Share on facebook
Share on twitter
Share on linkedin

PhonePe Vs. BharatPe Case: No Exclusivity Over a Part of a Mark, Not Even by Misspelling It

Registration of the (whole) mark does not confer an exclusive right over a part of a registered mark. Similarly, no exclusivity can be claimed over a descriptive mark or a descriptive part of the mark, not even by misspelling it. This was the ruling of the Delhi High Court in a recent Trademark Infringement & Passing Off matter between PhonePe Pvt. Ltd. (Plaintiff) & Ezy Services & Anr. (Defendants). Hon’ble Justice C. Hari Shankar affirmed some of the fundamental principles of the Trademark Law, which have been asserted by various Courts from time to time.
PhonePe’s Perception:

PhonePe in its plea before the Delhi High Court stated that: a consumer of average intelligence and imperfect recollection, on seeing the defendants’ mark BharatPe would immediately associate it with PhonePe.

Well, how often is our intelligence questioned and challenged, even without our knowledge? Considering the deep inroads that technology has made into our lives now, I reckon all of us are reasonably aware of the prominent digital wallets in the market. Knowing that, it is contestable how many of us would have wondered about any association between these two marks purely based on the similarity in their suffix “Pe”.

Background:

The plaintiff had filed a suit before the Delhi High Court seeking a permanent injunction and other remedies against the defendants’ use of ‘Pe’ or any deceptive mark identical and/or similar to the plaintiff’s trademark ‘PhonePe’. The plaintiff alleged that the use of the word “BharatPe” itself, infringed the plaintiff’s registered trademark and amounted to passing off.

The plaintiff in its suit claimed that “Pe” is an essential, dominant, and distinguishing feature of the plaintiff’s registered trademarks. Plaintiff further claimed that “Pe” is an invented word, not to be found in the English dictionary and when combined with “Phone”, which is an ordinary dictionary word with a well-known meaning, “Pe” becomes the dominant and essential feature of the plaintiff’s trademark “PhonePe”.

Court’s Findings and Rulings:

The Hon’ble Delhi High Court’s decision in this matter seems to be premised based on following three principles, which have already been established earlier in multiple Judgments by various Courts:

a) The Anti-Dissection Rule:
The Hon’ble High Court observed that the registered mark ought not to be dissected for the purpose of comparison with the conflicting mark. However, the Court acknowledged the exception of “dominant mark” test, under which, if any part of the plaintiff’s mark was found to be dominant, the Court was required to examine whether such dominant part of the plaintiff’s mark was infringed by the defendant’s mark.

The plaintiff contended that “PhonePe” was a combination of the words “Phone” and “Pe”, where “Phone” was a common dictionary word and the suffix “Pe” was not a dictionary word, which made it the dominant feature of the plaintiff’s trademark. Similarly, in the defendant’s trademark, the word “Bharat” was publici juris and “Pe” formed the dominant element of the mark “BharatPe”. However, the Court was not convinced on the argument and did not find “Pe” to be the dominant part, therefore, the marks were not allowed to be dissected for the comparison.

The Court ruled that while applying the above principles to the facts in hand, the following positions emerged i.e. (i) “PhonePe” and “BharatPe” were both composite marks. (ii) the marks could not be dissected into “Phone” and “Pe” in the case of the plaintiff and “Bharat” and “Pe” in the case of the defendants; and (iii) the plaintiff could not claim exclusivity over the word “Pe”, as it was merely a misspelling of the word “Pay”, hence no infringement could be claimed on the basis of part of a registered trademark.

b) Separate Registration of a Part of a Composite Mark:
The Hon’ble Court further observed that since the plaintiff did not have any registration over the suffix “Pe”, therefore, it could not claim any exclusivity on the same. As a result, the question of infringement did not arise because of the alleged similarity between the non-essential, unregistered part of the composite mark.

