Apple loses right to iPhone name in Brazil | Hacker News Reader

Apple loses right to iPhone name in Brazil

cnn.com

40 pointsanigbrowl31 comments

I wonder what Apple would do in a hypothetical scenario where a company like Gradiente Eletronica gets its trademark and doesn't want to settle. I really can't see them renaming any of their products, so perhaps they'd withdraw from the market until the problem was resolved. Or not?

Gradiente is a dying company, they just want some cash. BTW, they don't make those phones, only rebrand then.

> Gradiente is a dying company

Not really. They probably will be one of Brazil's big players in the next 10 years.

Loses right? They never had it to begin with in Brazil. Also, I may not remember it accurately, but didn't Apple have to buy the rights for the iPhone name in US from Cisco, too? I don't think it was publicized that much back then, but I think I remember something along those lines.

You are correct. Just adding, Brazilian IP law is not similar to the american. The trademarks must be very specific and cannot be used for more than, usually, a single product. That said, you can't own a word, you can obtain exclusivity of naming a specific good (in that case, a cell phone).

I own two trademarks here and guess what, not even the domain name I managed to reclaim, the owner uses the same name for a different type of business which I don't own the exclusivity rights.

Brazilian IP law is one of the most free in the word and among many things, software cannot be patented, non-specific, generic ideas are not even evaluated for a patent. Music can be freely played and shared unless you are doing it commercially.

This is why I can't even download bass tabs on most sites, RIAA managed to block brazilians from 40% of youtube, etc.

This is what patent laws should be everywhere.

Brazilian here, and I think not...

There are several cases here where an inventor receives no money at all and a lot of people get rich with it's invention, because of this law.

I think it's too loose and also our courts are terrible, there is a case from a guy that waited 20 years to win a first instance sue against several phone companies and after losing it they just appealed... so he will have to wait 10 more years, and probably die or go bankrupt.

Source: http://www1.folha.uol.com.br/mercado/1161871-inventor-do-bin...

The iPhone name was first used by Infogear in 1998, which was acquired by Cisco. Apple and Cisco settled a trademark dispute over it in 2007 so that both companies can continue using the name.

http://en.wikipedia.org/wiki/Linksys_iPhone

Presumably the trademark is useless to Linksys now, as everyone associates the name with Apple.

I think you're thinking of IOS.

Actually Linksys had an iPhone.

http://www.engadget.com/2006/12/18/cisco-not-apple-announces...

It's both. I believe Apple used the iPhone name and then had a spat with Cisco about it, which was settled. When they wanted to introduce the term iOS, they worked out a deal with Cisco beforehand (I was an intern at Cisco at the time and remember hearing about it).

This kind of news makes me go "muahaha <evil laugh>".

A substantial pain no doubt to have to rebrand the most valuable product on the planet just for the Brazil market, but given it's such a huge market I'm sure they'll figure it out.

Apple Phone? iPod Phone? iOS Phone?

They don't need to rebrand - the article states they just don't have exclusivity.

Brazil is one of those very dysfunctional markets. Apple (well Foxcon on Apple's behalf) had to setup final assembly their directly to get around crazy tarrif rules, which assume most value is added during final assembly! Sure, Apple tries its hardest, but at some point it won't be worth it to them.

I worked for the brazilian IRS for twelve years, I will say you just invented that.

Imported iphone taxes: 60% import taxes + 7%-15% sales state tax if you are a reseller or 0% if you are the customer. 0% industrial tax.

Made in brazil taxes: 7-15% sales state tax, 6% industrial taxes.

Really?

The 60% rate applies only to individuals; companies generally pays much less and in the case of cellphones it currently stands at 18.1%.

In which state sales tax (ICMS) is 7%? Or even 15%? All the big states have ICMS rates north of 20%.

Industrial tax (IPI) for electronics is 8%.

Really. Those are nominal values which exclude taxes being paid upfront, which leads to extensive reduction. The legislation is more than 600 pages long don't you think that a simple google search will get any useful answer.

Not really. Dealt with this myself. FOB is often 70%+ on electronics. Big companies (Intel, Dell, IBM, Cisco) usually solve the problems by building some stuff in market and some stuff out of market and then using the savings on their domestic stuff to bring the price of imported stuff down. They just spread the tax costs around and make a variable margin on everything to have things as reasonably priced across the board for customers.

> Imported iphone taxes: 60% import taxes + 7%-15% sales state tax if you are a reseller or 0% if you are the customer. 0% industrial tax.

When Apple assembles iPhones in Brazil, how much do they pay in taxes on the components like the screen and flash from Samsung or LG? How much do they pay on the software value add done in California?

Final assembly is just a small part of making iPhones, so moving it to Brazil for a tax advantage is a no-brainer, but Brazil could still make a fuss about components, which they don't seem to be doing; this is a giant loophole.

I'm probably misunderstanding something, but how does this contradict seanmcdirmid? Why wouldn't Apple want to avoid 60% import taxes?

Because the minimum wage in brazil is 25x higher than the chinese...

A) 25x? I'd have to be an idiot to believe that. The ratio isn't that high between the USA and China.

B) When I looked this up the ratio between Brazil and China ranges between 2x and 3.5x. (China doesn't have a single national minimum.)

C) On the more important comparison, PPP per capita GDP the ratio is less than 2x.

It seems like 60% tariffs are still significant. We're all acquainted with the nearly universal practice of doing most manufacture in a cheap nation and then doing only the final assembly (or sometimes disassembly) in the importing nation. If this isn't what you're seeing you haven't been paying attention.

A factory worker at Foxcon these days is probably making 4K RMB a month, which is around $641. It is perhaps half to a third of what a similar factory worker would make in a first world country (if such jobs existed).

Also, note that China also has a significant import tax, and you don't get around it by making things in China! Special export zones are complicated, so basically everything is imported. The markup on China vs. US is about 20-30% right now, not as bad as before.

As noted in another thread, wages in Brazil aren't that great, its still a 2nd-world country. Perhaps ahead of China, but the growth vectors are fairly clear that China will overtake Brazil soon in per-person GDP and probably wages after that.

The problem is not what a company has to pay to their employees, but what they have to pay to the government for each employee they have.

The funny thing is that Apple sells those locally made products for about the same price they sold the imported (taxed) ones.

I didn't think Apple sold iPhones in Brazil before they started building them there; are you sure you aren't referring to gray market imports? If so, there is probably some amount of tax avoidance going on. Doesn't Brazil have a high VAT?

Apple definitively sold iPhones in Brazil before building them here, as they did with the iPad. VAT varies slightly from state to state, mostly in the 20-22% range.

It's due to cost rebalancing across the entire line of Apple products, including those that are imported.

I would suggest iPhony (how it's pronounced in Portuguese) but that's probably not a good idea.

It's a tough spot considering they have planned the first official Apple store to be built in Rio (might already be in the process of being built).

Unrelated anecdote. My audio cable was shot on my MBA and so I asked an authorized repair shop (in Rio) what they'd fix it for and they said R$475 (roughly US$240). Instead, I bought the piece online from iFixit (US$20) and took my MBA to a corner repair shop and had it repaired right quick for R$30. That fixed the issue but, if I were Apple and worried about a product name, I'd find myself more concerned with products overheating as my computer was extremely hot on most days, no matter the season.

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