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No Exclusivity Over Parts of a Composite Mark

By – Ramesh Vaidyanathan & Nidhi Tandon

Generally, businesses opt to file for a composite mark, i.e., a descriptive word combined with distinctive words and/or elements. It is a well-established legal principle that a trademark has to be used in its totality. A trademark having several components in it, i.e., a composite mark, when registered, is taken as a whole. If, however, the applicant seeks exclusive rights over a part of a trademark, he/she may have to register that part separately. Indian courts have time and again explained the rules for determining trademark infringement when the conflicting trademarks are composite marks. The issue was again highlighted by the Delhi High Court recently in a dispute PhonePe Pvt. Ltd. (Plaintiff) & Ezy Services (Defendant).

Facts of the case:

The Plaintiff and Defendant are online payment service providers using the marks ‘PhonePe’ and ‘BharatPe’ respectively. The Plaintiff had filed a suit before the High Court seeking a permanent injunction against the Defendant over the use of ‘Pe’ or any deceptive mark identical and/or similar to the Plaintiff’s trademark PhonePe.

Arguments of the Plaintiff:

  1. The Plaintiff coined and adopted the trademark PhonePe since 2015 and acquired registration in 2016.

  2. “Pe” is just a transliteration of the Devanagari “पे”, which is an innovative and fanciful adaptation by the Plaintiff.

  3. “Pe” is an invented word not found in the English dictionary and when combined with “Phone”, which is an ordinary dictionary word with a known meaning, “Pe” becomes the dominant feature of the trademark “PhonePe”.

  4. A consumer of average intelligence on seeing the Defendant’s mark BharatPe would notice the “Pe” suffix and associate the services of the Defendant with that of the Plaintiff.

  5. The Defendant started to use their mark BharatPe only in 2018 by which time the reputation and goodwill of the Plaintiff was well established.

Arguments by the Defendant:

  1. Plaintiff’s mark PhonePe is a composite mark, and no separate registration has been obtained for “Pe” orपे;

  2. Defendant has been using its mark BharatPe since 2016 and is inherently distinctive of the goods and services provided;

  3. The marks cannot be dissected and should be compared as a whole and when compared as a whole are not similar;

  4. Neither the Plaintiff nor the Defendants use “Pe” as a standalone mark in the course of their business activities.

  5. Several entities use the expression “Pay” as a suffix, such as GooglePay, AmazonPay, et al. The suffix “Pe” is common to the trade and descriptive of the services provided by the Plaintiff, which was to afford the consumer an option to make payments from a phone using the Plaintiff’s app.

Important principles laid down by the High Court

The High Court ruled that there was no case for the grant of interim injunction against the Defendants. In doing so, it clarified the following principles:

Composite Marks must be compared as a whole

  1. The proprietor of a registered trademark “consisting of several matters” can claim exclusive rights “to the use of the trademark taken as a whole”. This is the “anti- dissection” rule where exclusivity can be claimed only in respect of the entire composite mark, and not a part of the composite mark.

  2. As both PhonePe and BharatPe are composite marks, the marks cannot be dissected and the Plaintiff cannot claim exclusivity solely over the “Pe” suffix. Exclusivity can be claimed and infringement/passing off alleged only in respect of the entire mark of the Plaintiff and not in respect of a part thereof.

‘Dominant Mark’ Test

  1. Several High Courts have analysed the ‘dominant mark’ test wherein ‘dominance’ could be accorded to a part of a mark in case of composite mark when a particular element enjoys prominence with respect to other elements. While a trademark is not to be dissected into parts, if a “dominant part” of the mark is indeed imitated, the Court may always examine if through such imitation, an infringement has taken place.

  2. In this case, “Pe” used by the Plaintiff admittedly connotes the expression “pay”, a common dictionary word and clearly descriptive of the services provided by both the parties. Misspelling a dictionary word pay as ‘Pe’ would neither grant exclusivity nor be considered as a dominant feature of a mark. Barring the common “Pe” suffix, ‘Phone’ and ‘Bharat’ are not even phonetically similar.

Acquired secondary meaning

  1. To be a trademark that has acquired secondary meaning, the mark must have become recognizable as a brand for particular services and/or goods from only one source. A relevant example would be Apple. While the word apple has a primary meaning, many people also recognize it for its second meaning. And, that secondary meaning is specific to a brand of computers, phones, etc.

  2. For a descriptive mark or its part to acquire secondary meaning, use of such trademark has to be over a long period of time that even a descriptive word is unmistakably and only relatable to one source. Acquisition of secondary meaning is a matter of trial and evidence.

  3. Here, it is a matter of a separate trial to assess if the Plaintiff has been able to establish that ‘Pe’ suffix has acquired secondary meaning. The evidence provided is insufficient and inhibits the HC from arriving at any prima facie conclusion that the “Pe” suffix had acquired secondary meaning, invariably associated with the Plaintiff.

This judgment has reaffirmed some of the basic principles of trademark law that prohibit adaptation and exclusive claim over composite marks or part of the mark.

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