PhonePe Pvt. Ltd. v. Ezy Services & Anr. (BharatPe)

CASE ANALYSIS

PhonePe Pvt. Ltd. v. Ezy Services & Anr. (BharatPe)

Author: Arushi Mishra, Invertis University

Court: Delhi High Court, Single-Judge Bench of Hon’ble Justice C. Hari Shankar

Date: 15 April 2021

Citation: IA No. 8084/2019 in CS(COMM) No. 292/2019, Delhi H.C.

Facts of the Case

A. Parties and Market Landscape

PhonePe – Operated by Peanut India Pvt. Ltd. (innovated 2015). PhonePe functions as a full- mound fintech player, offering UPI- grounded payments for both consumers and merchandisers. By 2020, it had surpassed 100 million downloads. The company registered the marks “PhonePe”( Latin and Devanagari) in March 2016 across Classes 9, 35, 36, 38, and 42.

BharatPe – A product of Ezy Services Pvt. Ltd. (launched August 2018), targeting merchandisers with interoperable UPI payments via a single QR law. By December 2020, its app boasted over 5 million downloads. The sphere bharatpe.com was registered November 2017.

B. Origins of the disagreement

* August 2018 PhonePe issued a check- and- desist for use of “पे” in Devanagari. BharatPe complied, but continued using “Pe” in Latin script.

* March 2019 PhonePe filed violation and end- off suit, seeking an interim instruction under Order XXXIX CPC to restrain BharatPe’s operation of “Pe”.

C. Plaintiff’s Core Allegations

* “Pe” was argued to be a chased and distinctive suffix, central to PhonePe’s identity.

* Plaintiff asserted high consumer recognition via marketing, IPL 2019 backing, and wide downloads, making “Pe” a strong source identifier.

* Argued that average consumers would assume any “Pe” suffix in mobile payments substantiated PhonePe — extending to BharatPe.

D. Defendant’s Counter

* BharatPe claimed “ Pe ” is a general misspelling of “ Pay ”, descriptive of payment services.

* Asserted compound trademark comparison; banned from anatomizing suffix under Section 17.

* Argued previous use (from August 2016) and unique name creation “BharatPe” with no intention to mimic.

* stressed the plurality of “Pe” suffix brands (Google Pay, WhatsApp Pay, etc.) reflecting general operation.

* Emphasized inconsistent action positions regarding the meaning of “Pe” in different cases.

Issues Before the Court

1. Are “PhonePe” and “BharatPe” deceptively analogous to leave an interim instruction?

2. Can “Pe,” as a descriptive/ misspelt suffix without separate enrolment, be simply possessed?

3.Was there a prima facie case of trademark violation or end- off?

4. Did PhonePe establish a secondary meaning and exclusivity for “Pe”?

Legal Framework Applied

1.Composite Marks — Anti ‑ Analysis (Section 17) Under Section 17 of the Trade Marks Act, exclusive rights pertain to the trademark as a whole. Courts may examine constituent corridors only as a primary step but cannot anatomize to award exclusivity. The Supreme Court in Durga Dutt Sharma emphasized that ordinary consumers perceive whole marks, not fractions.

2.Dominant Part Doctrine

In South India potables v. General Mills, the Delhi High Court explained that while marks must be viewed holistically, a prominent element may be significant in assessing violation — however still within the compound environment.

3.Descriptive/ Generic Marks & Secondary Meaning

Section 9 bars enrollment of descriptive words unless secondary meaning is proven. Misspellings (e.g. “Pe” for “Pay”) remain general in absence of established association.

4.Consumer Confusion — Average User Standard

The applicable test involves the average consumer with amiss recollection, not specialists. Presence of some sophisticated drugs does not negate likely confusion among others — as noted in Amritdhara Pharmacy.

Court’s Detailed Analysis

1. Anti ‑ Dissection Upheld

The court emphasized marks must be compared as a whole. Both “PhonePe” and “BharatPe” qualify as compound marks. PhonePe could n’t assert exclusive rights to the suffix “Pe,” which is not singly registered.

2. “Pe” as Descriptive & general

The court conceded that “Pe” is phonetically identical to “Pay” and describes payment services. Misspelling cannot convert a descriptive word into a distinctive trademark.

