Trademark Infringement Case

A complaint filed by PhonePe requesting a permanent injunction against BharatPe, claiming that the latter’s use of the mark “Pe” infringes on its registered trademark and constitutes service passing off. In relation to online payment systems, it was also claimed that the use of “Pe” or some other misleading version of “PhonePe” that is similar or identical to its trademark leads to trademark infringement.

Phone Pe Submission:

The said trademark and its variants, both in English and Devnagri, were invented and introduced by the plaintiff in 2015, and have been used by the plaintiff on a daily basis since then. Furthermore, it was argued that ‘Pe’ was an ‘invented word’ not found in English and was an important, dominant, and defining attribute of the plaintiff’s registered trademark.

Furthermore, it was said that any user of average intelligence and recollection would note the suffix Pe upon seeing the mark “Bharat Pe”. PhonePe also said that BharatPe provided no reason for keeping Pe and that the defendants copied all of PhonePe’s identifying and important characteristics, leading the public to believe that the two companies are affiliated.

BharatPe’s submissions:

Defendants, on the other hand, claimed that PhonePe was not the authorized owner or beneficiary of the words “Pe,” and that the registration was for the entire phrase “PhonePe, not simply Pe.” As a result, it was also said that “BharatPe was a symbol coined and invented in order to provide a single QR code for merchants, to simplify payment processing through all consumer UPI-based apps, including GooglePay, Paytm, WhatsApp Pay, AmazonPay, Samsung Pay, and PhonePe. 

On the accusation of using deceptively misleading and identical trademarks, it was claimed that the rival trademarks couldn’t be analyzed and had to be compared as a whole and that PhonePe couldn’t claim infringement or passing off based solely on the “Pe suffix in the PhonePe mark.”

Court’s Observation:

After reviewing the applicable provisions of the Trademark Act as well as the relevant judicial authority, the High Court came to the following conclusion:

“Exclusivity can only be asserted, and infringement/passing off can only be suspected if the plaintiff’s entire mark is included, not just a portion of it. The registration of the whole mark does not grant the holder of the mark exclusive access to any part of the mark”.

According to the legal situation, no exclusivity can be claimed for a descriptive mark or a descriptive portion of the mark, except though it is misspelling it. The Court determined that “PhonePe” and “BharatPe” are both composite marks that cannot be broken down into “Phone” and “Pe” in the case of the appellant and “Bharat” and “Pe” in the case of the defendants by applying the law to the facts of the case.

The Court has stated that PhonePe cannot assert exclusivity over the “Pe suffix” and no violation can be asserted based on a portion of a registered trademark. According to the Court, “Had the complainant used the suffix “Pay” instead of Pe, i.e. had its registered trademark been “PhonePay,” the plaintiff would have been unable to assert exclusivity over the “Pay” suffix, or file a lawsuit for violation against the defendants if their trademark had been “BharatPay”. The legal status cannot be changed by misspelling “pay” as “Pe.” As a result, the plaintiff will be only as able to assert exclusivity over the suffix “Pe” as it would be over the suffix “Pay” of the trademark. 

The Court held that because the nature of services offered by PhonePe and BharatPe differed, customers dealing with such applications should be able to tell the difference prima facie. As a result, there is no basis for granting an interim injunction against the defendant. Other submissions made by the petitioner and defendants do not need to be discussed, particularly at this preliminary level, in light of the above findings. When rejecting the appeal for an emergency injunction, the Court developed the final observation.

The Court gave the order, the defendants are, however, required to keep track of the amounts received as a result of using the disputed BharatPe mark and to file audited documents six times a year with this Court. 

Conclusion

The Delhi High Court denied PhonePe’s request for a temporary injunction against BharatPe for inappropriately using the same and equivalent suffix “Pe.” The court reasoned that PhonePe does not assert exclusivity exclusively over the Pe’ suffix.

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