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PhonePe Pvt. Ltd. V. Ezy Services & Anr. (BhartPe)

  • sonalimukhia2002
  • 43 minutes ago
  • 6 min read

Author: Simran Bhardwaj, Bharati Vidyapeeth New Law College , Pune


INTRODUCTION

Along with rapid expansion of the digitalized world economy, India has also witnessed an extraordinary expansion in its digital payments over the past few decades, making brand names extremely valuable. With numerous fintech companies entering the market, establishing a unique brand identity has become increasingly important. As competition grows, intellectual property disputes particularly those relating to trademarks have also become more common.

One of the most significant trademark disputes in the Indian fintech industry is PhonePe Private Limited v. Ezy Services & Anr.( BharatPe). The issue arose due to the use of suffix “Pe” by BharatPe which PhonePe claims to be its distinctive trademark and that BharatPe has infringed its registered trademark rights and constituted passing off thereby also causing confusion to the consumers, whereas on the other hand, BharatPe contended that “Pe” is a common Hindi word meaning “on” or “pay” and therefore cannot be a monopolised by a single business.

The dispute was mainly fought before the Delhi High Court raising an important legal question whether a company can claim exclusive ownership rights of a common descriptive word simply because it was the first to use a clever spelling of that word in its brand name? The judgement is regarded as a landmark decision because it assured that trademark protection applies to the whole and not to descriptive or generic components unless they have acquired a strong secondary meaning.


BACKGROUND AND FACTS

PhonePe was founded in 2015 and quickly became one of India’s leading mobile payment applications. Its name is a mix of “Phone” and the Hindi word “Pe,” which means “on” or “at,” symbolizing payments made “on the phone.” A few years later, BharatPe entered the market with a similar naming style, using “Bharat” (meaning “India”) and the same “Pe.” Both companies offer similar services such as digital payments, merchant transactions, and QR-based transfers.

In 2019, PhonePe filed a lawsuit in the Delhi High Court seeking to restrain BharatPe from using the term “Pe” . It also argued that customers would associated “Pe” with the PhonePe, which would create confusion. However, BharatPe, argued that the word “Pe” is a common Hindi preposition that means “on.” According to BharatPe, no company could claim monopoly rights over such a generic or descriptive expression. It also pointed out that its logo, color scheme, and overall get-up were completely different from PhonePe’s, which made confusion unlikely.


LEGAL FRAMEWORK

As the dispute has gained significant importance it was governed by the Trade Marks Act, 1999 which regulated trademark protection in India.

Section 9 prohibits registration of descriptive or generic marks except for the ones that have acquired distinctiveness through extensive use. Here in the case also PhonePe claimed that the suffix “Pe” had become distinctive due to its widespread commercial use.

Section 17 and Anti Dissection Rule protects a registered trademark as a whole and not in parts, in this case PhonePe was registered as a whole and not in parts where it is seeking for injunction which cannot be granted due to non-registration of words in parts.

Section 28 and 29, relating to the exclusive rights of proprietor and trademark infringement, whereas

Section 27 preserves the common law remedy of passing off.

Applying these provisions in the case the Delhi High Court denied to grant interim injunction to PhonePe on the use of suffix “Pe”, therefore denying exclusive rights.


ISSUES AND STAKEHOLDERS

The central issue before the Delhi High Court was whether the use of suffix “Pe” by “BharatPe” infringed the “PhonePe’s” registered trademark and whether it amounted to passing off? Secondly, whether a company could claim monopoly rights over such a generic and descriptive expression. Whether the consumers were likely to be confused by the similarities between the two marks “Pe”?

The major stakeholders included PhonePe and BharatPe, whose commercial interest were directly affected and the consumers mind while seeing the two on the same platform and as an impression of the same connection would create confusion. Beyond the two companies the case mattered to the wider fintech industry, as many existing company had also adopted names ending in”Pe” or “Pay”.


