We’re pleased to bring to you a guest post by Devangini Rai, responding to an earlier guest post on the Delhi High Court’s recent interim injunction order in Phone Pe v. Bharat Pe trademark dispute. Devangini is a 5th Year, B.A. LL.B. student at University School of Law and Legal Studies, Guru Gobind Singh Indraprastha University, New Delhi. She has previously also written two guest posts for the blog titled ‘Fluid Trademarks: An Alter Ego for Brands?‘ and ‘Delhi HC Refuses Interim Injunction against Use of Acronym ‘TCV’ for a Typhoid Vaccine: Leaves Acquired Distinctiveness Question Unanswered?‘
Phone Pe v Bharat Pe: Whether Vernacular Wordplay Can Save from being Labelled Generic?
Recently, the Delhi High Court delivered an interim injunction order rejecting an injunction application filed by Phone Pe against Bharat Pe, which has been covered previously in a guest post by Abhinav Hansaraman on the blog here. While dealing with the case at hand, the Court explored the counterbalance between the ‘Anti-Dissection Rule’ and ‘Dominant feature rule’ covered succinctly by Abhinav’s post previously. It was held that both the trademarks in issue cannot be dissected as they are composite marks. It was further held that ‘Pe’ is a generic word for the English word ‘Pay’ and misspelling ‘pay’ as ‘pe’ cannot be said to change the legal position. I write this as a response to Abhinav’s post discussing a divergent interpretation of the law in this case.
History and Arguments
To recap the facts for our readers’ benefit: the defendant had initially sought to use the logo in its trademark application before the Trademarks Registry. This was however abandoned soon after a cease-and-desist notice was served upon the defendant by the plaintiff alleging similarities with their logo . Consequently, the plaintiff argued that the word ‘Pe’ is an essential, dominant part of the trademark for which the plaintiff has been a prior user since 2015. It was further argued that ‘Pe’ has no etymological connotation and when used in conjugation with the common word ‘Phone’ as it forms a dominant and essential part of the trademark. The usage of BharatPe also has ‘Pe’ as the dominant part as the word ‘Bharat’ is publici juris. The defendant argued that payment services under BharatPe had commenced in 2018. It was further argued that the marks cannot be dissected in light of Section 15 and Section 17 of the Trademarks Act, 1999 and that the dominant part of the marks is Phone/Bharat and not ‘Pe’.
It is known that courts cannot pass a ruling on acquired distinctiveness at the interim stage. Thus, the point of determination before the Court was : whether the tweaking of the word ‘Pay’ to ‘Pe’ is generic/descriptive enough to not dissect the plaintiff mark thereby dismissing a prima facie case against the plaintiff. I argue that there are reasons enough that ‘Pe’ can be dissected from the mark ‘PhonePe’.
Delving into the issue of Anti-Dissection vis a vis Dominant Part test, the cited numerous authorities: In one of the earliest decisions of the Supreme Court in Amritdhara Pharmacy v. Satya Deo Gupta, while comparing the marks Amritdhara and Lakshmandhara, the SC did not particularly dissect the marks. Instead, it upheld the anti-dissection rule. However, in this case, the SC was guided by the phonetic and structural similarity between the marks, going by average customer standards in the 1960s. It thus held that the mark Lakshmandhara was infringing of the trademark rights in Amritdhara. Similarly, in JR Kapoor v. Micronix India the SC ruled on the basis of anti-dissection while comparing the marks ‘Microtel’ and ‘Micronix’. It held that no party can claim trademark rights over the word ‘Micro’ which is descriptive to the goods in trade the mark represents. Notably, the Delhi High Court in Stiefel Laboratories v. Ajanta Pharma Ltd., relied on McCarthy’s exposition of the anti-dissection rule and noted that:
“However, it is not a violation of the anti-dissection rule to view the component parts of conflicting composite marks as a preliminary step on the way to an ultimate determination of probable customer reaction to the conflicting composites as a whole.”
Acknowledging this principle, the Judge in the present case noted that at times there are similarities and differences between competing marks wherein the Court has to weigh them against each other and ascertain which predominates the other. Despite this, the Judge proceeds to note that the situation does not arise in the present case, as the competing marks are of one word each, namely ‘Phonepe’ and ‘BharatPe’. This observation thus sets the tone for an adverse prima facie finding against the plaintiff.
