Fintech wars- PhonePe” strikes at “BharatPe” over use of “Pe” akin to “Pay”
Plaintiff provides online payment services through its App under the name/mark “PhonePe.” Plaintiff is aggrieved by the use of the element “Pe,” which is a misspelling of the word “Pay,” as part of Defendant’s mark “BhartPe.” Defendant also provides payment services through App but are directed towards merchants, whereas the PhonePe services are for both consumers and merchants.
- The Plaintiff adopted the mark “PhonePe“, in the year 2015 and has the registration of these mark and their variants since the year 2016;
- in Devanagri represented as “Pe” is an innovative and fanciful adaptation by Plaintiff and popularised “Pe” as .
- “Pe” is an invented word not to be found in the English dictionary. It has no obvious meaning, and as such “Pe” is a dominant and essential feature of Plaintiff’s trademark “PhonePe“.
- The mark “PhonePe” has acquired goodwill and reputation and has a vast customer base;
- “Pe” is an essential and dominant feature of the Plaintiff’s mark;
- Defendant, “BhartPe” in December 2018 adopted and launched its App. On Plaintiff’s objection, Defendant dropped the use of and changed its mark; and
- Defendant itself has applied for registration of the impugned mark thus, it cannot take the plea of descriptiveness/common to trade.
- Plaintiff’s mark “PhonePe” is a composite mark, and no separate registration has been obtained for “Pe,” and thus cannot claim exclusivity on “Pe” per se;
- Defendant has been using its mark “BhartPe” since 2016 and was highly fanciful and inherently distinctive;
- The competing marks when compared as a whole are not similar, and there will be no confusion since the customers would easily identify which App to use since the nature of transactions through the competing Apps are different;
- The marks cannot be dissected and should be compared as a whole;
- Plaintiff took a contradictory stand when third parties “Pe” marks were cited against its trademark application;
- Suffix “Pe” was merely a misspelling of the word “Pay.” Plaintiff cannot enforce exclusive rights in respect of such a misspelled word unless it has acquired a secondary meaning;
- Acquisition of secondary meaning is a matter of evidence and trial and, in any event, could not be pleaded based on three years’ use; and.
- Several entities use the expression “Pay” as a suffix, such as GooglePay, AmazonPay, SamsungPay, WhatsAppPay etc.
The court examined the rival contentions and various judgments cited on behalf of the parties and dismissed the injunction application of the Plaintiff.
Important principles laid down by the court:
Whether exclusivity can be claimed in part of a registered trade mark?
- Exclusivity can be claimed only in respect of the entire mark, and not in respect of part thereof. The registration of the whole mark cannot confer any exclusive rights, on the holder thereof, to any part of such registered mark unless that mark is separately registered.
- The Plaintiff can still maintain infringement on the ground that a part of the mark that has been copied is the dominant part of the trademark.
- Rights over misspelt mark?
No exclusivity can be claimed, over a descriptive mark, or a descriptive part of the mark, even by misspelling it.
- Evidence of extensive use at prima facie stage?
A mark that has acquired secondary meaning must show that the secondary meaning has i) entirely displaced the primary descriptive meaning of the mark and ii) has resulted into the mark becoming identified exclusively with the goods or services of the proprietor.
The Plaintiff plea of estoppel against Defendant is not tenable in law by saying that Defendant itself had applied for registration of trademark, therefore it is estopped from taking the plea of generic/descriptive nature of the mark. Two reasons were cited by the court:-
- The court cannot overlook either Section 9(1)(b) of the Trademark Act (which prohibits registration of descriptive trademarks) or 30(2)(a) (which postulates that there can be no infringement of a descriptive trademark), which are in the nature of statutory interdictions.
- The Defendant, in the present case, has applied for registration of the entire ‘BharatPe’ mark, and not merely of the suffix ‘Pe’. Therefore, no plea of estoppel can inhibit Defendant from contending that the suffix ‘Pe’ is generic and descriptive.
Final order of the court
- “PhonePe” and “BharatPe” are both composite marks and cannot be dissected.
- The Plaintiff cannot claim exclusivity solely over the “Pe” suffix, and no infringement can be claimed based on the part of a registered trademark.
- “Pe“, as used by the Plaintiff, admittedly connotes the expression, and meaning, “pay”.
- “pay” is descriptive of the services provided by the parties. By misspelling “Pay” as “Pe“, the legal position cannot change.
- Whether Plaintiff has been able to establish that the “Pe” suffix had acquired distinctiveness and secondary meaning, it is essentially a matter of trial. The evidence presently at hand is insufficient to come to a definitive conclusion that the “Pe” suffix would, in the public consciousness, indelibly be associated with the Plaintiff’s services.
- Apart from the common suffix “Pe”, the competing marks PhonePe” and “BharatPe” are not similar.