In the cases of South India Beverages1 and P.K. Overseas Pvt. Ltd.2, the Delhi High Court explained the relation between the anti-dissection principle and the “dominant/essential feature” principle. The division bench relied on a passage from McCarthy on Trademarks and Unfair Competition, earlier cited in the case of Stiefel Laboratories3, which stated that “The rationale for the rule is that the commercial impression of a composite trademark on an ordinary prospective buyer is created by the mark as a whole, not by its component parts. However, it is not a violation of the anti-dissection rule to view the component parts of conflicting composite marks as a preliminary step on the way to an ultimate determination of probable customer reaction to the conflicting composites as a whole”.

c) Non-exclusivity of Descriptive or Generic Marks or Parts of Marks:
The Hon’ble Court observed that a party cannot claim exclusivity over a descriptive or generic mark or a part of the mark that is considered descriptive. The Court went on to observe that the plaintiff could not claim that the mark was non-descriptive merely by misspelling the descriptive word. However, the Court admitted an exception to this principle in situations where the descriptive or generic mark had acquired distinctiveness or secondary meaning.

The Court further observed that had the plaintiff been able to establish that the word “Pe” had acquired distinctiveness and secondary meaning, it might have been able to make out a case of infringement. However, in this case, the plaintiff’s use of the mark “PhonePe” was only since 2016 and even the defendants claimed to have extensive use of their mark “BharatPe”. Therefore, the plaintiff had not been able to make out a prima facie case.

In the case of Marico Limited4, the Court dived deep into the concept of acquired secondary meaning of a descriptive mark and held that while deciding whether a descriptive mark is registrable or not the “Courts should ordinarily lean against holding distinctiveness of a descriptive trademark unless the user of such trademark is over such a long period of time of many-many years that even a descriptive word mark is unmistakably and only relatable to one source i.e. the same has acquired a secondary meaning”.
1 South India Beverages v. General Mills Marketing, AIR 1965 SC 980
2 P.K. Overseas Pvt. Ltd. v. Bhagwati Lecto Vegetarians Exports Pvt. Ltd., 2016 SCC OnLine Del 5420
3 Stiefel Laborataries v. Ajanta Pharma Ltd, 211 (2014) DLT 296
4 Marico Limited v. Agro Tech Foods Limited, 2010 (44) PTC 736 (Del.) (DB)
The Marico case also discussed the nature and character of a misspelt word when used as a trademark and held that “if partly tweaked descriptive words and expressions of English language are claimed to be coined words, the same would result in a grave and absurd situation because a non-tweaked word being a completely descriptive word will in fact be deceptively similar to the tweaked descriptive English language word or expression of which registration is obtained”.

Conclusion:

The Hon’ble Court ruled that there was no case for grant of interim injunction against the defendants. The Court observed that except the common word “Pe” (suffix) it cannot be established that the marks “PhonePe” and “BharatPe” are confusingly or deceptively similar. Barring the suffix “Pe” these are two different words altogether with no commonality whatsoever.

The important legal positions that emerge from this decision are:
(i) In accordance with the “anti-dissection” rule, it was held that the composite marks were to be considered in their entirety rather than truncating or dissecting them into individual components/elements.
(ii) The registration of a composite mark cannot confer any exclusive rights over any part of such registered mark unless otherwise, such part is the dominant part of the registered mark.
(iii) No exclusivity can be claimed, over a descriptive mark, or a descriptive part of a mark, not even by misspelling it, unless otherwise the descriptive mark or descriptive part has attained distinctiveness, or it has acquired a secondary meaning.

This case has surely reaffirmed some of the basic principles of trademark laws that prohibit adaptation and exclusive claim over descriptive and generic marks or part of the mark.
Read about the important legal positions that emerge from the PhonePe V. BharatPe decision in this article.

POST A COMMENT

Share on facebook
Share on twitter
Share on linkedin

BigBasket Vs. Daily Basket Saga

Perils of using generic/descriptive terms as a “Trademark”

On February 21, 2021, when Ramesh Vel, the founder of a Coimbatore based startup “Daily Basket” tweeted about BigBasket’s alleged bullying through a cease & desist notice, no one ever thought that it would become such a big issue. Even before the news could spread, Daily Basket was prompt enough to create a page https://bbisabully.com/ to put forth their perspective and even posted a copy of the notice. They did not stop at this but went on to launch an online campaign #BoycottBigBasket.

This prompt and aggressive move surely garnered sympathies as well as support for Daily Basket and BigBasket was at the receiving end as it was perceived as a bully in the entire episode. Though it may not have caused any impact on BigBasket’s revenue, the Company cannot deny that the episode did put a dent in its brand reputation.

The Notice:

The cease & desist notice dated Feb 17, 2021, was sent to the startup Letsdaily India Private Limited, asking them to refrain from using the mark “Daily Basket” and any other name or a mark containing the term “Basket” and also sought Rupees Two Lakhs towards the cost of the legal notice.

