Madras High Court
Phonepe Private Limited vs 3 Vysyaraju Sreenivasrao on 22 August, 2023
O.S.A.(CAD) Nos.70 to 73 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 22.08.2023
CORAM :
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
O.S.A. (CAD) Nos.70 to 73 of 2023
PHONEPE PRIVATE LIMITED
having its registered office at Unit No.001
Ground Floor, Boston House, Suren Road
Off Andheri-Kurla, Andheri (East)
Mumbai - 400 093
also having its branch office at
#51/117, Nelson Tower, Nelson Manickam Road
Aminjikarai, Chennai – 600 029
rep. by its Authorised Signatory, Rahul Kumar .. Appellant
in all appeals
Vs
1 DIGIPE FINTECH PRIVATE LIMITED
C-25, First Floor, Sector 8, Noida
Gautam Buddha Nagar
Uttar Pradesh - 201301
rep by its Directors.
2 Sankar Rao Vysyaraju
Director at Digipe Fintech Private Limited
C-25, First Floor, Sector 8, Noida
Gautam Buddha Nagar
Uttar Pradesh – 201301.
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3 Vysyaraju Sreenivasrao
Digipe Fintech Private Limited
C-25, First Floor, Sector 8, Noida
Gautam Buddha Nagar
Uttar Pradesh – 201301. .. Respondents
in all appeals
Prayer: Appeals under Order XXXVI Rule 9 of the Original Side Rules
read with Clause 15 of the amended Letters Patent and read with
Section 13 of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts (Amendment) Act to set
aside the fair and decreetal order passed by the learned Judge in OA
Nos.809 to 812 of 2022 in CS (Comm. Div) No.248 of 2022, dated
7.6.2023 and allow the present appeals.
For the Appellant : Mr.Sathish Parasaran
Senior Counsel
for M/s.P.Giridharan,
H.Siddharth and
Siddharth Govind
For the Respondents : Mr.R.Sathish Kumar
COMMON JUDGMENT
(Delivered by the Hon'ble Chief Justice)
The unsuccessful applicant/plaintiff is the appellant herein.
These appeals are filed challenging the common order dated
7.6.2023 passed by the learned Single Judge in O.A.Nos.809 to 812
of 2022.
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2. For the sake of convenience, the parties are referred to as
per the original designations in the suit.
3. The plaintiff herein had filed C.S. (Comm. Div.) No.248 of
2022. Pending suit, the plaintiff filed O.A.Nos.809 to 812 of 2022
seeking interim injunction to restrain the defendants from infringing
the registered trademark of the plaintiff “PhonePe” by using the
“DigiPe” mark and passing off the trademark “PhonePe” by use of
their mark “DigiPe”. The plaintiff also sought an injunction to
restrain the defendants from using the domain name DigiPe.com,
etc. The plaintiff also sought an order of injunction restraining the
defendants from passing off the trade dress/copying the contents of
the plaintiff's domain name.
4. The learned Single Judge dismissed the Original
Applications on the ground that plaintiff failed to make out a prima
facie case for grant of interim injunction. It was held that the
plaintiff failed to disclose material facts concerning dismissal of the
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similar interim applications filed against third parties before the
other High Courts which, if disclosed, will have a bearing on the
outcome of the said applications.
5.1. Mr.Satish Parasaran, learned Senior Counsel for the
plaintiff, vehemently contends that the plaintiff coined the
distinctive “PhonePe” mark in the month of September, 2015 in
relation to its service/platform. The said “PhonePe” trademark is a
combination of two words “Phone” and “Pe”. The word “Pe” does
not exist in English language and the term “Pe” in the plaintiff's
PhonePe trademark was adopted as a unique source identifier. The
unique spelling in English and capitalization of the “Pe” feature
confers inherent distinctiveness and the same is automatically
entitled to protection as an essential feature of the “PhonePe”
Trademark. The plaintiff has also obtained trademark registrations
of various PhonePe trademarks, as a family of marks, which
includes marks that are phonetically similar to “PhonePe” such as
“FonePay”, “Fonepe”, “Foneis”, as well as phonetically dissimilar
marks such as “CardPe” and “StorePe”, which bear the formative
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“Pe” element. Due to to wide usage and popularity of the plaintiff's
trademarks, it is claimed that the annual turnover of the plaintiff is
in excess of Rs.68,980 lakh.
