28 Apr 2021

Delhi High Court Refuses to Grant Interim Relief to 'PhonePe' in its Plea against 'BharatPe'

FACTS:

PhonePe sought a interim injunction lawsuit against BharatPe over the use of  ‘Pe’ or any deceptive variant of ‘PhonePe’ being identical and/or similar to the plaintiff’s trademark ‘PhonePe’ with regards to online payment services as it amounts to infringement of its registered trademark. Additionally, PhonePe alleged that the defendants had been passing off services as those of the plaintiff. Both the petitioners and defendants provide online payment services, the mere difference being that the defendant’s services are available exclusively to merchants whereas the plaintiff’s services are available to anyone who downloads the App.

 

ARGUMENTS BY THE PLAINTIFF:

  • The plaintiff submitted that their trademark and its variations in English and Devanagari have been adopted and have been in use since 2015.
  • “Pe” is an essential, dominant and distinguishing feature of the plaintiff’s registered trademarks and that “Pe” is an invented word, not to be found in the English dictionary.
  • Moreover, a consumer of average intelligence and imperfect recollection, on seeing the defendants’ mark “BharatPe”, would notice the “Pe” suffix and associate the services of the defendant with that of the plaintiff.
  • The defendants have started to use their mark ‘BharatPe’ only since 2018 by which time the reputation and goodwill of plaintiff was well established.

 

ARGUMENTS BY THE DEFENDANT:

  • The defendants submitted that the registration by the plaintiff was acquired on the entire word “PhonePe” and that the plaintiff was not a registered proprietor or permitted user exclusively of the words, “Pe”, “Pay” or the Devnagari “??”.
  • The defendants thus argued that the plaintiff’s mark could not be dissected and had to be compared as a whole.
  • Furthermore, "BharatPe" was a mark coined and used since 2016 in order to build a single QR code for merchants, to facilitate making of payments, which would work across all consumer UPI based applications, such as GooglePay, Paytm, WhatsApp Pay, AmazonPay, SamsungPay and PhonePe.
  • The dominant elements of the competing marks is not the suffix “Pe” but the words “Phone” and “Bharat”, which are phonetically, visually and structurally different.

 

OBSERVATIONS BY THE COURT:

  • On analysing the relevant provisions of the Trademark Act and various judgements cited, the HC observed that exclusivity can be claimed, and infringement/passing off alleged, only in respect of the entire mark, not in respect of a part thereof.
  • No exclusivity can be claimed, over a descriptive mark, or a descriptive part of the mark, even by misspelling it.
  • Infringement of a part can be asserted when the part so copied is the dominant part or the essential feature unless it has acquired a secondary meaning.
  • The nature of services provided by PhonePe and BharatPe are different and thus the consumers who deal with such applications may be prima facie expected to know the difference. Hence, no case of passing off prima facie exists.

 

JUDGEMENT:

  • The Court dismissed the application for interim injunction.
  • Additionally, the court directed the defendants to maintain accounts of the amounts earned as a result of use of the impugned “BharatPe” and to file six-monthly audited statements before the Court.