Who owns/claims what?

Before analyzing the matter, let us understand the claims and ownerships over the subject marks.

Looking at the trademark database, BigBasket seems to have registered several variants of its brand “BigBasket” in various classes i.e. 29, 30, 31 & 35 (food & related goods and online marketplace). However, the record does not show or mention any use or registration of the term “Basket” by BigBasket independently.

Daily Basket claims to have started its business around August 2020 but there is no record of any trademark application/registration by them.

The term “Basket”:

Currently, there are two “Basket” marks that seem to have been registered in India; one being in Class 35 where the application is dated 2014 (appl. no. 2779571) and the other one in Class 31 where the application is dated 2017 (Appl. no. 3470365).

The mark “Daily Basket”:

With regard to the mark “Daily Basket”, currently there are 3 marks in the records of Trademark Registry in Class 35. The first “Daily Basket” mark (appl no. 1807585), which was filed way back in 2009, could not proceed to registration and the same stands abandoned.

The other “Daily Basket” mark (appl. no. 3042971), which stands “registered”, was filed in the year 2015. The third “Daily Basket” mark, which was filed in the year 2017, (app. no. 3491637) was refused registration due to various reasons including the presence of conflicting marks in the same class.

Interestingly, during the prosecution of the last two marks, the examiner did not cite “BigBasket” as a conflicting mark even though BigBasket’s trademarks were on record or registered during that period and in the same class – related to the same or similar services.

Other similar marks with prefix/suffix “Basket”:

There are over a dozen trademarks with suffix/prefix “basket” including, Oven Basket, Nature’s Basket, Ocean Basket, Fresh Basket, Health Basket etc. which appear to be in existence (registered or filed or used) on the Trademark Registry’s record as early as 1999 which is way prior to BigBasket’s coming into existence i.e., 2012.

Similarly, there are another over a dozen marks with prefix/suffix “basket” including Fbasket, EBasket, 4Basket, NutBasket, Medbasket, TekBasket, MilkBasket, Badi Basket, Aqua Basket, Pure Basket, Spin Basket, Eco Basket etc. which were registered post BigBasket’s trademark registration and most of them are in use and in relation to the goods/ services in Class 29, 30, 31 and 35.

BigBasket’s Claim – fair or unfair?

As per the cease & desist notice, BigBasket’s primary objection was over Daily Basket’s use of the term “Basket”. A simple comparison between the two marks (as shown in https://bbisabully.com/)makes it clear that there exists no similarity between the two logos. Therefore, the main issue in the subject matter was over the term “Basket”.

Without dwelling deep into the Trademark Law, which has already been done in many of the previously authored articles, it is abundantly clear that a term like “Basket” (in class 35) would be considered a descriptive mark hence non-registrable (we need not get into the nitty-gritty of how the other two “Basket” marks were registered).

Further, even though BigBasket has been threatening and opposing registration of various other marks with Prefix/Suffix “Basket”, the fact that it did not even attempt to register the mark “Basket” itself makes the strength of the contention fairly obvious.

What goes against BigBasket?

A plain reading of the cease & desist notice explains the seriousness of the matter. It is beyond anyone’s understanding how and on what ground one would claim exclusive ownership over the term “Basket” especially when a) you don’t have any registration over it; b) there are several already registered marks (similar) some of them being prior to even their commencement of business, and c) the mark being a descriptive one.

Perhaps, no one can deny the fact that BigBasket’s claims were far-fetched and demands overly ambitious. It is quite possible that they would not have been apprised with the basic principles of trademark law or rather the whole approach was very casual in nature.

It happens in many cases where the trademarks applications are opposed and users are threatened with legal notices even when there is no strong case. This is because, in India, it is not a common practice to fight back or take legal action for groundless threats.

What are the lessons learnt?

Getting involved in personal capacity must be avoided when a matter can be and should be handled by experts who know the ins and outs of the legal implications. In the instant case, the founder of Daily Basket got involved personally and used digital and social media to level allegations. The fact that BigBasket chose to respond in a clarification mode also did not go down well and the whole matter got murkier.

Had this been handled by their lawyers instead (considering the substance in the notice), it would have simply been concluded without any clamour and commotion. Involvement of founders or CEOs is advisable and welcome only in closed-door negotiations or dispute resolutions but definitely not in public forums.