5.2. It is further submitted that the plaintiff launched its
“PhonePe” App on 29.8.2016 and the said application is an instant
payment solution that facilitates payments via mobile payment
applications. The application of the plaintiff acts as a container for
various payment instruments, including but not limited to wallet,
debit/credit card, Unified Payment Interface (UPI) and external
wallets. The plaintiff provides its services to businesses/ merchants
by enabling them to accept payments and services from its
customers for the products or services on their platform. The
application can also be used to pay bills, recharge, send money, et
al. The plaintiff was a pioneer in the digital payment industry in
India and is one of the leading and most popular digital payments
and financial services companies with more than 400 million
registered users. As of September, 2022, the plaintiff has more
than 37 crore users and almost 1/3rd of the population of India is on
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the PhonePe App as registered users. The recognition received by
the plaintiff and its services also evidences the tremendous goodwill
and reputation across India.
5.3. Learned Senior Counsel further submitted that the
plaintiff issued a cease and desist notice dated 5.8.2022. The
respondent, vide letter dated 20.8.2022, having admitted that they
are aware that the mark of the plaintiff is well-known and would
amicably settle the issue, dishonestly proceeded to file a trademark
application for registration of the offending mark “DigiPe” on
26.9.2022. Inasmuch as the defendants have admitted that the
plaintiff's mark is a well-known trademark, they are estopped from
raising objections with regard to the popularity of the plaintiff's
“PhonePe” trademark.
5.4. It is also submitted by learned Senior Counsel that the
distinctive elements of the “PhonePe” mark consist of the word
Phone and Pay, which is uniquely spelled as “Pe” and merged as
“PhonePe” indicating the nature of business of the plaintiff. The
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word “Pe” is a distinctive adoption and is attached to Phone to
signify the business being done, i.e., financial and payment related
services “on” mobile. He added that even on a cursory glance of the
mark of the defendants “DigiPe”, it can lead to confusion in the
minds of the public at large as well as any person of average
intelligence implying that “DigiPe” is a part of a bouquet of services
operated by “PhonePe”. The intention of the defendants is to get
benefit from the significant goodwill and reputation that the plaintiff
has amassed for the PhonePe trademarks.
5.5. Learned Senior Counsel asserts that though the
defendants have contended that the “DigiPe” application is not
useful for any individual customers and the same is confined to
merchant establishments and that their target customers are
entirely different to the customers of the plaintiff and therefore
there is no question of confusion, the defendants on their website
have categorically stated that DigiPe App caters to the needs of
both merchants and customers.
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5.6. Referring to Rule 28 of the Trademark Rules, 2017, it is
submitted that the dominant “Pe” mark, though registered in
Devanagari as “is” and is pronounced in English as Pe, has to be
given equal level of protection as it is in the natural language of
statement and no transliteration is required to convey the meaning.
If the validity of the registration of the trademark is not brought in
issue, the statutory assumption that the marks are valid must be
accepted as per Section 32 of the Trademarks Act, 1999. The
defendants have themselves sought to register Digipe under the
same classes in which the plaintiff is operating and, hence, the
defendants cannot question the validity of the mark of the plaintiff.
5.7. To fortify the submission that once the validity of the
registration of the trademark is not brought in issue, the statutory
assumption that the marks are valid must be accepted, reliance is
placed on a judgment of a Division Bench of the Delhi High Court in
the case of PEPS Industries Private Limited v. Kurlon Limited, 2022
SCC OnLine Del 3275, wherein the view taken in the judgment of a
learned Single Judge of the Delhi High Court in the case of PhonePe
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Private Limited v. Ezy Services, 2021 SCC OnLine Del 2635, relied
upon by the defendants, was not accepted.
