Regulators in Brazil on Wednesday rejected Apple's application to register its iPhone trademark in the country, having already recognized a local manufacturer's claim to the name.
The Institute of Industrial Property (INPI) "denied Apple registration of the iPhone trademark," the institute's press office told AFP. The decision was officially published by the INPI.
Apple had applied for exclusive rights to the iPhone name in Brazil in 2007 when it launched the wildly popular smartphone in the huge Latin American market.
But Brazilian manufacturer Gradiente SA had applied to register the brand "Gradiente iphone" in 2000, and was granted rights to it in 2008.
Apple can still sell its smartphones in Brazil with the iPhone name, but Gradiente has the option of suing for exclusivity, the institute said.
The U.S. high tech giant had petitioned the institute to cancel Gradiente's trademark, arguing that it had expired because the company had not used it in five years, the institute said.
But Gradiente surprised the market by launching a "Gradiente iphone" at the end of the year, bringing the dispute to a head.
Its first iPhone family model, the Neo One, went on sale in December with a price tag of around $300 while Apple's iPhone 5 – also launched in December – retails for more than triple the price.
Both Apple and Gradiente refused to comment on the INPI ruling.
Gradiente president Eugenio Emilio Staub made it clear in December that his company would "take all measures to ensure the preservation of our intellectual property rights in our country."
Gradiente's exclusivity rights expire in 2018.
Among the criteria used by INPI for granting those rights are avoiding the use of the same name for a product by two firms, which would create confusion for consumers.
In 2007, Apple reached an out-of-court settlement with U.S. computer giant Cisco Systems Inc., which had been granted rights to the iPhone brand name in 2000.
At the end of 2012, a Mexican court ruled in favour of the Mexican telecommunications firm Ifone in a similar trademark dispute with Apple.