"Cannot Claim Exclusivity On 'Pe' Suffix": Delhi High Court Refuses To Grant Interim Relief To PhonePe In Its Plea Against BharatPe

The Delhi High Court recently refused to grant interim injunction to PhonePe in its plea seeking permanent injunction against BharatPe for allegedly using similar and identical suffix "Pe" in its application.

While dismissing the said application, a single judge bench comprising of Justice C Hari Shankar prima facie observed that PhonePe cannot claim exclusivity solely over the "Pe" suffix, as no infringement can be claimed on the basis of part of a registered trademark.

The observation came in a plea filed by PhonePe seeking permanent injunction against BharatPe by alleging that the mark "Pe" used by the latter infringes its registered trademark and also amounts to passing off of services. It was also alleged that the use of "Pe" or any other deceptive variant of "PhonePe" being similar or identical to its trademark with regards to online payment services amounts to trademark infringement.

Senior Advocate Jayant Mehta appeared on behalf of PhonePe Private Limited whereas Senior Advocate Gaurav Pachnanda appeared for the defendants.

Submissions of Phone Pe

It was the case of PhonePe that the said trademark and its variations, in English and Devanagari both, were coined and adopted since 2015 and have been used by the plaintiff regularly ever since. Moreover, it was argued that "Pe" was an essential, dominant and distinguishing feature of the plaintiff's registered trademarks and was an "invented word" not to be found in the English dictionary.

Furthermore, it was also submitted that any consumer of "average intelligence and imperfect recollection" on seeing the mark "BharatPe" would notice the suffix "Pe".

PhonePe also submitted that no justification for retaining "Pe" was given by BharatPe and that the defendants have copied all distinguishing and essential features of "PhonePe" thereby causing confusion in public into presuming an association between the two.

Submissions of BharatPe

On the other hand, it was the case of defendants that PhonePe was not the registered proprietor or permitted user of the words, "Pe" abd that the registration was acquired on the entire word "PhonePe" and not just "Pe". In view of this, it was also submitted that "BharatPe" was a mark coined and invented 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.

On the allegation of using deceptively confusing and similar trademark, it was argued that the competing trademarks could not be vivisected and had to be compared as a whole and that it was not permissible for PhonePe to allege infringement or passing off merely on the basis of the "Pe" suffix in the "PhonePe" mark.

Observations of the Court

Analyzing the relevant provisions of the TradeMark Act and the judicial authorities on the subject, the High Court observed thus:

"Exclusivity can be claimed, and infringement/ passing off alleged, only in respect of the entire mark of the plaintiff, 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."

The Court also noted that according to the legal position no exclusivity can be claimed, over a descriptive mark, or a descriptive part of the mark, even by misspelling it.

Applying the said law to the present facts of the case, the Court prima facie observed that "PhonePe" and "BharatPe" are both composite marks and that these marks cannot be dissected into "Phone" and "Pe" in the case of the plaintiff and "Bharat" and "Pe" in the case of the defendants.

Holding this, the Court also observed that PhonePe cannot claim exclusivity solely over the "Pe" suffix, as no infringement can be claimed on the basis of part of a registered trademark.

"Had, instead of "Pe", the plaintiff used the suffix "Pay", i.e. had its registered trade mark been "PhonePay", the plaintiff would clearly not have been able to claim any exclusivity, over the "Pay" suffix, or bring a case for infringement against the defendants, had their trademark been "BharatPay". By misspelling "Pay" as "Pe", the legal position cannot change. The plaintiff would, therefore, be as entitled to claim exclusivity over the suffix "Pe", as it would have been, had the suffix in its trademark been "Pay"." The Court observed.

Observing that the nature of services provided by PhonePe and BharatPe was different, the Court held that the consumers who deal with such applications may be prima facie expected to know the difference.

"No case for grant of interim injunction against the defendant, therefore, exists. In view of the above findings, other submissions advanced by the plaintiff and the defendants do not require to be addressed, especially at this prima facie stage." the Court observed while dismissing the application for interim injunction.

"The defendants are, however, directed to maintain accounts of the amounts earned as a result of use of the impugned "BharatPe" mark and to file six-monthly audited statements, before this Court, in that regard." The Court directed.

Title: PhonePe Private Limited v. Ezy Services & Anr.

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