5.8. It is further submitted that the dominant portion of a
mark has the greater strength or carries more weight. The major
feature of the mark “PhonePe” is “Pe”, as coined by the plaintiff and
such dominant feature, if unique, is entitled to protection. To
buttress the said argument, reliance is placed on a Division Bench
the judgment of the Delhi High Court in the case of South India
Beverages Pvt Ltd v. General Mills Marketing Inc and another, 2014
SCC OnLine Del 1953. It is added that where a family of marks is
involved, as in the present case, the identification of the dominant
part is greatly simplified and, hence, protection has to be granted to
the party possessing the family of marks. In this regard, reference
has been made to a judgment of the learned Single Judge of the
Delhi High Court in the case of Bennet, Coleman and Company Ltd
v. Vnow Technologies Private Limited and another, 2023 SCC
OnLine Del 864. Further reliance has been placed on the judgment
of the United States District Court in the case of McDonald's
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Corporation v. Druck and Gerner DDS, PC., 814 F. Supp. 1127
(1993), wherein the prefix “Mc” used by McDonalds in combination
with a generic food name as a common component of family of
marks was recognized.
5.9. Distinguishing the judgment delivered by a learned Single
Judge of the Bombay High Court in the case of Phonepe Private
Limited v. Resilient Innovations Private Limited [Order dated
6.4.2023 in Interim Application (L) No.25032 of 2021], it is
submitted that the the issue of bouquet of marks and family of
marks was not dealt with by the Bombay High Court and, that
apart, the mark “is” has not been considered and the test of
prosecution history estoppel was wrongly applied. To bolster the
said argument, learned Senior Counsel referred to the judgment of
a learned Single Judge of this Court in the case of Neuberg Hitech
Laboratory Pvt Ltd v. Ganesan's Hitech Diagnostic Centre Pvt ltd,
MANU/TN/5682/2022, wherein it is held that interim relief cannot
be refused on the ground of prosecution history estoppel. It is
submitted that the Delhi High Court and the Bombay High Court did
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not consider the judgment of the Madras High Court in the case of
Neuberg Hitech Laboratory Pvt Ltd (supra).
6.1. Per contra, Mr.R.Sathish Kumar, learned counsel for the
defendants, contends that the marks “PhonePe” and “DigiPe” are
dissimilar. To claim a part of their trademark “Pe”, which is
common in both marks, is barred by Section 17 of the Trademarks
Act, 1999. The word “Pe” forms a part of the registration
“PhonePe” and there is no registration for English word “Pe”
separately and only the Hindi “is” is registered.
6.2. The next plank of the argument is that the word
“PhonePe” means “on the phone” and is, therefore, generic. As
regards the acquired distinctiveness, it is submitted that it depends
on the factual finding on the facts of each case. Though “Pe” is
phonetically identical to “Pay”, the plaintiff has represented it as
“Pe” to the public and there is no material before the Court to show
that there are advertisements or indications that the plaintiff has
educated or advertised this to the public in any manner whatsoever.
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In any event, it is submitted that the word “PhonePe” is clearly
generic and not descriptive and even if it is taken as descriptive, the
same cannot have acquired distinctiveness. In support of his
submission, reliance is placed on a judgment of the Delhi High Court
in the case of Marico Limited v. Agro Tech Foods Limited, 2010 SCC
OnLine Del 3806.
6.3. Learned counsel for the defendants further submitted
that the trademark “PhonePe” cannot be said to have acquired any
distinctiveness. The acquisition of distinctiveness is a matter of fact
and a decision on distinctiveness could be made only after evidence
is adduced by the parties. In this regard, reliance is placed on the
judgment of a learned Single Judge of the Delhi High Court in the
case of PhonePe v. Ezy Services, 2021 (86) PTC 437. Drawing
attention to paragraph 8(i) of the very same judgment, it is pointed
out that the plaintiff had admitted before the Delhi High Court that
“CardPe” was the prior user and adopter of the “Pe” formative
mark and the said fact belies the plaintiff's submission that it was
the innovator thereof. The Bombay High Court judgment in
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Phonepe Private Limited v. Resilient Innovations Private Limited
(supra) is also referred to assert that the plaintiff is not the first
person to use the trademark “PhonePe” and such averment in the
plaint is palpably wrong.
