The Madras High Court dismissed PhonePe’s trademark case against BundlePe, ruling that “Pe” is not a unique or exclusive element. The court stated that “Pe” is a commonly used term in the payment industry and its use by BundlePe does not amount to trademark infringement. The judgment emphasized that Rule 28 of the Trademark Rules allows Hindi-English transliteration, making “Pe” a legitimate representation of “Pay.” This ruling is a big blow to PhonePe’s exclusivity claims and a win for open competition in digital payments.
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CHENNAI: The Madras High Court dismissed a legal case filed by PhonePe Private Limited against BundlePe Innovations Pvt. Ltd. regarding a trademark dispute.
The court ruled that the word ‘Pe’ is not a unique or special element and, therefore, its use by another company does not amount to trademark infringement.
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Justice P. Velmurugan, who was hearing the case, noted,
“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 court explained that the word ‘Pay’ is a commonly used term in the financial and payment industry and is often used to describe the primary function of payment services. Because ‘Pe’ comes from the Hindi word for ‘Pay’, it does not violate any registered trademark.
PhonePe, the company that filed the lawsuit, argued that it owns the “PhonePe” trademark. The company combined the words ‘Phone’ and ‘Pe’, where ‘Pe’ comes from the Hindi word meaning ‘on’. PhonePe said it has been using this name since September 2015 and has officially registered its brand under multiple categories of the Trade Marks Act, 1999.
These categories include telecommunications, financial services, and e-commerce (Classes 9, 35, 36, 38, and 42). Additionally, the company has also registered other similar names like “FonePe” and “PhonePay.”
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However, in early 2023, PhonePe discovered that another company, BundlePe Innovations Pvt. Ltd., was using names like “BundlePe” and “LatePe” for its financial services. PhonePe alleged that this was an attempt to mislead consumers and create a false connection with the “PhonePe” brand.
The plaintiff claimed that the pronunciation of “BundlePe” and “LatePe” was too similar to “PhonePe”, which could confuse customers into thinking that the services offered by the defendant were related to or endorsed by PhonePe.
In response to these arguments, the High Court carefully examined the case and observed,
“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 further explained that the names “BundlePe” and “LatePe” do not weaken the uniqueness of the “PhonePe” brand because they are not likely to confuse the public or make them believe that “BundlePe” or “LatePe” are part of PhonePe’s brand.
The ruling added,
“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.”
The court made it clear that ‘Pe’ is not an exclusive or unusual word in the payment services sector. Several companies such as “Google Pay,” “Paytm,” and “Apple Pay” also use similar words, which proves that “Pe” is commonly used and cannot be owned by one company alone.
The judgment further stated,
“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”).”
The court ultimately concluded that “Pe” is a commonly used word in the industry and that the defendants “BundlePe” and “LatePe” are using it in good faith for their payment services.
Since Rule 28 of the Trademark Rules allows for Hindi-English transliteration, the defendants’ use of the word ‘Pe’ does not violate PhonePe’s registered trademark.
Therefore, the Madras High Court dismissed the lawsuit filed by PhonePe against BundlePe.
CASE TITLE:
PhonePe Private Limited v. BundlePe Innovations Pvt. Ltd. & Ors.
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