The Madras High Court recently rejected a lawsuit filed by PhonePe, which sought to have its mark recognized as a well-known trademark and to obtain a permanent injunction against the brands "BundlePe" and "LatePe."

Justice P. Velmurugan remarked that the term "Pe" was not unique or distinctive, as claimed by PhonePe, and was a commonly used term in the payment services sector. The court observed that "Pe," a transliteration of the Hindi word "Pay," was widely adopted by major companies like Google Pay, Paytm, and ApplePay. Given the widespread use of "Pe" in the payment industry, the court ruled that PhonePe could not claim exclusive association with the term.

“The primary concern revolves around the distinctiveness of the term "Pe" and its potential to create a mistaken association between the plaintiff's and defendant's services. First, the term "Pe" is not as unique or distinctive as the plaintiff claims. The defendant has pointed out that "Pe" is commonly used in the payment services industry and is a transliteration of the Hindi word "Pay," which is widely used by other prominent companies such as Google Pay, Paytm, and Apple Pay,” the court observed.

PhonePe argued that it held ownership of the "PhonePe" trademark, which it had created by combining the words "Phone" and "Pe." The company asserted that it had been using the mark since 2015, and it had registered the trademark under multiple classes of the Trade Marks Act.

PhonePe further submitted that it had registered several phonetic variations of the mark, including "FonePe" and "PhonePay." The company argued that its brand had achieved significant recognition in the digital payment sector, processing approximately 48% of all UPI transactions in India.

PhonePe accused the defendants, BundlePe Innovations Pvt Ltd, of using similar brand names—"BundlePe" and "LatePe"—to offer competing payment services. The company claimed that the defendants were using these marks to deceive consumers and create a false association with the PhonePe brand, thereby exploiting its reputation and goodwill. Despite a cease and desist notice being issued, the defendants allegedly continued to use the marks, prompting PhonePe to take the matter to court.

BundlePe countered by arguing that PhonePe's trademark was generic, as the combination of the words was neither unique nor distinctive. They contended that PhonePe was attempting to monopolize common words like "Phone," "Pay," and "Pe" by claiming exclusive rights to use them in various spellings.

The court sided with BundlePe, noting that the term "Pe" had not been uniquely associated with PhonePe's brand in the broader market. It also pointed out that the prefixes used by the defendants—"Bundle" and "Late"—added significant distinction, reducing the likelihood of consumer confusion. The court observed that PhonePe's argument relied on a theoretical risk of confusion, but there was no concrete evidence of such confusion in the marketplace.

The court ultimately ruled that the defendants were using the word "Pe" in good faith as part of their branding for their services. It concluded that the use of "Pe" by the defendants did not infringe upon PhonePe's registered trademark. As a result, the court dismissed the suit.

Counsel for the Petitioner: Mr. P. Giridharan For Mr. H. Siddharth

Counsel for the Respondent: Mr. R. Sathish Kumar

Case Title: PhonePe Private Limited v. BundlePe Innovations Pvt. Ltd