PhonePe Vs. BharatPe: Anti Dissection vs Dominant Mark Test

When it comes to the success of a particular brand, Trademarks play an essential role. Trademarks of a brand are its unique identification captured in various elements such as color scheme, logo, brand name, a stylized representation of the name and logo, etc. The first step towards an effective branding strategy is Trademark Registration. However, as simple as it may sound, registration is a complicated process riddled with various steps and possible roadblocks that may arise on the way. Companies are often pitted against each other, claiming exclusivity over a particular mark. Often, one claims to be an exclusive owner of a mark, alleging infringement by the other party.

The recent trademark battle between PhonePe and BharatPe is a classic example of the situation elaborated above. The judgment laid down by the Delhi High Court not only put the controversy to rest but also comprehensively dealt with the tests employed by the courts in determining similarity between the two marks.

Facts of the Case

The commonly known UPI and payment transfer company, PhonePe had filed an application of interim injunction against another online payment service provider BharatPe in the Delhi High Court. While both are primarily online payment services, it must be pointed out that the defendant, BharatPe is a merchant exclusive business. In contrast, the plaintiff’s services are available to anyone who downloads the app, including customers and merchants. The plaintiff and the defendants used the marks “PhonePe” and “BharatPe”, respectively.

The plaintiff alleged that the use of the word “BharatPe” and the mark used by the defendant were deceptively similar to and infringed the plaintiff’s registered trademark along with passing off of the plaintiff’s services. They claimed that “Pe” was an essential and dominant part of their composite mark and constituted a distinguishing element. The plaintiff further claimed that “Pe” is an invented word, and in combination with “Phone”, it creates a unique mark. The plaintiff consequently sued the defendant seeking a permanent injunction against the use of the mark ‘Pe’ or any deceptive variant of ‘PhonePe’.

Basic Rules of Trade Mark Infringement

Listing a plethora of judgments, the court comprehensively dealt with the basics of deceptive similarity, discussing the various rules to be employed by the court to reach a conclusive decision. The basic principles to be kept in mind in cases dealing with deceptive similarity in passing off suits are,

  1. Along with the appearance or sound of the trademark, it is also essential to look into the class of the customers who would be purchasing the relevant product or availing the relevant services. Further, the nature of goods and services is also relevant.
  2. While in opposition to registration proceedings, it is for the defendant to prove deceptive similarity. In case of passing off actions, the onus of proof lies on the plaintiff.
  3. In dealing with confusions caused by deceptive similarity, it is to be judged based on the state of mind of the consumer and whether they can differentiate the two marks.
  4. When dealing with phonetic marks, it is essential to factor in careless pronunciation and speech due to imperfect recollection and rules out any meticulous comparison of the words and syllables.
  5. The marks have to be considered as a whole, as an ordinary consumer would not split a word or name in a trademark into its components, but would remember the overall marks and the goods/services associated with them. The similarity and likeliness of deception between the marks have to be gauged by analysing the marks in totality.
  6. While analysing, both phonetic and visual similarity is to be considered. While the general rule dictates that the marks are to be considered as a whole, the court has to consider those parts of the marks that are phonetically similar and judge whether such similarity is likely to confuse while keeping all the other circumstances into consideration.
  7. While there are certain tests and yardsticks laid down, there is no fixed measure for the similarity between two marks; it is always to be decided depending upon the facts of the case, keeping in mind the consumer’s viewpoint.

Anti-Dissection vs Dominant Mark Test

When dealing with cases of deceptive similarity between composite marks(marks consisting of more than one element), the Anti-dissection test and dominant mark test rule the determination tests. While the anti-dissection test states that marks are to be compared as a whole, the dominant mark test states that in certain cases the marks may be dissected, in order to discern any dominant part of the mark to analyse if the mark is used by the defendant is infringing upon that. While these two tests may appear to be contradictory to each other, the latter in actuality enables a better application of the former.

