Deutsche Telecom can block buyers of Apple Inc's iPhone from using the handset on competing networks, a German court ruled today, overturning an injunction won by Vodafone last month.

The Regional Court of Hamburg said in a statement today it lifted an injunction obtained by Vodafone that stopped Deutsche Telekom's T-Mobile unit from selling the device only with exclusive contracts or software that restricted use on competitors' wireless systems.

Vodafone's German subsidiary had won the temporary ban while a court in Hamburg decided whether the exclusive sale of Apple's handset dedicated to one network broke national rules over network access.

Deutsche said it will now offer iPhones with contracts exclusively. During the period the injunction was in effect, T-Mobile, the largest mobile phone service provider in Germany, offered unlocked iPhones for $1,481, a price high enough to discourage sales.

T-Mobile said it remained open to suing for damages should a review of sales reveal that locked iPhones had fallen after the ban two weeks ago. Official sales figures have yet to be release, but T-Mobile had sold about 10,000 iPhones on November 9, the day they went on sale in Germany.

Vodafone had originally sought the injunction against T-Mobile's exclusive contract Apple, saying that such a partnership would undermine the industry's business model in the country. The agreement is similar to other's around the world, however.

Apple's strategy so far had been to offer the iPhone through an exclusive mobile operator's in each region, with AT&T serving the United States, O2 serving Britain, T-Mobile in Germany, and France Telecom's Orange wireless arm in France.

Orange began selling its iPhone in France last week and in addition to two-year contracts, it also offered shorter plans including some that permit a purchaser of the mobile phone to unlock the phone after a shorter time period.

The Cupertino, California-based electronics maker has sold over 1.4 million iPhones to date and hopes to sell 10 million in 2008, helped by its launch in Europe, then in Asia next year.