According to Reuters, Apple has been stripped of the right to use the iPhone name in Brazil.
Instead, a locally produced offering will carry the name. IGB Eletronika registered the name in 2000, 7 years before Apple started manufacture of their phone with the same name.
With a price tag of 599 reais (US$302), it is unlikely that anyone is going to be confused by the naming confusion. The Apple iPhone 4S retails at R$2000. I was unable to find prices for the iPhone 5 on Apple's Brazilian website.