BharatPe prima facie does not infringe PhonePe trademark: Delhi High Court declines interim relief

The Delhi High Court has refused to pass an interim injunction order against "BharatPe" while holding that its mark was not in violation of the trademark held by “PhonePe” (PhonePe v. Ezy Services & Ors)..The judgment was passed by a Single Judge Bench of Justice C Hari Shankar, who nonetheless directed "BharatPe" to maintain accounts of the amounts earned as a result of the use of the mark and to file half-yearly audited statements. .Th judgement passed earlier this month stated that parties cannot misspell descriptive/generic words to claim exclusivity unless there is evidence of such misspelling achieving secondary meaning..In its suit before the High Court, PhonePe (plaintiff) submitted that “Pe” was an "invented word" and was an essential, dominant and distinguishing feature of its registered trademarks in the name of "PhonePe". .It was argued that usage of “BharatPe” by Resilient Innovations (defendant), which offered "identical services", infringed its registered trademark and also amounted to passing off. .The plaintiff asserted that 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 defendant, on the other hand, contended that the plaintiff was not the registered proprietor or permitted user of the words, “Pe”, “Pay” or the Devnagari “पे”..The registration by the plaintiff was over the entire word “PhonePe” and the same cannot be dissected, it was argued. .The defendant also claimed that the two marks i.e. PhonePe and BharatPe were visually, phonetically and structurally different when viewed as a whole.The defendants claimed that the BhartPe mark was being used since 2016, adding that the idea behind the mark was to build a single QR code for merchants to facilitate making of payments across all consumer UPI-based applications, and hence the tagline, “Bharat Pe Sab Chalta Hai”..Further, it was argued that the suffix “Pe” was merely a misspelling of the word “Pay” and no exclusive rights could be enforced in respect of such a word, unless it has acquired a secondary meaning with respect to the plaintiff’s business..After analysing the provisions of the Trademarks Act and a plethora of judgments on the issue of trademark infringement, the Court culled out the legal position as follows:- Exclusivity can be claimed, and infringement/passing off alleged, only in respect of the entire mark, not in respect of a part thereof. - It is open, however, to assert infringement of a part when the part so copied is the dominant part or the essential feature;- No exclusivity can be claimed over a descriptive mark or a descriptive part of the mark even by misspelling it unless it has acquired a secondary meaning;- Whether a mark has acquired secondary meaning requires evidence of members of the public testifying to that effect;- Where the defendant also makes out a case of extensive use of its mark, it militates against any acquiring of secondary meaning by the mark of the plaintiff..Applying the above principles to the facts at hand, the Court opined that no case for any interim relief to PhonePe had been made out..The Court stated that “PhonePe” and “BharatPe” were both 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..It prima facie opined that there may be substance in the plaintiff's claim that the “Pe” suffix, which admittedly connotes the expression and meaning “pay", constituted the dominant part or the essential feature of the “PhonePe". .However, at present, the evidence to come to a definitive conclusion that the “Pe” suffix would in the public consciousness be associated with the plaintiff’s services was insufficient, the Court held."Were the plaintiff to establish that the “Pe” suffix had acquired distinctiveness, and a secondary meaning, to the extent that the consuming public would invariably associate the “Pe” suffix as relating only to services provided by the plaintiff, it may, nevertheless, have been able to make out a case of infringement. This, however, is essentially a matter of trial...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," judgment states..The Court further opined that barring the common “Pe” suffix, the two marks were not confusing or deceptively similar..Accordingly, the Court dismissed the application for interim injunction against the defendant, opining that no case for the same was made out. .PhonePe was represented by Senior Advocate Jayant Mehta, along with Advocates Shilpa Gupta, Vaarish K Sawlani, Ranjeet Singh Sidhu and Smiti of Saikrishna & Associates..BharatPe was represented by Senior Advocate Gaurav Pachnanda with Advocates Mohit Goel, Sidhant Goel, Aditya Goel, Karmanya Dev Sharma and Namrata Sinha of Sim & San Attorneys At Law..[Read Order]