Is it wise to adopt a generic mark?

Adoption and registration of generic and descriptive marks always have consequences, both in the short term as well as the long term. In the short term, it is an uphill task to get these marks registered, whereas in the long term one must keep contesting the use/registration of similar marks by third parties.

There is always a fraction of people who would advise you to adopt a generic/descriptive mark which makes the marketing team’s job much easier, but everyone does not get lucky and neither does everyone has deep pockets. The “Bookings.com” case is a good example where the matter went till US Supreme Court before the mark was registered and even then, they did not get the right to refrain others from using similar marks.

Similarly, in the recent Judgment of PhonePe Vs. BharatPe, the Hon’ble Delhi High Court asserted that no exclusivity can be claimed over a descriptive mark, or a descriptive part of the mark unless the descriptive mark or descriptive part has attained distinctiveness, i.e. it has acquired a secondary meaning.

The content of this Article does not necessarily reflect the views / position of Fox Mandal but remain solely those of the authors.

 

 

Know all about the validity of the claims made by both BigBasket and Dailybasket from a trademark registration perspective.

POST A COMMENT

Share on facebook
Share on twitter
Share on linkedin

Intellectual Property Appellate Board (IPAB) Amongst Other Tribunals Abolished Through an Ordinance

In a bid to streamline the functioning of tribunals and avoid delay in the dispensation of justice, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 has been promulgated by the President of India through a gazette notification dated April 04, 2021. A bill to the same effect had been passed in the Lok Sabha in February and was pending in the Rajya Sabha, however, the ordinance was brought in despite assurances that the bill would be sent to a standing committee for a review in light of opposition.

The ordinance is seen as another step in the process of rationalisation of tribunals that began in 2015 . Through the Finance Act, 2017, seven tribunals had been abolished or merged based on functional similarity, however, the Act underwent various legal challenges for being passed as a Money Bill in violation of Articles 107, 110 and 117 of the Constitution Of India and being against the basic tenet of independence of judiciary.

The Finance Act, 2017 had empowered the central government to notify rules on qualifications of members, terms and conditions of their service, and composition of search-cum-selection committees for 19 tribunals (such as Customs, Excise, and Service Tax Appellate Tribunal). The ordinance amends the 2017 Act to include provisions related to the composition of search-cum-selection committees, and term of office of members in the Act itself as directed by the Supreme Court in the Rojer Matthew Case . However, the ordinance limits the term of members to 4 years disregarding the Supreme Court’s decision in the IPAB Case 3, which stipulated a minimum term of 5 years.

The ordinance primarily dissolves existing appellate bodies under 9 statutes including the Intellectual Property Appellate Board (“IPAB” or the “Appellate Board”) and transfers their functioning to the concerned High Courts, Commercial Courts/Commercial Division of High Courts, Registrars, Central Government etc.

The amendments introduced by the ordinance across various IP statutes have been detailed below:

Trade Marks Act, 1999

  • The IPAB which was set up under Section 83 of the Trade Marks Act, 1999 to hear appeals against the Trademarks Registrar’s decisions under the Act has been abolished.
  • The ordinance also transfers the powers of the Board to the High Court and transfers the pending cases before IPAB to the respective High Courts under whose jurisdiction the Appeal would have been ordinarily filed.
  • To dismantle the Board, the ordinance has deleted provisions related to the IPAB including the establishment (Section 83) and composition of the Tribunal (Section 84), Qualification (Section 85), Term of Office (Section 86), Salaries (Section 88), Resignation and Removal (Section 89), Procedure and Powers (Section 92) Condition on interim order (Section 95) Chairman’s power to transfer cases from one branch to another from the Act.
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 93 from the Act. It further deletes the definition of Appellate Board, Bench, Chairman, Judicial Member, Member, tribunal, and Vice-Chairman from Section 2 (1) of the Act.
  • The ordinance amends the definition of “prescribed” from “prescribed by rules made under this Act” to “(i) in relation to proceedings before a High Court, prescribed by rules made by the High Court; and (ii) in other cases, prescribed by rules made under this Act.”
  • The ordinance substitutes the term “Tribunal” with “the Registrar or the High Court” and “Appellate Board” with “High Court” wherever they occur in the Act.
  • The ordinance has also carried out amendments identical to the above in the Geographical Indications of Goods (Registration and Protection) Act, 1999 to dismantle the IPAB and transfer the powers and functions to the High Court.

