Published on 19th April 2025
Authored By: Mansi Sanjay Mandawgad
ILS Law College, Pune
Introduction
The case of PhonePe Private Limited v. Ezy Services & Ors.[1] (Delhi High Court, 2021) also commonly known as PhonePe v. BharatPe, marks a significant decision in Indian Trademark Law. This case was presented before a single-judge bench of Mr Justice C. Hari Shankar. The clash majorly revolved around the infringement of the suffix “Pe” in the digital payments sectors. The present case serves as an important precedent for how courts assess the distinctiveness of trademarks and deceptive similarity, especially in the business sector, where most industries use generic terms or descriptive elements in their branding.
Factual matrix of the Case
In the present case, PhonePe, which is a big platform for digital payments in India, had filed a suit against BharatPe, which is a competing Fintech company, alleging trademark infringement and passing off. The main contention in the case was that the use of the suffix “Pe” in the defendant’s “BharatPe” was deceptively similar and identical to that of the plaintiff’s “PhonePe”. And that this could mislead the customers. It is important to note that, PhonePe provides digital payment services to everyone who installs the app whereas BharatPe provides services exclusively to merchants only. Furthermore, the court had dismissed the application for an interim injunction against the defendants while rightly saying that the parties are not supposed to claim exclusivity over generic/ descriptive words unless and until there is any evidence of secondary meaning derived through the continuous commercial use of the word.
Plaintiff’s (PhonePe) Contentions [2]
- Established Usage and Brand Recognition
PhonePe has utilized the “PhonePe” trademark and its variations since 2015, registering them across multiple classes from March 2016. The brand had garnered significant recognition, boasting over 100 million app downloads and a strong market presence.
- The uniqueness of “Pe”
The “Pe” suffix was an innovative and imaginative transliteration of “Pay” in Devanagari script (“पे”). As “Pe” is a fabricated term absent from English dictionaries, it had become distinctively associated with PhonePe’s offerings.
- Potential for Customer Misidentification
BharatPe’s use of the capitalized “Pe” suffix created a misleading resemblance to PhonePe. Consumers with imperfect recall might link “BharatPe” to “PhonePe” due to the shared prominent “Pe” ending. Both applications provided identical digital payment solutions on the same platforms (Google Play and Apple App Store).
- Unjust Advantage and Misrepresentation
BharatPe appropriated the distinctive “Pe” suffix to exploit PhonePe’s established reputation. The defendants introduced their services in 2018, well after PhonePe, demonstrating PhonePe’s prior usage. Proof of Renown PhonePe presented advertisements, endorsements (e.g., VIVO IPL 2019), collaborations, and media coverage as evidence of its reputation and widespread recognition.
Consequently, PhonePe asserted that BharatPe’s mark violated its trademark rights and constituted passing off under the Trade Marks Act, 1999.
Defendant’s (BharatPe) Contentions
- Non-distinctive nature of “Pe”
The term “Pe” is an alternative spelling of “Pay”, a common English word, and cannot be exclusively claimed by a single entity. PhonePe acknowledged that “Pe” was employed phonetically to signify “Pay”, rendering it descriptive and non-distinctive.
- Distinctiveness of “BharatPe” in its Entirety
BharatPe is an invented term combining “Bharat” (meaning India) and “Pe”. Trademarks must be evaluated holistically—the primary components of the competing marks are “Phone” and “Bharat”, not merely the suffix “Pe”.
- Previous Registrations of “Pe” Marks
Various third parties had registered marks incorporating “Pe” (e.g., “Phone Pe Deal”, “Phone Pe Store”), some predating PhonePe’s registrations. PhonePe had even obtained the “CardPe” mark in 2019 through assignment, recognizing others’ prior rights to “Pe” formative marks.
- Legitimate and Good Faith Adoption
BharatPe adopted its mark in August 2018, with its domain name registered in 2017. The company independently and genuinely created “BharatPe” to represent its QR-based UPI payment services.
- Absence of Consumer Confusion
The Trade Marks Registry did not object to BharatPe’s mark based on similarity to PhonePe. The visual, phonetic, and structural disparities between the marks made confusion improbable. Thus, BharatPe contended that “Pe” was descriptive, common in trade, and could not be monopolized, resulting in no infringement or passing off.
Law of Land
The Anti-Dissection Rule mandates that trademarks be evaluated in their entirety rather than broken down into separate components. [3]The Trade Marks Act, 1999, Section 17(1), provides exclusive rights to the complete registered mark, not individual elements. This concept is rooted in the understanding that consumers typically recall the overall impression of a trademark rather than its specific parts. In Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, the Supreme Court determined that infringement occurs when the defendant’s mark is either identical or deceptively similar to the plaintiff’s, taking into account phonetic, visual, and conceptual resemblances. Nevertheless, the Dominant Feature Test enables courts to identify and evaluate the most prominent aspect of a trademark in cases involving composite marks. The court in South India Beverages (P) Ltd. v. General Mills Mktg. Inc. ruled that while a trademark should be considered as a whole, certain elements may be more recognizable to consumers. Infringement may still be established if a defendant copies a distinctive and crucial part of the plaintiff’s mark. These two principles work in tandem—trademarks are analysed comprehensively, but dominant features may receive greater attention. In the PhonePe v. BharatPe case, the plaintiff claimed that “Pe” was the dominant feature of its mark, making “BharatPe” deceptively similar. The defendant, however, relied on the anti-dissection rule, arguing that trademarks should be compared in their entirety, emphasizing the clear distinctions between “PhonePe” and “BharatPe.”
