Trademark Infringement Suit: Interim Relief to ‘PhonePe’ was Denied

BACKGROUND :

The Single-Judge Bench of Manish Pitale, J., dismissed an application filed by PhonePe Private Limited (applicant) seeking interim relief on the grounds that the plaintiff failed to demonstrate a prima facie case that the defendant copied the plaintiff’s registered trademark’s central, essential, or fundamental features. The plaintiff registered the trademark ‘PhonePe’ and its variants with the Registrar of Trademarks in 2014. The plaintiff has a registration for the word mark ‘PhonePe’ and its derivatives, including “पे” written in Devanagari Hindi script, dating back to March 2016. The plaintiff offers financial services to its consumers using mobile phone applications such as Unified Payment Interface (UPI), QR Codes, or debit and credit cards.

In the current suit, it is claimed that ‘PhonePe’ is a distinctive and coined trademark of the plaintiff, and, when used as a colloquial term in Hindi, means ‘on,’ and that is what signifies its use in the plaintiff’s registered trademark, because the plaintiff’s services are ‘on’ the mobile phone through an app. In 2019, the plaintiff filed an action in the Delhi High Court, alleging that the defendant infringed on its trademark by utilising the word “pe” in the name “BharatPe.” The temporary relief plea was denied, which was later confirmed by the Division Bench of the Delhi High Court as a result of the abandonment of the appeal, and the litigation is still ongoing.

ISSUES RAISED :

1. Is the idea of ‘prosecution history estoppel’ relevant in this case?

While deciding this case, the Court stated that the plaintiff’s claim to the Registrar of Trademarks (“registrar”) was important. Plaintiff’s allegation before the registrar was that its mark “Phonepe” cannot be regarded to be comparable to marks such as “Phone Pe Deal,” “Phone Pe Store,” “Phone Pe Crore,” and so on. Furthermore, the Court stated that the plaintiff did not present this stand before the Court, which the registrar had observed that there were similar trademarks to ‘phone pe,’ and this was a relevant factor to the controversy in the present case, because the defendant’s trademark was ‘Postpe,’ which was similar to the marks pointed out by the registrar.

Thus, the Court determined that by failing to present its own position to the Court, the plaintiff forfeited its right to discretionary relief under Order XXXIX, Rules 1 and 2 of the Civil Procedure Code (“CPC”). Furthermore, the Court stated that the defendant was undoubtedly prejudiced, and that the theory of prosecution history estoppel was rightly applied in this case. As a result of such conduct, the Court ruled that the plaintiff could not effectively seek discretionary relief.

2. Whether the previous legal proceedings have any bearing on the current situation?

The Court stated that the parties’ previous two legal proceedings were relevant and that the effect of the same must be considered by the Court in order to determine whether the plaintiff has been shifting its position and to what extent it affects the grant or refusal of discretionary relief at an interlocutory stage. The Court ruled that by taking radically contradictory views in respect of its own registered trademark ‘Phonepe’ in distinct legal processes, the plaintiff had disentitled itself from the provision of temporary reliefs. The Court noted out that the plaintiff endeavored to assert before the Court that ‘pe’ connotes ‘payment’ but under its registered trademark, it refers to the colloquial Hindi term ‘on’. It has been clearly proved that the trademark ‘PostPe’ is a short form of ‘postponed payment’. Thus, the Court concluded that the plaintiff’s positions were mutually incompatible, and that such contradictory pleas barred the plaintiff from receiving discretionary relief under Order XXXIX, Rules 1 and 2 of the CPC.

CONTENTIONS RAISED :

Plaintiff :

Mr. Ravi Kadam, distinguished senior counsel for the plaintiff, claimed that the plaintiff claims infringement of its registered trademark ‘PhonePe’ in its entirety when compared to the defendant’s trademark ‘postpe’. He invoked the Supreme Court-approved Pianotist test as well as the law established by the Division Bench of this Court in Hiralal Parbhudas vs. Ganesh Trading Company and Ors. He further claimed that both parties provided financial services and that their target clients were the same. The Supreme Court argued that enormous goodwill was produced in favour of Gorbatschow Wodka KG vs. John Distilleries Limited, Ranbaxy Laboratories vs. Universal Twin Labs, and Satyam Infoway vs. Siffynet Solutions.

The Supreme Court’s decision in Ruston & Hornsby Ltd. vs. The Zamindara Engineering Co., was also cited. In the case of the plaintiff’s competitor mark ‘BharatPe,’ the Delhi High Court awarded interim relief to the defendant. The defendant’s defences are unsustainable, the charge of forum shopping is unfounded, the plaintiff has registration for its trademark and variants since March, 2016, and the plaintiff enjoys proprietary rights as a result of registration grant. The application deserved to be approved on this grounds.

Defendant :

Mr. Sharan Jagtiani, distinguished senior counsel for the defendant, contended that the current suit was not launched on a clean slate and that the plaintiff’s shifting positions can only be grasped after reviewing the past judicial processes. He also referred to the Delhi High Court’s decision and order, which rejected the plaintiff’s claim for interim relief. When applying for registration of the mark ‘PhonePe,’ the plaintiff also suppressed its own position before the Registrar of Trademarks. The plaintiff argued that their mark ‘PhonePe’ was recognisable even when compared to similar marks. However, a comparison of the two marks revealed no significant similarity or deceptive similarity.

DECISION :

The Court upheld the Delhi High Court’s findings in the earlier suit, noting that whether the plaintiff’s suffix ‘pe’ had acquired distinctiveness and secondary meaning to the extent that the consuming public now invariably associated the mark with only the plaintiff’s services is a matter for trial. When the remaining components of the marks, namely ‘phone’ and ‘post,’ were compared, the Court found no prima facie case brought out by the plaintiff about the similarity between the two. “The words ‘phone’ and ‘post’ have distinct dictionary meanings with no possibility of confusion between the two,” the Court stated.

The Court found “insufficient phonetic similarity between the two marks to support the plaintiff’s allegation that a strong prima facie case for interim relief was made out.” As a result, the Court ruled that the plaintiff’s case cannot be pursued further for interim relief because it failed to show prima facie evidence that the defendant had reproduced the plaintiff’s registered trademark’s important, essential, or fundamental qualities. As a result, the claim for interim relief was denied.

Aditya Pratap is a lawyer and founder of Aditya Pratap Law Offices. He practices in the realm of real estate, corporate, and criminal law. His website is Aditya Pratap.in and his media interviews can be accessed at http://www.youtube.com/@AdityaPratap/featured. Views expressed are personal.

This article has been assisted by Khushi Singh, a 3rd year law student pursuing B.A., LL.B. from NMIMS, Mumbai.