The Anti-dissection rule draws from Section 17 of the Trade Marks Act, 1999. Section 17(1) of the mark states that in case of a mark consisting of several matters, the proprietor of the mark holds exclusive rights over the trademark as a whole. Sub-section (2) further provides that registration of a composite mark will not grant exclusive rights over parts of such mark unless these parts have been separately applied for trademark protection. The court referred to the case of Kaviraj Pandit Durga Dutt Sharma vs Navaratna Pharmaceutical[1], which had upheld the anti-dissection rule stating that “the object of the enquiry in the ultimate analysis is whether the mark used by the defendant as a whole is deceptively similar to that of the registered mark of the plaintiff”. The court further stated that this deceptive similarity will be judged from the point of view of the purchaser who is the one who will be deceived by the similarity.

However, the case in which the Delhi High Court has skilfully balanced the two tests is M/s South India Beverages Pvt. Ltd. v. General Mills Marketing Inc.[2], wherein it was held that while a mark must be considered as a whole, a higher degree of importance may be accorded to a “dominant” part of the mark in cases of composite marks. This particular element of the mark is known as the “dominant mark”. Viewing a dominant component of the conflicting mark as a preliminary step is not to be taken as a violation of the anti-dissection rule, rather it can be an effective tool to determine the probable reaction of the customers to the conflicting marks as a whole. Both the tests of determination are not antithetical to one another, rather, complement each other when viewed from a holistic perspective. In cases where the dominant part of the essential features of the trademark are copied by the defendant, the court may dissect that part/feature to determine whether such copying amounts to infringement.

Tweaked Generic Mark

An important rule and an essential element of trademark registration is that a mark applied for registration must not be generic or descriptive. The generic mark consists of those marks that contain such terms that are customary in the trade where they are to be used and descriptive marks are those that indicate the purpose of goods and services covered by the mark. The rule prohibiting registration of generic or descriptive marks falls under absolute grounds of refusal for trademark registration and can be found under Section 9 of the Trade Marks Act. There is an absolute bar against registration of generic marks, and a proprietor cannot claim exclusivity over such words by merely misspelling the word. The court referred to the case of Marico Limited vs Agro Tech Foods Limited[3], where it was held that the mark ‘LOWSORB’ was merely a tweaked version of the generic mark ‘LOW ABSORB’, indicating the characteristic of the oil, and hence not protected under trademark act. Similarly, in the recent judgment of Delhivery Private Limited vs Treasure Vase Ventures Private Limited[4], it was held that the mark ‘DELHIVERY’ was a descriptive mark indicative of the services to be covered under the mark, i.e., delivery of goods, and hence no exclusivity can be claimed by such tweaking of a generic mark.

Conclusion

Going by the anti-dissection rule, the court held that the plaintiff cannot claim exclusivity over the word “Pe”. Both “PhonePe” and “BharatPe” are composite marks and cannot be dissected into constituent parts. Further, the word “pe” touted by the plaintiff to be a dominant and essential mark cannot be exclusively held by the plaintiff as it is a mere misspelling of and descriptively connotes to “pay” and indicates the services covered by the apps, i.e., online payment. It was further held by the court that the nature of the services provided by both parties is also different. While anyone can use the services of the plaintiff’s app, the BharatPe app is meant exclusively for merchants, hence leading to different trade channels for the services of both apps. Barring the word “Pe”, both the marks are distinct and hence there is no case of infringement made out and the Hon’ble High Court refused the grant of injunction against the defendant.


[1] AIR 1965 SC 980

[2] FAO(OS) No. 389/2014

[3] 2010 (44) PTC 736 (Del)

[4] CS(COMM), 217 of 2020

About Sonal Sinha 7 Articles
I am currently in the fourth year of BA LLB at Symbiosis Law School Noida. Over the years at law school, I have developed a keen interest and passion for IPR laws and like to research upon and write blogs on topics related to Trademarks and Copyrights law. I hope to bring some intriguing content your way through my articles at this platform. Apart from that, I am also an avid reader and a fitness enthusiast

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