A pertinent part of the merits on the basis of which the Court proceeded to examine the case prima facie was the misspelling of ‘Pe’. It observed that no mere misspelling of a descriptive word can tilt the law in its favour to make it non-descriptive. To support this proposition, the Court cited the Delhi High Court case of Marico v. Agrotech which compared the marks ‘LOSORB’ and ‘LOW ABSORB’ (being the plaintiff and defendant marks respectively). The trademarks in question in Marico represented oil products being absorbed less by the food product. The plaintiff had a secured registration in LO-SORB/LOSORB whereas the defendant used the words WITH LOW ABSORB TECHNOLOGY written on its packaging. The Court in Marico propounded that success of getting a minor modification of a descriptive word registered as a trademark cannot prevent the use of its purely descriptive version from being used as a trademark. It was thus held that the Plaintiff cannot be allowed to claim exclusivity over a descriptive term like ‘LOSORB’ as it is a tweaked term of a generic word ‘LOW ABSORB’. This observation was relied on by the Judge in the present case to hold that exclusivity over a descriptive word cannot be claimed by tweaking its spelling.
There are two counter-arguments in my opinion as to why the ruling in Marico cannot be followed here.
1. ‘Pe’ should not be classified as descriptive/generic: As mentioned before, ‘Pe’ is a Hindi word, used in a preposition sense for ‘on’. The Court seems to have gone more in the favour of the argument that ‘Pe’ is the Hindi word for “on”, translating to ‘on Phone’ making a case for a generic descriptive use of the Hindi meaning of the word. However, in my opinion, the word appears to be stylized and non-generic which makes for a good wordplay for describing the services offered by a mobile digital payment application as devised by the plaintiff. The word ‘Pe’ also coincidentally rhymes with the pronunciation of the English word ‘pay’. This coincidence should not be read as usage of the English word Pay. Had the plaintiff trademark been ‘PhonePay’, it would have been a very generic and descriptive mark to begin with and the mark would have been refused to be registered by all means. ‘Pe’ should not be merely read as the tweaked version of ‘Pay’. While I understand this is a high bar which might not have appeased the Court, the other two reasons cited below make a stronger case for the plaintiff.
2. Dissecting PhonePe: When ‘Pe’ is used together with a generic word ‘Phone’, a trademark which suggests that something is being done via a phone. The word ‘Pe’ here plays a dual role in suggesting that the trademark is a mobile digital payment application. Since ‘Phone’ is clearly a descriptive word, it is the word ‘Pe’ which grants certain creativity and arbitrariness to the trademark. An important aspect of this argument is the fact that ‘Pe’ should be treated as dominant. This is visibly so in the logo adopted by the plaintiff. PhonePe is an Indian homegrown digital payments application best recognised by the vernacular letter spelt in Hindi in the logo across a purple backdrop. The malafide intention of the defendant can also be highlighted by the fact that it attempted to adopt a strikingly similar logo before abandoning it.
The Court noted some merit in dissecting ‘PhonePe’ on the basis of the capitalization of the letter ‘P’ in Pe. Abhinav in his post makes a case for disagreeing with this stance. In my opinion, this finding should also be accompanied by considering the logo adopted by the Plaintiff.
This observation has been largely ignored by the Court to adjudge dissection. The image illustrated above is a common sight of how the plaintiff is represented in a typical QR Code system.
Image from here
Thus, I believe that the Court followed the reasoning largely propounded by Marico in concluding that misspelt words tweaking a generic word cannot prohibit similar usage by rival proprietors in using the original generic word. While the ruling in Marico itself is sound, the defendants have adopted the arbitrary part ‘Pe’ of ‘PhonePe’ as it is. Had ‘BharatPe’ been ‘BharatPay’, no infringement claim would have sustained against them. (An example of a similar highly successful trade name is that of Google Pay). The Court also observes that the services that parties deal with are different. PhonePe offers a single QR Code whereas BharatPe primarily offers a uniform QR Code compatible across all payment applications including PhonePe. The Court is correct in highlighting the difference in the services offered. However, the difference is not much and can be inconsequential to less tech savvy or illiterate merchants- one of the target groups for both the parties as highlighted by Abhinav as well. Lastly, the Court also observes that there is some substance in asserting a dominant character of ‘Pe’ in the suffix of the trademark on the basis of capitalization as analysed above. While Abhinav in his post disagrees with this stance that the Court adopted, this statement becomes one of the few parts of the judgement that I agree with. It would be interesting to see this argument playing out in Court at the time of final adjudication of the matter.