3. Secondary Meaning Absent

Although PhonePe had five times of operation and visibility, the court held that duration was inadequate to show secondary meaning, especially since BharatPe had also established presence by 2020.

4. Dominance of Prefixes, Not Suffix

The court accepted “Pe” might be visually dominant, but held that elevation alone does not overcome the anti-dissection rule. The suffix earns protection only with distinctness and exclusivity which PhonePe failed to prove.

5. Phonetic and Service Differences

“Phone” vs “ Bharat ” are phonetically, visually, and conceptually distinct. Further, PhonePe is consumer- facing while BharatPe targets merchandisers (QR aggregator), limiting imbrication and liability of confusion.

6. No Prima Facie Case set up

Given the general nature of “Pe,” lack of secondary meaning, and service isolation, the court set up no base for interim relief.

7. Procedural Inconsistencies

Court noted PhonePe’s shifting delineations (“ Pe ” as Hindi preposition in one case, misspelt “ Pay ” in another) weakened its claim — emphasizing thicknesses crucial for interim orders.

Court’s Final Order

* Interim instruction denied; suit directed for trial on graces.

* BharatPe ordered to file six-yearly audited accounts for profit from use of “BharatPe”.

* May 2024 agreement Parties amicably resolved issues, withdrew pending resistances in Delhi and Bombay High Courts, including those concerning “PostPe,” bringing check to action.

Critical Analysis

A. Affirming Trademark Doctrines

The judgment reinforces anti-dissection, upholds dominance doctrine with caveats, and clarifies descriptive rudiments remain unprotectable absent secondary meaning.

B. Stylistic Emphasis ≠ distinctness

The court correctly editorialized that capitalization (“ Pe ”) or design cannot alone produce distinctness — style cannot substitute legal novelty.

C. Enforcement Burden on Complainants

PhonePe’s weak substantiation on consumer rise highlights need for empirical support (checks, advertisements, brand recall criteria) in trademark action — especially for general factors.

D. Real- World Fintech Impact

This precedent empowers new request entrants to borrow “Pe” or “Pay” suffixes openly, promoting competition without fear of unwarranted action.

E. Thickness is pivotal

PhonePe’s antithetical claims across cases damage edits credibility. Innovative branding strategies should be matched with harmonious legal narratives.

F. Relative operation to posterior Cases

In 2023, Madras HC applied PhonePe v. BharatPe to BundlePe and LatePe, dismissing violation claims while reaffirming the non-exclusivity of “Pe” — further strengthening the general suffix principle.

Broader Takeaways

1. Trademark Filling Strategy

* Fill enrolments for the entire mark and multiple stylized performances if the suffix forms an essential branding element.

2. Structure Secondary Meaning

* Prepare concrete substantiation brand mindfulness checks, unique totem marks, media shadowing, goodwill under suffix.

3. Holistic Branding

* Calculate on combined mark (word device) rather than insulated general terms to insure protectability.

4. Action Preparedness

* Maintain harmonious factual assertions across suits; inconsistent positions may ail interim relief sweats.

5. Policy Counteraccusations

* Fintech assiduity stays open; common suffixes remain accessible — encouraging introduction competition and consumer choice.

Conclusion

The PhonePe v. BharatPe case stands as a vital precedent in Indian trademark law, especially in the sphere of fintech and descriptive suffixes. The judgment reinforces that compound marks must be estimated holistically — rights cannot be claimed over unrecorded or general factors in insulation. It clarifies that descriptive suffixes like “Pe,” indeed when stylized or misspelt, do not admit protection unless secondary meaning is conclusively demonstrated through long- term operation and consumer association.

The Delhi High Court emphasized that interim relief, particularly in trademark controversies, hinges on a strong prima facie case backed by harmonious legal arguments and palpable consumer confusion. The Court’s station further implies that brand strategy must be supported by solid legal foundations — bare fashion ability or request dominance cannot substitute legal distinctness. Eventually, this case offers precious patience for both legal professionals and brand strategists to produce distinct, whole- brand individualities rather than counting on general terms or common assiduity suffixes. It promotes healthy request competition while conserving the integrity of intellectual property protection in India’s fleetly evolving digital frugality