PhonePe v. BharatPe: Delhi High Court Refuses To Grant Interim Relief Holding No Infringement of PhonePe Trademark

PhonePe v. BharatPe: Delhi High Court Refuses To Grant Interim Relief Holding No Infringement of PhonePe Trademark

The Delhi High Court (HC) in the case titled PhonePe (Plaintiff) v. Ezy Services & Ors. (Defendants) refused to grant an interim injunction order against 'BharatPe' held that the said mark is not in violating the trademark held by "PhonePe".

The single-judge of the HC Justice C Hari Shankar held that the terms 'Phone' and 'Bharat' are not identical and the plaintiff cannot exclusive claim over the suffix 'Pe'.

The factual matrix of the case is that the plaintiff approached the HC and submitted that the term "Pe" was an 'invented word' and it was an essential, dominant and distinguishing feature of its registered trademarks in the name of 'PhonePe'.

The plaintiff contended that the use of suffix 'Pe' by the defendant that is offering identical services is amounting to infringement of its registered trademark and it also amounts to passing off.

The defendant argued that the plaintiff was not the registered proprietor or permitted user of the words, "Pe", "Pay" or the Devnagari "पे". It was further contended that the registration was over the entire word "PhonePe" and the same cannot be dissected.

Analyzing legal position of infringement under Trademarks Act

The HC analyzed the provisions of the Trademarks Act and also place reliance on various judgments. The Court highlighted the legal position of the 'violation of trademarks'-

1. "Exclusivity can be claimed, and infringement/passing off alleged, only in respect of the entire mark, not in respect of a part thereof. The registration of the whole mark cannot confer any exclusive rights, on the holder thereof, to any part of such registered mark.

2. It is open, however, for the plaintiff to assert infringement on the ground that a part of the mark has been copied by the defendant, provided the part so copied is the dominant part or the essential feature of the plaintiff's trademark.

3. No exclusivity can be claimed, over a descriptive mark, or a descriptive part of the mark, even by misspelling it.

4. There is one exception, where the descriptive mark or descriptive part has attained distinctiveness, i.e. it has acquired a secondary meaning, indelibly linking the mark, in the mind of the consumer, to the goods or services provided by the proprietor thereof.

5. Acquisition of secondary meaning is essentially a matter of trial and evidence. Evidence of extensive use is insufficient."

Based on the aforesaid analysis the Court rejected the claim of the plaintiff and stated that both are the composite marks and the plaintiff cannot claim exclusivity solely over the "Pe" suffix as no infringement can be claimed on the basis of part of a registered trademark.

In the cases Big Tree Entertainment and Bharat Biotech International, the Court held that the issue of whether a descriptive mark had attained distinctiveness, or had acquired a secondary meaning, was a matter of evidence, which could be asserted only during trial.

Conclusion of the HC

- "PhonePe" and "BharatPe" are both composite marks.

- 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.

- The plaintiff cannot claim exclusivity solely over the "Pe" suffix, as no infringement can be claimed on the basis of part of a registered trademark.

- "Pe", as used by the plaintiff, admittedly connotes the expression, and meaning, "pay".

- The plaintiff and the defendants provide service by which online payments can be made, the expression "pay" is clearly descriptive of the services provided by the plaintiff and the defendants.

- By misspelling "Pay" as "Pe", the legal position cannot change. The plaintiff would, therefore, be entitled to claim exclusivity over the suffix "Pe", as it would have been, had the suffix in its trademark been "Pay".

- The plaintiff has been in business only since 2016, using the "PhonePe" mark. The defendants have also claimed extensive use of their "BharatPe" mark. This, too, inhibits the Court from arriving at any prima facie conclusion that the "Pe" suffix had acquired secondary meaning, invariably associated with the plaintiff.

The HC held that no case for grant of interim injunction against the defendant, therefore, exists and it dismissed the application of the plaintiff.

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