Key observation of the court in the case
Main Findings of the Delhi High Court in PhonePe v. BharatPe the Delhi High Court dismissed PhonePe’s allegations of trademark infringement and passing off, primarily because both PhonePe and BharatPe were deemed composite trademarks that should be evaluated in their entirety. The Court implemented the anti-dissection principle, rejected PhonePe’s claim to the Pe suffix, and determined that there was no significant risk of consumer confusion.
- Composite Trademarks and the Anti-Dissection Principle
The Court stressed that PhonePe and BharatPe are composite marks, requiring evaluation as complete units rather than separate components (Phone and Pe, Bharat and Pe). According to Section 17 of the Trade Marks Act, 1999, a registered mark only provides exclusive rights to the entire mark, not its individual elements. As PhonePe lacked separate registration for Pe, it couldn’t assert exclusivity over the suffix.
- Lack of Exclusive Rights to the “Pe” Suffix
The Court determined that Pe is merely an alternative spelling of “Pay”, a descriptive term in the digital payments sector. Descriptive terms generally can’t be monopolized unless they gain distinctiveness through extensive use. Since Pay is commonly used to describe payment services, simply changing the spelling to Pe doesn’t make it inherently distinctive. The Court reasoned that PhonePe wouldn’t have been granted exclusivity over “Pay”, so its claim to Pe was equally weak. As BharatPe also used Pe descriptively, it wasn’t infringing on PhonePe’s rights.
- Absence of Deceptive Similarity Between the Marks
For a trademark infringement claim to succeed, the plaintiff must demonstrate that the defendant’s mark is deceptively similar and likely to confuse consumers. The Court ruled that: The dominant elements of the two marks— “Phone” and “Bharat” —are visually and phonetically distinct. The only common element is “Pe”, which is descriptive and widely used in the industry. Consumers are unlikely to confuse the two marks solely due to the Pe suffix. Citing Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, the Court reiterated that infringement requires the defendant’s mark to closely resemble the plaintiff’s essential features. Given the distinctiveness of Phone and Bharat, there was no deceptive similarity.
- Distinct Nature of Services
The Court noted that while both companies operate in digital payments, their services differ: PhonePe offers a digital payment portal for consumers. BharatPe provides a QR code for merchants that supports multiple UPI apps, including PhonePe. Given their different functions, consumer confusion is improbable. The Court also observed that consumers in the digital payments sector are reasonably aware of app differences.
- Lack of Secondary Meaning Acquired by “Pe”
The Court held that PhonePe had not demonstrated that “Pe” had acquired secondary meaning, indicating that the public did not exclusively associate it with PhonePe. Since PhonePe had only been operational since 2016, this was deemed insufficient time to establish distinctiveness. Citing South India Beverages v. General Mills, the Court emphasized that courts should exercise caution before declaring a descriptive mark as distinctive, which typically requires decades of exclusive use.
Final Ruling: No Infringement or Passing Off
Since PhonePe failed to prove exclusivity over Pe, deceptive similarity, or secondary meaning, the Court dismissed the claim.
Conclusion
The PhonePe v. BharatPe verdict offers a thorough examination of crucial Indian trademark law principles, establishing a significant precedent for future litigation. The Court’s meticulous analysis of concepts such as the anti-dissection rule, deceptive similarity, secondary meaning, and exclusivity over descriptive marks resulted in a well-balanced and reasoned decision. By dismissing PhonePe’s claim to the Pe suffix and stressing the importance of evaluating composite marks holistically, the ruling underscores the necessity of considering trademarks within their commercial and contextual framework.
Furthermore, this judgment serves as a vital resource for legal professionals, providing a systematic approach to understanding how courts evaluate trademark infringement and passing off claims. It emphasizes the importance of demonstrating distinctiveness and consumer confusion rather than simply relying on similarities in generic elements. The Court’s use of established case law, including Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories and South India Beverages v. General Mills, bolsters its reasoning and establishes a guiding framework for future disputes.
In essence, this ruling not only settles the immediate dispute but also functions as a valuable guide on trademark law, assisting both practitioners and academics in navigating complex intellectual property matters.
References
[1] Phonepe Private Limited v. EZY Services, 2021 SCC OnLine Del 2635
[2] Yashvardhan Rana, Explained: PhonePe v. BharatPe Trade Mark Dispute, SCC Online, ( Feb.23, 2025, 5.02 pm)
https://www.scconline.com/blog/post/2021/05/19/explained-phonepe-v-bharatpe-trade-mark-dispute-pe-pay-as-you-go/#_ftn3
[3] The Trade Marks Act, 1999, Section 17(1), Acts of Parliament, 1999 (India)
