Introduction

In the case of PHONEPE PRIVATE LIMITED v. BUNDLEPE INNOVATIONS PVT LTD. decided by the Madras High Court on January 21, 2025, the Court explored the complex interplay between trademark distinctiveness, consumer confusion, and the generic use of common suffixes within the digital payments industry. At its heart, the dispute arose over the alleged infringement and passing off by the defendants who launched marks such as “BundlePe” and “LatePe” – names that contain the common element “Pe” which the plaintiff claims as a unique identifier of its widely recognized “PhonePe” services.

The plaintiff, a leading digital payments platform that enjoys significant market share, alleged that the defendants’ marks were deceptively similar, inclined to mislead consumers, and diluted its trademark goodwill. Conversely, the defendant argued that the use of “Pe” concentrated on a generic aspect of the payment services industry; that the prefixes “Bundle” and “Late” sufficiently distinguish their products; and that the case was even outside the correct jurisdiction. The procedural history involved extensive documentary evidence and comprehensive oral submissions from both parties.

Summary of the Judgment

The Madras High Court, under the guidance of the Honourable Mr. Justice P. Velmurugan, examined ten distinct issues ranging from allegations of deceptive similarity and passing off to claims for injunctions and damages. After evaluating the substantive facts, supporting evidence, and detailed submissions, the Court concluded on nearly all issues in favour of the defendant.

Specifically, the Court found that:

• The defendant’s marks “BundlePe” and “LatePe” are not deceptively similar to the plaintiff’s “PhonePe” mark, primarily because the suffix “Pe” is a generic element in the digital payments industry.
• The plaintiff was not entitled to a permanent injunction against infringement or passing off given the absence of demonstrable consumer confusion.
• The claim for damages of Rs.10,00,000 was unsupported by concrete proof of loss, with no evidence of misappropriation of profits by the defendants.
• No order for rendering accounts was granted due to the lack of established infringement or passing off.
• The use of domain names by the defendants, along with additional claims of copying trade dress or website content, was also dismissed.
• Finally, the Court ruled that the “PhonePe” mark does not qualify as a well-known trademark warranting broad protection under Section 2(zg) and Section 11 of the Trade Marks Act, 1999, given the common usage of “Pe” in the industry.

Consequently, the suit was dismissed without an order as to costs.

Analysis

Precedents Cited

Although the judgment referenced prior decisions such as Laxmikant V. Patel v. Chetanbhai Shah, Godfrey Philips India Ltd. v. Girnar Food & Beverages (P) Ltd., and Giorgio Armani v. Banjara Hills, the Court found these precedents distinguishable in the facts of the present case. The prior rulings had supported the grant of injunctions and damage awards in contexts where consumer confusion was unmistakable and where distinctive elements were clearly established. In contrast, in this dispute over the “Pe” element — a component widely utilized (similarly to “Pay” in Google Pay, Paytm, and Apple Pay) — the precedents did not compel a different outcome.

Legal Reasoning

The Court’s legal reasoning revolved around several key principles:

• Distinctiveness of the Mark: The Court meticulously considered whether “Pe” has acquired secondary meaning attributable uniquely to the plaintiff’s “PhonePe” brand. Relying on the fact that “Pe” is a transliteration of the Hindi word for “Pay” and is extensively used within digital payment services, the Court held that it fails to possess inherent or acquired distinctiveness sufficient to warrant exclusivity.
• Consumer Confusion: A critical requirement for injunctions or claims for passing off is the likelihood or evidence of deception amongst consumers. The Court noted the absence of substantive evidence of actual confusion, despite a theoretical risk. The differences induced by prefixes such as “Bundle” and “Late” were held to adequately differentiate the defendants’ services.
• Doctrine of Genericness: The ruling leaned heavily on the notion that certain words, particularly when used in sectors where descriptive language is common, cannot be monopolized. Since “Pe” was deemed a common component in the industry—illustrated further by Rule 28 of the Trade Marks Rules permitting transliteration between Hindi and English—the claim for trademark infringement was undermined.
• Jurisdiction: The Court also resolved an additional jurisdictional issue, clarifying that because the defendants were actively conducting business in Chennai and relevant transactions occurred there, the suit was maintainable in the jurisdiction despite the registered offices of the parties being in other cities.

Impact on Future Cases and the Relevant Area of Law

This judgment is significant in that it sets a precedent regarding the limits of trademark protection in the digital payment field. The decision reinforces that not every commonly used element—even if part of a well-known brand—can be exclusively appropriated. Future litigants and corporate entities will likely refer to this case when debating:

• The boundaries of what constitutes a distinctive mark versus a generic descriptor.
• How the courts evaluate consumer confusion where similar terminologies are unavoidable in a competitive industry.
• The permissible extent of transliteration rights as supported by Rule 28 in trademark applications and disputes.

In essence, the judgment provides a clear framework for assessing innovation in branding while balancing fair competition.

Complex Concepts Simplified

Trademark Distinctiveness: The concept focuses on whether a mark is capable of uniquely identifying the services of one company. In this case, rather than being unique, “Pe” is a term that many players use to indicate payment services.

Passing Off: This legal claim arises when one business misrepresents its goods or services as being those of another. The Court held that the use of “BundlePe” and “LatePe” did not misrepresent the source because the additional words (“Bundle” and “Late”) provided logical differentiation.

Transliteration Under Rule 28: This rule permits the conversion of words between Hindi and English. Here, “Pe” is simply the Hindi representation of “Pay,” reinforcing that its use is generic rather than an exclusive identifier.

Conclusion

The Madras High Court's ruling in this case ultimately reinforces the principle that not every element of a successful brand can be claimed as an exclusive trademark right—especially when the element in question is generic within a given industry. By dismissing the plaintiff’s claims against the defendants on multiple grounds (lack of deceptive similarity, absence of consumer confusion, and insufficient evidence of financial harm), the verdict not only upholds the defendants’ right to operate under “BundlePe” and “LatePe” but also highlights the challenges faced by large brands in monopolizing generic language.

This judgment serves as an important precedent for courts, evidencing that trademarks must be distinctly unique and clearly associated with a particular source to warrant broader protection. It also underscores the importance of factoring in the competitive landscape of an industry where common, descriptive terms are in regular use. For future disputes, the decision offers a balanced approach by weighing consumer perception, market practices, and statutory provisions about transliteration and genericness.

Ultimately, the case reminds legal practitioners and businesses alike that while branding is crucial, the exclusive rights to common elements may be limited, ensuring a level playing field in a competitive digital marketplace.