The Madras High Court dismissed a Civil Suit filed by PhonePe Private Limited against BundlePe Innovations Pvt. Ltd. in a trademark infringement case.

The Court said that ‘Pe’ is not a unique or distinctive element and hence, its use does not amount to any infringement.

A Single Bench of Justice P. Velmurugan observed, “The plaintiff cannot claim exclusive rights over the use of "Pe" because it is a commonly used word in the payment services industry. The defendants are not attempting to infringe the plaintiff’s mark by using "Pe" in a manner that could be seen as exploiting the plaintiff’s goodwill. Instead, the defendants are using "Pe" in a descriptive and non-exclusive manner. Rule 28 of the Trademark Rules, which allows transliteration between Hindi and English, supports the defendants’ usage of "Pe" as a legitimate transliteration of the Hindi word "Pay." Since "Pe" is not a unique or distinctive element of the Plaintiff’s mark, its use by the defendants does not amount to infringement.”

The Bench explained that the term ‘Pay’ is a generic term widely used in the payment services industry to describe the core function of such services, and therefore, the mere use of ‘Pe’ which is derived from the common Hindi word for ‘Pay’, does not constitute an infringement of the registered trademark.

Advocates P. Giridharan and H. Siddharth represented the Plaintiff while Advocate R. Sathish Kumar represented the Defendants.


Brief Facts

PhonePe (Plaintiff) claimed ownership of the "PhonePe" trademark, coined by combining ‘Phone’ with ‘Pe’, where ‘Pe’ is derived from the Hindi word meaning ‘on’. The Plaintiff asserted that this mark has been in use since September 2015, and it has registered the mark under several classes of the Trade Marks Act, 1999, including Classes 9, 35, 36, 38, and 42, covering telecommunications, financial services, and e-commerce. In addition to the "PhonePe" mark, the Plaintiff has also registered several phonetic variations, including "FonePe" and "PhonePay."

In early 2023, the Plaintiff discovered that the Defendant- BundlePe, was using similar brand names, "BundlePe" and "LatePe," to offer competing payment services. The Plaintiff alleged that the Defendant was using these names to deceive consumers and create a false association with the "PhonePe" brand. It was further asserted that the phonetic similarity of "BundlePe" and "LatePe" to "PhonePe" is likely to confuse customers, leading them to believe that the Defendants' services are associated with or endorsed by the Plaintiff.

Reasoning

The High Court in view of the above submissions, noted, “The Court finds that while the marks share the element “Pe,” the overall impression created by the marks "BundlePe" and "LatePe" is sufficiently distinct. The defendants’ marks are not identical to "PhonePe" and serve different business purposes (e.g., bill payments, pay-later services). Given that the marks are used in different contexts and that "Pe" is a commonly used suffix in the payments industry, the Court does not find sufficient evidence that the defendant’s marks will dilute the distinctiveness of "PhonePe."

The Court added that the use of "BundlePe" and "LatePe" does not dilute the distinctive character of the Plaintiff's mark "PhonePe," as the marks are not likely to cause confusion or weaken the public's association of "PhonePe" with the Plaintiff.

“Rule 28 of the Trade Marks Rules, 2002, allows the transliteration of words between Hindi and English, facilitating the representation of words in both scripts. In this case, "Pe" is a transliteration of the Hindi word "Pay," which translates to "Pay" in English”, it further noted.

The Court was of the view that "Pe" is not an inherently distinctive or arbitrary element and the same is commonly used in the payment services industry, with many other companies such as "Google Pay," "Paytm," and "Apple Pay" using similar terms.

“Given its descriptive nature, "Pe" cannot be claimed exclusively by the plaintiff. The defendants’ usage of "Pe" in "BundlePe" and "LatePe" should be seen as part of the general vocabulary used in the payment sector, and as such, it cannot be protected as a distinctive trademark element. The use of "Pe" by the defendants is unlikely to cause consumer confusion. The defendants’ marks, "BundlePe" and "LatePe," are visually and conceptually distinct from "PhonePe," especially because of the different prefixes ("Bundle" and "Late")”, it also remarked.

The Court, therefore, concluded that the Defendants are using ‘Pe’ in good faith, as part of their branding for services that are functionally similar to other payment services in the market and hence, the usage of the word ‘Pe’ by the Defendants does not infringe the Plaintiff's registered mark, considering Rule 28 of the Trademark Rules, which permits transliteration between Hindi and English.

Accordingly, the High Court dismissed the Suit.

Cause Title- PhonePe Private Limited v. BundlePe Innovations Pvt. Ltd. & Ors.

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