Madras High Court Criticises PhonePe For Taking Contrary Stands About Its Trademark Before Various Forums, Dismisses Appeal Against DigiPe

Dismissing the appeals, the bench of Chief Justice SV Gangapurwala and Justice PD Audikesavalu noted that the appellant PhonePe had taken different stands before different courts on similar issues. The court noted that PhonePe was not the innovator of the” Pe” mark, and though it had claimed to have coined the distinctive “PhonePe” mark, the stand taken before the Delhi High Court was that the mark was coined by “CardPe”.

“On the given facts and circumstances of the case, it is difficult to reconcile the plaintiff's stand taken before different courts. The stand taken before the Registrar of Trademark was absolutely different and not coherent with the stand taken in the present matter. The stand taken before the Delhi High Court while litigating against “BharatPe” was also completely different. The plaintiff in the said case admitted that “CardPe” was the prior user and adopter of the “Pe” formative mark. The Plaintiff is not the innovator of the “Pe” formative mark. The learned Single Judge has properly marshalled the same,” the bench noted.

PhonePe had filed an application seeking to restrain the defendants from infringing its registered trademark and from passing off the trade dress/copying the contents of its domain name.

PhonePe claimed that it had coined the distinctive “PhonePe” mark in September 2015 for its services and platform and that the “Pe” in the trademark was adopted as a unique source identifier that conferred inherent distinctiveness and was automatically entitled to protection as an essential feature of the “PhonePe” trademark.

PhonePe informed the court that it had issued a cease-and-desist notice on August 5, 2022 to the respondents. According to PhonePe, DigiPe in its reply had admitted to being aware about the existence of the mark and informed that they would amicably settle the issue but still dishonestly proceeded to file a trademark application for registration of “DigiPe”.

PhonePe further submitted that though DigiPe claimed to cater to merchant establishments, they had stated on their website that DigiPe catered to the needs of both merchants and customers.

On the other hand, DigiPe claimed that the marks “PhonePe” and “DigiPe” were dissimilar and to claim a trademark for a common mark was barred by Section 17 of the Trademarks Act 1999. It was also argued that the word “PhonePe” meant “on the phone” and was thus generic and not descriptive or had any distinctiveness.

DigiPe also submitted that PhonePe had admitted before the Delhi and Bombay High Courts that it was not the innovator of the mark and this fact had been suppressed before the single judge. It was submitted that the balance of convenience was in favor of the defendants as similarly placed defendants were not restrained on account of suppression and forum-shopping by the plaintiff. Further, since the suit itself was ready for trial, DigiPe prayed for the dismissal of the appeal.

The court noted that the suffix “Pe” used by PhonePe was not one of its kind and there were other trademarks in the market. Further, the court noted that while registering the trademark, PhonePe had taken a stand that the marks already existing were not similar to that of PhonePe since PhonePe’s mark, taken as a whole was distinct from such marks.

The court also noted that the area of operation of both parties was different in that since PhonePe acted as a container for various payment instruments and provided services to businesses and merchants, DigiPe provided its facilities only to merchant establishments.

Thus, considering the facts of the case, the court did not find it fit to substitute the views of the single judge. Further, since the suit itself was ready for trial, the court opined that the parties could adduce their evidence before the court. The court also made it clear that the suit had to be decided based on evidence and the observations in the present matter were only prima facie and should not influence the judge.

Case Title: PhonePe Private Limited v Digipe Fintech Private Limited

Citation: 2023 LiveLaw (Mad) 242

Counsel for the Appellant: Mr.Sathish Parasaran Senior Counsel for M/s.P.Giridharan, H.Siddharth and Siddharth Govind

Counsel for the Respondents: Mr.R.Sathish Kumar