Apple has lost their legal claim to the iPhone name in Mexico

Apple may have solved their trademark problems in China, but it appears they may have a bigger problem on its hands south of the U.S. border, as a court in Mexico City has denied an injunction that would have allowed Apple to continue to sell under the iPhone brand because it violates the trademarks of iFone, a Mexican telecommunications company. The ruling could have a major impact on Apple’s phone sales in Mexico, as well as affecting the marketing and sales plans of several wireless service providers in the country, some of which were gearing up to offer the iPhone 5 to customers this weekend.

It’s not actually clear what Apple was thinking this time around – the iFone trademark was filed in Mexico in 2003, a full four years before Apple filed to trademark the iPhone. Despite the rather obvious priority issue, Apple decided to sue iFone in 2009 in an attempt to invalidate the company’s name for being too similar to the iPhone. The predictable response was a countersuit by iFone, and the court battles have been swinging in iFone’s favor ever since.

The move could prove costly to Apple in more ways than one. In addition to losing the ability to sell devices under the iPhone trademark in Mexico, iFone is also suing for damages for past infringement, asking for a minimum of 40% of all iPhone sales to date in the Mexican market. While those numbers aren’t nearly as large as they are in the U.S., it still would represent a substantial payment. It's not yet clear whether the embargo on using the iPhone name will go into effect before sales of the iPhone 5 start on Friday, or if this will trigger Apple to loosen the purse strings to negotiate a settlement with iFone, but given the circumstances it would seem that Apple has precious little leverage this time around. 

Clearly lawsuits can be a double-edged sword.