As of right now, Gradiente Electronica can legally sell their Android smartphone with the "iPhone" name. A court decision was made that ruled that Apple doesn't have exclusive rights to the "iPhone" trademark in Brazil. The reason for this is because Gradiente Electronica actually registered the iPhone name way back in the year 2000, 7 years before Apple claimed it.
Gradiente Electronica's Android device is called the iPhone Neo One and they had just released it in December 2012. Apple feels that they can use that against them in an appeal, because Gradiente didn't release a product with the "iPhone" name until 12 years after they had registered it. Things could also turn on Apple if Gradiente decides to sue for exclusive rights to the "iPhone" name themselves.
Gradiente had stated before that they're open to discussing the issue with Apple if Apple wanted. They're not opposed to any agreements. However, if Gradiente does sue Apple for exclusive rights to the "iPhone" trademark, that would result from Apple not being able to sell any of their iPhone products (iPhone 5, iPhone 4S, etc) in the country of Brazil.
Despite a possible lawsuit from Gradiente, Apple will continue to pursue an appeal. There's a good chance that they may be approved for an appeal, and that will result in another long, trademark battle between the two companies. It feels like Apple should have its own law firm considering how many legal battles they've entered into just this past year.