=1364&doc_id=231121 

    We were discussing a future iPhone mini already in 2011. I commented recently that after the good results of the iPad mini, Apple might want to consider the iPhone mini project again. What do you think?

    -Susan

  4. Cryptoman
    April 12, 2013

    These cases must be really getting on Apple's nerves. I am pro competition and to be frank I do not like Apple's dominance in the smart phone market. However, what is unfair is unfair regardless of my personal feelings.

    I am starting to think maybe it is time for Apple to put its thinking cap on to roll out its next best iPhone with a completely different bu equally as memorable and attractive brand name.

    This should not be a big deal for a creative company like Apple right? If I were Apple, as a response to those incidents in the Latin America, I would come up with a brilliant brand name that is specific to the region to really turn the heads of the consumers there and get the exclusive rights to that brand name in every single Latin American country first. Then all the other copycats can stick to their iFones or iPhones and whatever else. Problem solved…

  5. prabhakar_deosthali
    April 14, 2013

    This trademark war to get some cash from the cash-rich company Apple reminds me of the early days of Internet when there was a mad rush from every Tom Dick and Harry to get ownership of the would be popular ( and profitable trade-ins) domain names and their all variants.

    It may have been  an oversight or lack of foresight  from Apple not to get their trademark ( such as iphone) registered in every possible market ; and Apple is now paying for it.

    I remember the company in which I worked . They regsitered their patent in 39 countries in the world and continuously protected it , eventhough there was nothing done beyound the concept proving. If the product would have succeded the company would have benefitted from this protection.

  6. Susan Fourtané
    April 14, 2013

    Cryptoman, 

    “I am pro competition and to be frank I do not like Apple's dominance in the smart phone market. However, what is unfair is unfair regardless of my personal feelings.”

    That's the thing, this is far beyond liking or not liking Apple. This is about fairness, ethics, and integrity; some concepts every company should follow to gain consumers' respect. 

    “I am starting to think maybe it is time for Apple to put its thinking cap on to roll out its next best iPhone with a completely different bu equally as memorable and attractive brand name.”

    I am glad you also thought about this. I was discussing exactly this point in another post here on EBN. And Apple has to patent everything everywhere, just in case. This would save time and money in the future. 

    -Susan

  7. Susan Fourtané
    April 14, 2013

    Prabhakar, 

    Yes, I agree with you. They are now paying for a lack of foresight. Do you think it's worth to pay what those companies ask Apple to pay to have a presence in those countries? 

    Thanks for sharing the story of the company where you worked. It seems they did something quite smart there registering their patent in many places, just in case. Once again, prevention proves to be useful, and less expensive at the end of the day. 

    -Susan 

     

  8. prabhakar_deosthali
    April 15, 2013

    Susan,

    In my opinion the best thing for Apple to do is not to pay heed to these companies and push its iphone products into these markets as the goverments there cannot object to Apple selling its iphone anyway.

    When Intel lost its trademark war with AMD in the x86 series of microprocessors  ( the court ruled that a number cannot become a trademark)  , it did something different. It named its next processor as Pentium (against 586

    So Apple feels that it is a no1 company in mobile phones then it should just ignore such petty demands.

  9. FLYINGSCOT
    April 15, 2013

    I suppose Apple having a gazillion dollars in the bank makes this type of activity more commonplance and also more palatable to Apple who are on the sharp end of things.

  10. Susan Fourtané
    April 17, 2013

    Prabhakar, 

    I totally agree with you. Not to mention that giving them more importance than what they have is only tempting others to try the same demandings for money for any excuse they could possible think. 

    -Susan 

  11. Susan Fourtané
    April 17, 2013

    FlyingScot, 

    Exactly. But don't you think that it's an abuse? 

    -Susan 

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