The Institute of Industrial Property's ruling comes after the Cupertino firm took action against local manufacturer Gradiente over its iphone Neo One Android handsets.
Gradiente trademarked the brand back in 2000, seven years before Apple, but did not release a product bearing the name until late last year.
The Brazilian company now has the option to sue Apple for exclusive use of the term in the mobile phone sector, but the tech giant may continue to use it for clothing, software and other products unopposed.
Apple is planning to appeal against the ruling on the grounds that it was first to release a smartphone bearing the moniker in the territory, BBC News reports.
However, the company has declined to issue an official statement on the ruling.