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3 Dec 12
Apple fails in iFone v iPhone battle of the trade marks

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Apple Inc (Apple) has failed in a recent attempt to stop a business from using the ‘iFone’ name for telecommunications services in Mexico. The appeal is the latest of a number of failed actions by Apple in an attempt to cancel the ‘iFone’ trade mark in Mexico. 

Background

In 2003 a Mexican telecommunications company registered the trade mark ‘iFone’. The iFone company sells telecommunications systems and services, including interfaces for virtual telephone calls, virtual office services, and software under the ‘iFone’ name in Mexico. The iFone company registered the ‘iFone’ trade mark in class 38 which covers telecommunication services. 

Apple introduced the iPhone product to Mexico in 2007, four years after the registration of the prior ‘iFone’ trade mark. Apple also registered trade marks in Mexico for the iPhone brand in classes 9 and 28 which cover electronic game devices. Apple did not file a trade mark for its iPhone brand in class 38, most likely because of the prior registered iFone mark.

Apple instituted proceedings against iFone in 2009, disputing the validity of the iFone trade mark in class 38. Apple argued that the trade mark was not being used in Mexico and should be cancelled for non-use. Apple also claimed that the phonetic similarities between ‘iFone’ and ‘iPhone’ would confuse consumers (despite the iFone trade mark being registered and used prior). 

The owner of the iFone trade mark counterclaimed alleging that Apple’s sale of the iPhone product in Mexico would infringe its prior registered ‘iFone’ trade mark. The owner sought to stop Apple from selling its iPhone product in Mexico and requested damages of reportedly 40% of the profits of the sale of the iPhone product in Mexico since the launch of the product by Apple in 2007.

Decision

The Court decided in favour of the Mexican telecommunications company finding that the iFone trade mark was valid and should not be removed from the trade marks register as iFone was able to demonstrate the ‘iFone’ trade mark was used in Mexico in the course of trade.

Apple appealed the decision and in October 2012, Mexico’s 18th District Appellate Court dismissed Apple’s appeal. 

The District Appellate Court’s decision confirms the right of the Mexican telecommunications company to use the ‘iFone’ trade mark for telecommunication services in a class 38, primarily due to its earlier trade mark registration, first use and continued commercial use of the trade mark.

The impact of the decision on the sale of Apple’s iPhone product in Mexico is not yet clear. However it is likely that Apple will be required to pay damages or a licence fee to the iFone trade mark owner.

Key lessons

Even if trade marks are spelt differently, for the purposes of trade mark law, if they sound the same they will be too similar to co-exist in the same market.

Trade marks that are registered for goods and services that are not the same, but related or similar to the goods and services you provide, may block the registration of your trade mark. Use of your trade mark for similar or related goods or services to those claimed in a prior registered trade mark may also constitute infringement.

Similar to the law in Mexico, the owner of an Australian registered trade mark can overcome an application to remove the trade mark for non-use if the owner can establish that the trade mark has been used in the course of trade in Australia in the required non-use period. Similarly, the first user of a trade mark in Australia generally has the best rights to the name.

Having the appropriate trade mark clearance searches conducted prior to using a new brand and filing a trade mark can pinpoint these problems at the outset. Trade marks are registered on a country by country basis. If you are intending to commence operations overseas, it is important to have clearance searches conducted prior to launching your brand as your brand (while fine in Australia) may not be available for use in other countries. It is always better to understand these risks at the outset before substantial money is invested in a new brand. 

If you require assistance with filing trade marks, clearance searches or any other aspect of Intellectual Property Law, please contact us.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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