updated 09:02 pm EDT, Thu June 5, 2014
Mexican carriers expected to appeal government ruling to federal court
A Mexican government agency has absolved Apple itself of any wrongdoing in a trademark lawsuit over the name "iPhone," which was brought by a local call center company named "iFone" which had an earlier trademark on the phonetically-identical name. The Mexican Institute of Industrial Property (IMPI) has declared that since Apple is not a telecommunications provider, it cannot be sued for trademark confusion; however, Apple's carrier partners in Mexico are liable for monetary fines and civil damages.
The agency decided that the "iPhone" mark only infringes on the "iFone" trademark for telecommunications services, meaning that carriers that offer the iPhone, such as Telcel, Movistar and Iusacell are all on the hook for infringement damages, and have 15 days to remove the word "iPhone" from all advertising materials. Conceivably, iFone could file civil lawsuits against the carriers for damages associated with the use of the iPhone brand. Under Mexican law, iFone could be entitled to up to 40 percent of the carriers' iPhone profits.
The carriers can continue to sell the iPhone, but will likely have to refer to it as "Apple's smartphone 5s" or some other alternative name. In the same ruling, the IMPI found that because iFone doesn't make any physical phones, it also cannot sue Apple over the disputed trademark. Apple had previously tried to overturn a prior ruling that it could not claim exclusivity on the name "iPhone" in Mexico, taking the case all the way to the Mexican Supreme Court, but ultimately lost that case due to the phonetic similarity and iFone's prior claim.
The next move on the part of the carriers is likely to be an attempt to appeal the IMPI ruling, which would go to the Federal Court of Fiscal and Administrative Justice, according to AppleInsider. In the meantime, the carriers will still have to pay the fines and remove Apple's "iPhone" branding while the decision is being appealed. It is unknown if Apple will help defer the cost of the fines.