6.4. Learned counsel for the defendants submitted that the
plaintiff has first approached the Delhi High Court seeking injunction
against the trademark “BharatPe” and next approached the Bombay
High Court against the trademark “PostPe”. Although the said facts
precede the filing of the instant suit, the same were not brought to
the notice of the learned Single Judge who initially granted ex parte
injunction and the suppression of facts disentitles the plaintiff from
claiming equitable relief of injunction either on infringement or
passing off.
6.5. It is further submitted that the defendants' DigiPe App
facilities services only to merchant establishments and the same
cannot be used by an individual customer and, therefore, the
services offered by the plaintiff and the defendants are different and
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there is no overlapping of services, which is the main factor to be
considered in an action for passing off.
6.6. Refuting the argument of learned Senior Counsel for the
plaintiff that the defendants in their reply have accepted that status
of the plaintiff's trademark as well-known, it is submitted that the
reply has to be considered in its entirety and a sentence should not
be read in isolation. In the said reply, it is categorically stated that
as the goods and trademarks are different, there would be no
confusion amongst the public and the marks have to be taken as a
whole and when compared PhonePe and DigiPe are different.
6.7. It is submitted that the question whether the trademark
“PhonePe” is distinctive or descriptive itself is not prima facie clear
and two High Courts have refused injunction. The balance of
convenience is in favour of the defendants, as the similarly placed
defendants have not been restrained on account of suppression and
forum-shopping by the plaintiff. In any event, as the suit itself is
ready for trial, the issues can be framed and they can be dealt with
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and resolved in the trial. In effect, he prayed for dismissal of the
appeals.
7. We have considered the rival submissions on either side
and perused the documents available on record.
8. The plaintiff filed the suit to declare the “PhonePe” mark as
well-known trademark under Section 2(1)(zg) read with Section 11
of the Trademarks Act, 1999. Along with the relief of declaration,
the plaintiff sought permanent injunction restraining the defendants
and all other persons claiming through or under them from in any
manner infringing the registered trademarks “PhonePe” of the
plaintiff by using the “DigiPe” marks and/or any other identical or
deceptively similar mark in any manner whatsoever. So also
permanent injunction was sought to restrain the defendants and all
other persons claiming through or under them from in any manner
passing off and/or enabling others to pass of the plaintiff's
trademark “PhonePe” by using the “DigiPe” mark, with other
consequential reliefs of injunction. Applications for temporary
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injunction pending the hearing and final disposal of the suit were
also filed.
9. Initially, the learned Single Judge was pleased to grant ad
interim injunction. However, under the impugned order, the said ad
interim injunction is vacated. Aggrieved thereby, the present
appeals.
10. It appears that the “PhonePe” is a registered trademark of
the plaintiff. The same is a distinctive mark conceived and adopted
by the plaintiff as early as September, 2015. The Hindi equivalent
of the word “Pe”, to wit “is”, is registered with the Registrar of
Trademark. According to the plaintiff, the plaintiff has got 40%
share in UPI business in India. The defendants clandestinely
applied for the registration of the offending mark “DigiPe” on
26.9.2022 and the said act of the defendants necessitated filing of
the suit.
11. The case of the plaintiff revolves around the fact that the
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plaintiff's registered mark “PhonePe” is a well-known mark and the
word “Pe” conceived by the plaintiff is the dominant element in the
registered trademark of the plaintiff. Ergo, the usage of the same
suffix “Pe” in the trademark of the defendants “DigiPe” would cause
confusion in the minds of the general public with average
intelligence.
12. The relief of injunction during the pendency of the suit is
an equitable relief. The plaintiff has to satisfy all the ingredients
viz., prima facie case, irreparable loss and balance of convenience
for claiming temporary injunction. It is also trite that the appellate
court shall be loath in interfering with the discretion exercised by
the trial court, unless it is demonstrated that the discretion
exercised is perverse and based on irrelevant facts.
