|Gradiente launched its|
in Brazil in December
Brazilian regulators have ruled that Apple does not have exclusive rights to use the "iPhone" trademark in the country.
But the US tech giant has already lodged an appeal against the decision with the Brazilian regulators.
The ruling is the result of a local company, Gradiente Eletronica, registering the name in 2000, seven years before the US firm.
Apple can continue to sell iPhone-branded handsets in Brazil.
But the decision means that Gradiente has an option of suing for exclusivity in South America's biggest market.
The Institute of Industrial Property (INPI) told the BBC that its decision only applied to handsets, and that the California-based company continued to have exclusive rights to use the iPhone name elsewhere including on clothing, in software and across publications.
INPI added that Apple had argued that it should have been given full rights since Gradiente had not released a product using the iPhone name until December 2012.
Apple is asking the INPI to cancel Gradiente's registration through expiration - it is arguing that the Brazilian firm did not use the name between January 2008 and January 2013.
The Manaus-headquartered company now sells its Android-powered iPhone Neo One for 599 reals ($304; £196).
Bloomberg previously reported that the chairman of Gradiente had said: "We're open to a dialogue for anything, anytime... we're not radicals."
Apple's most recent financial results revealed its cash reserves had grown to $137bn (£88bn).
The firm's manufacturing partner, Foxconn, currently produces iPhones and iPads among other equipment at its facilities in Brazil.