A ruling by the Mexican Institute of Industrial Property (MIP) has absolved Apple of any penalties over trademark infringements in a lawsuit filed by Mexican telecommunications company iFone.
However, iFone will continue to seek damages from local carriers Movistar, Telcel and Iusacell, which used the term "iPhone" to market their services.
The MIP made the ruling with the logic that Apple had no liabilities because of the difference in markets between Apple and iFone. Apple's iPhone is a smartphone that uses telecommunications services, while iFone's phonetically identical brand is a telecommunications services provider.
However, while Apple emerged from iFone's lawsuit unscathed, it is the Mexican carriers that are offering the iPhone in their services that will be facing legal action. Because they are in the same industry as iFone, these carriers are no longer allowed to use the iPhone brand on their advertisements.
The MIP has imposed a monetary penalty of over $100,000 each on the three local providers. The companies are also given 15 days to eliminate all mentions of the iPhone on their advertising materials across all platforms. The companies can continue selling the iPhone, but they are not allowed to mention the device's name in their marketing materials.
MIP's ruling also opens up the opportunity to file a civil suit against the three affected companies. iFone lawyer Eduardo Gallastegui said that the company will soon file the civil suit.
Gallastegui also said that iFone can expect to receive damages of at least 40 percent of the total sales that the three service providers made while using the iPhone brand. The figure for the total damages can reach over $1 billion, he said.
Gallastegui adds that, if the three companies are ruled to pay damages to iFone, Apple would have to provide compensation for them.
"The one that started this whole controversy five years ago was Apple. They're the ones who tried to cancel the brand name of iFone," he said.
Apple filed a lawsuit against iFone for trademark infringement, but they lost the case because iFone registered their name in 2003, which was around four years before Apple launched the iPhone. Apple tried in 2013 to overturn the prior ruling to claim sole ownership of rights to the iPhone name, but the Supreme Court of Mexico denied the company's bid.
There have been reports stating that iFone may seek damages of as much as $1.5 billion from Apple for trademark infringement. The status of the lawsuit is yet unknown.
