By Malcolm McBratney,David Downie,Paul McLachlan,Belinda
Breakspear and Alex Hutchens
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.
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
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
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
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
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
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The authors discuss 5 key ways Australian businesses can mitigate risks of engaging in expensive trade mark litigation.
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