Apple has lost a court battle in Mexico over the iPhone's name rights in the country.

A Mexican court ruled down Apple's injunction request as the iPhone brand is phonetically similar to iFone, a Mexican brand that registered its name four years prior to Apple's filing for the iPhone brand mark in Mexico. Apple initially filed a petition in 2009 requesting that the company stops using the iFone brand in order to avoid customer confusion.

"It's the third time Apple has lost; iFone is fully entitled to the use of its brand name," said Eduardo Gallástegui, iFone's corporate lawyer.

"A Mexican court cited the earlier trade name registration in refusing Apple's request, and the Mexican firm later countersued for damages, which could amount to 40 percent of iPhone sales revenue in Mexico. iFone's countersuit also sought to block Apple from selling the iPhone under its current name in Mexico," reported Electronista.com.

The Verge notes that the court ruling will still allow Apple to sell iPhones in Mexico.

"As you'd expect, companies like Apple file to protect ultra valuable trademarks like 'iPhone' in every class they can come up with an argument for, since it protects against infringement and brand dilution. That's where iFone comes in - it has a single Mexican trademark on the word 'iFone' in Class 38, which covers telecommunication services. Apple runs a few of those, like iMessage and FaceTime, and indeed, it has a Class 38 US trademark on 'iPhone'," reported The Verge.

Apple already owns two iPhone trademarks in Mexico in Class 9 and Class 28. These trademarks cover electronic game devices. In 2009, Apple decided that iFone's Mexican Class 38 mark was not actively used, and the company filed a lawsuit to try and get it canceled so that they could register their own pending Class 38 mark on 'iPhone'. However, iFone disagreed saying that they were still using the mark and Apple lost another court battle trying to cancel the iFone mark in Class 38.

Apple has been embroiled in patent lawsuits with Samsung recently. Now, with the issue relating to iFone in Mexico time will tell if iPhone sales is affected in the country.