APPLICATION AND ANALYSIS

In the case of PhonePe v. BharatPe there had been quite important points drawn from the contentions made by the parties as well as the judgement given by the court. PhonePe had argued that the suffix “Pe” had acquired certain distinctiveness as it is an invented word not to be found in the english dictionary with no obvious meaning and over the years through continuous use of advertisements across various sectors, including public activities such as VIVO IPL 2019, the plaintiff has earned certain goodwill and reputation and that BharatPe’s adoption of the same suffix was likely to create confusion and dilute its brand identity.

On the other hand BharatPe claimed that”Pe” is a common Hindi word for “pay” rather making it descriptive than distinctive. Also, according to Trade Marks Act, the trademark protection applies to the whole composite mark and not only to the suffix.

According to Section 17 and Anti- Dissection Rule, Rule protects a registered trademark as a whole and not in parts, in this case PhonePe was registered as a whole and not in parts where it is seeking for injunction which cannot be granted due to non-registration of words in parts. The Court also observed that both PhonePe and BharatPe differ in their names, logo and visual identity, therefore PhonePe’s claim of acquiring distinctiveness could not be established as it lack in acquring secondary meaning because the suffix “Pe” itself means “Pay”. Therefore, the court held there was no prima facie case of trademark infringement or passing off.


OUTCOME AND CONSEQUENCES

In this case, the plaintiff was denied granting interim injunction on the suffix “Pe” as it does not acquire any distinctiveness merely on the basis that is an invented word and not to be found in the english dictionary, also it fails to acquire any secondary meaning of the word “Pe” , thereby failing to possess any exclusive rights. Hence, BharatPe was permitted to continue using its trademark.

The decision had wider implications for trademark law in India. It reaffirmed that businesses cannot easily claim exclusive rights over descriptive or commonly used words unless they have acquired a strong secondary meaning. The case also encouraged fintech companies to adopt distinctive and original brand names rather than relying on generic expressions. Further, it highlighted the importance of balancing trademark protection with fair competition and consumer choice in rapidly growing digital markets.


CRITICAL EVALUATION

The dispute between PhonePe and BharatPe highlights the limits of trademark protection when the contested element is descriptive or widely used within a particular industry. Businesses generally cannot obtain exclusive rights over such terms unless they are able to demonstrate that the term has developed a distinct secondary meaning associated solely with their brand.

The judgment also underscores the importance of assessing trademarks holistically, rather than focusing on individual elements in isolation. For companies operating in competitive sectors like digital payments, the ruling serves as a reminder that effective brand protection largely depends on the overall distinctiveness of the mark, rather than reliance on commonly used or descriptive components.


LESSONS, DEVELOPMENT AND SCOPE FOR REFORM

The case offers several lessons that the companies and bussinesses should reinforce along with the development that should take place to avoid any misconception and failures. Firstly, the case strengthens the position of Section 17 as a whole trademark should be registered than in parts, “Fill enrollments for the entire mark and multiple stylized performances if the suffix forms an essential branding element”.

Secondly, the companies adopting brand names should make choice properly therefore avoiding any kind of descriptive or generic words and if so should possess a secondary meaning similar to that of brand Apple to avoid court interference and trademark infringement. Also, the Trade Marks Registry may consider issuing clear guidelines regarding the composite trademarks and descriptive elements to reduce further disputes.


CONCLUSION

The case PhonePe Private Limited v. Ezy services & Anr. is a landmark judgement regarding trademark infringement denying interim relief to the plaintiff over the use of suffix “Pe” by the defendant. The Delhi High Court applied Section 17 and Anti-Dissection Rule, in a manner consistent with established precedent. It reaffirmed that trademark protection applies as a whole and not to a descriptive or generic element within it. For the businesses, the case serves as an important lesson that companies adopting brand names should make choice properly therefore avoiding any kind of descriptive or generic words and if so should possess a secondary meaning to avoid court interference and trademark infringement. As India is no far to become a developed nation along being highly digitalized, this decision will remain a remarkable precedent for resolving trademark disputes in fintech sector.


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