The case of PhonePe Private Limited vs. BundlePe Innovations Pvt. Ltd. revolves around allegations of trademark infringement and passing off. PhonePe, a leading digital payments platform, accused BundlePe of using deceptively similar marks, namely “BundlePe” and “LatePe,” which allegedly infringed on the well-known trademark “PhonePe.”
PhonePe was incorporated in 2014 and is renowned for its digital payment services, with over 450 million users. It holds multiple trademark registrations, including the distinctive “Pe” element. In early 2023, PhonePe discovered that BundlePe was using similar brand names for competing services, leading to the current lawsuit.
PhonePe sought multiple legal remedies, including a declaration of “PhonePe” as a well-known trademark under Section 2(1) (zg) of the Trademarks Act, 1999. It also sought a permanent injunction against BundlePe and LatePe for trademark infringement, an injunction to prevent passing off and dilution of its trademark, and damages of Rs.10,00,000/- for infringement.
BundlePe Innovations Pvt. Ltd. contended that “Pe” is a generic term derived from the Hindi word “Pay”, commonly used in the payment industry. They argued that their marks “BundlePe” and “LatePe” had distinct prefixes, sufficiently differentiating them. The defendants also claimed that no consumer confusion or passing off was evident and that PhonePe’s attempt to monopolise common words was legally impermissible.
The court carefully evaluated the allegations and evidence presented by both parties. On the issue of similarity, it examined whether “BundlePe” and “LatePe” were deceptively similar to “PhonePe.” The court found that the suffix “Pe” was a common element in the digital payments industry, widely used by several companies. The distinctive prefixes “Bundle” and “Late” created a sufficient difference to distinguish the defendants’ marks from the plaintiffs.
Regarding trademark infringement, the court ruled that PhonePe failed to establish the distinctiveness of “Pe” as a unique identifier. Without substantial proof of consumer confusion, the claim of trademark infringement was not upheld. The court also noted that PhonePe’s reliance on the “Pe” suffix was insufficient to confer exclusive rights over a generic term.
In the matter of passing off, the court observed that the defendant’s services were not identical to PhonePe’s and catered to different user needs. The absence of concrete evidence of misrepresentation or consumer deception led to the dismissal of the passing-off claim. The court emphasised that the use of a common industry term could not be monopolised without strong proof of brand association.
The court also addressed the claim for damages of Rs.10,00,000/- sought by PhonePe. It found that the plaintiff failed to provide adequate evidence of financial loss or harm caused by the defendant’s actions. As the claim appeared speculative without tangible proof, the court denied the request for damages.
On the issue of domain name infringement, PhonePe argued that the domain names bundlepe.com and latepe.in were deceptively similar to phonepe.in. However, the court held that the domain names were sufficiently distinct due to the addition of unique prefixes, reducing the likelihood of consumer confusion.
Furthermore, the court declined to recognise “PhonePe” as a well-known mark under Section 11 of the Trade Marks Act. It observed that the widespread use of “Pe” in the digital payments sector diluted the distinctiveness of the plaintiff’s mark, making it unsuitable for well-known mark status.
The court dismissed PhonePe’s claims for trademark infringement, passing off, and damages. It held that the marks “BundlePe” and “LatePe” were sufficiently distinct and that “Pe” was a generic term in the digital payment industry. This judgment emphasises the importance of distinctiveness and substantial evidence in trademark litigation.