13. It is not in dispute that the plaintiff is having registration
for the combination of the word namely “Phone” and “Pe”. The
expression “Pe” is not registered. The Hindi equivalent of “Pe”, to
wit “is”, is registered with the Trademark Registry.
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14. The plaintiff's trademark is “PhonePe”, whereas the
defendants' trademark is “DigiPe”. Except the suffix “Pe”, there is
no other similarity. It appears that the suffix “Pe” of the plaintiff is
not one of its kind and there are other trademarks with “Pe” already
in the market, such as “Phone Pe Deal”, “Phone Pe Store”, “Phone
Pe Crore”, “Pe”, “Pay” and so on. The plaintiff while registering its
trademark has taken a stand before the Registrar of Trademark that
such cited marks were not similar to its mark “PhonePe” for the
reason that the mark “PhonePe”, taken as a whole, was distinct
from such marks such as “Phone Pe Deal”, “Phone Pe Store”,
“Phone Pe Crore”, etc. The plaintiff is approbating and reprobating.
While getting its trademark registered, the plaintiff's stand was that
the cited marks were not similar to its mark “PhonePe” and now it is
making a grievance against the defendants for using the mark
“DigiPe”. As observed above, the grant of injunction is an equitable
relief. The plaintiff has taken a somersault while taking a stand in
the plaint, than what it took while registration of its mark.
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15. It needs to be considered that there are other trademarks
in circulation with the suffix “Pe”, such as “BharatPe”. The plaintiff
could not get injunction against “BharatPe”. It is not that the suffix
“Pe” is used by the plaintiff exclusively. As observed above,
“BharatPe” is operating with suffix “Pe”, so also “Phone Pe Deal”,
“Phone Pe Store”, “Phone Pe Crore”, etc.
16. It also appears that the area of operation of the plaintiff
and the defendants is not completely the same. As per the case of
the plaintiff, its application “PhonePe” acts as a container for various
payment instruments, including but not limited to wallet,
debit/credit card, Unified Payment Interface (UPI) and the external
wallet. The application can be used to pay bills, recharge and send
money. The plaintiff provides its services to businesses/merchants
by enabling them to accept payments and services from its
customers for the products and services on their platform. Whereas,
the defendants “DigiPe” App facilities services only to merchant
establishments and the same is not used by an individual customer.
It has not been shown that the plaintiff and the defendants cater to
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the same clientele and/or customers.
17. The learned Single Judge has also observed that the
plaintiff is changing its stand before various courts.
18. On the given facts and circumstances of the case, it is
difficult to reconcile the plaintiff's stand taken before different
courts. The stand taken before the Registrar of Trademark was
absolutely different and not coherent with the stand taken in the
present matter. The stand taken before the Delhi High Court while
litigating against “BharatPe” was also completely different. The
plaintiff in the said case admitted that “CardPe” was the prior user
and adopter of the “Pe” formative mark. The Plaintiff is not the
innovator of the “Pe” formative mark. The learned Single Judge has
properly marshalled the same.
19. In the light of the above conspectus, it is not a fit case for
us to substitute the views of the learned Single Judge. Moreover,
the suit is also now ready for trial, where the parties can adduce
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their evidence and matter can be dealt with on the basis of evidence
adduced by the parties.
20. We make it clear that the observations made herein above
are only prima facie in nature and the learned Judge shall decide
the suit on the basis of evidence to be adduced before it and would
not be influenced by the observations made in the present appeals.
In view of the aforesaid, the appeals stand dismissed.
However, with no order as to costs. Consequently,
C.M.P.Nos.15132, 15133, 15134, 15141, 15142, 15143, 15160,
15165, 15169, 15155, 15162 and 15163 of 2023 are closed.
(S.V.G., CJ.) (P.D.A., J.)
22.08.2023
Index : Yes/No
Neutral Citation : Yes/No
sasi
To:
The Sub Assistant Registrar
Commercial Division
High Court, Madras.
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O.S.A.(CAD) Nos.70 to 73 of 2023
THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU,J.
(sasi)
O.S.A. (CAD) Nos.70 to 73 of 2023
22.08.2023
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