Copyright Act, 1957

  • Appellate Board established under the Copyright Act, 1957, which was empowered, among other things, to hear appeals against the orders of the Registrar of Copyrights has been dismantled and replaced with Commercial Courts, a division of High Courts. To do so, the ordinance has deleted provisions related to the Appellate Board including its definition under Section 2 (aa) of the Act.
  • It defines “Commercial Courts” under Section 2 (fa) of the Act as “Commercial Court, for the purposes of any State, means a Commercial Court constituted under section 3, or the Commercial Division of a High Court constituted under section 4 of the Commercial Courts Act, 2015”. The newly added definition gives “Commercial Courts” the same meaning as it has under Section 4 of the Commercial Courts Act, 2015.
  • It has replaced the term Appellate Board with “Commercial Courts” wherever they occur in the Act, except for Section 50 of the Act in which the term “Appellate Board” has been replaced with “High Court”.
  • The power of the Appellate Board to hear appeals against the orders of the Registrar of Copyrights will now be vested with a Single Judge of the High Court. The Single Judge has also been empowered to refer the case to a larger bench if the Judge deems fit.
  • Since the amendment mandates that any proceeding before the High Court or the Commercial Division of the High Court including proceeding under section 31D of the Act for fixation of royalties shall be as per the rules prescribed by the High Court which in this case shall be Commercial Courts Act, 2015.
  • Since section 14 of the Commercial Courts Act mandates expeditious disposal of appeals, we can expect better management of the backlog of Copyright related commercial disputes in the near future.

Cinematograph Act, 1952

  • The ordinance has abolished the Appellate Tribunal formed under the Cinematograph Act, 1952 by deleting Section 2(h) of the Act.
  • It replaces the term ‘Appellate Tribunal’ under Section 7C of the Act with ‘High Court’. Hence, the power of the Tribunal which was empowered to hear appeals against decisions of the Censor Board has been transferred to the concerned High Court. As a result, such appeals shall now be filed directly before the concerned High Court.

Protection of Plant Varieties and Farmers’ Rights Act, 2001

  • The Plant Varieties Protection Appellate Tribunal formed under Section 54 of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 has been dismantled.
  • The ordinance has removed the provisions related to the Tribunal including the definition of Chairman, Member, Judicial Member, establishment (Section 54), composition (Section 55), the procedure of the Tribunal.
  • The term “Tribunal” has been substituted with “High Court” wherever they appear in the Act.
  • As a result, the power of the Tribunal which was empowered to hear appeals against decisions of the Registrar of Plant Varieties Registry and Protection of Plant Varieties and Farmers’ Rights Authority has been transferred to the concerned High Court.
  • Now all such appeals shall be filed directly before the concerned High Court, and any pending cases shall be transferred to the concerned High Court.

Patents Act, 1970

  • The Appellate Board formed under Section 116 of the Patents Act, 1970 which was vested with the power to hear appeals under Section 117A of the Act against orders of the Controller General of Patents, Designs and Trade Marks (“CGPDTM”) or the Central government has been abolished.
  • Much like the above amendments, the ordinance omits provisions related to the Appellate Board such as establishment (Section 116) and composition of the Board (Section 117), Procedure and Powers (Section 117B and 117D).
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 117C from the Act.
  • Prior to the amendment both the High Court and Appellate Board were supposed to function simultaneously, however, now Appellate Board has been omitted from all of those places. Further, wherever only the Appellate Board appeared, it has been substituted with the High Court.

Apart from the amendments to the statutes specified above, a transitional provision has been made to compensate outgoing tribunal members for the premature termination of term and reversion of officers on deputation to parent cadre, Ministry or Department. In addition, any appeal, application or proceeding pending before the Tribunal, Appellate Tribunal or other authorities, other than those pending before the Authority for Advance Rulings under the Income-tax Act, 1961, shall stand transferred to the Court before which it would lie as per the ordinance, and the Court may proceed to deal with such cases from the stage at which it stood before such transfer, or from any earlier stage, or de novo, as the Court may deem fit. Moreover, the balance of all monies received by the abolished authorities and not spent by it as well as properties owned by it shall stand transferred to the Central Government.

CONCLUSION

Few may consider it as a notable change in IP dispute resoltion, others including the Group of Industry Associations on Intellectual Property have opined their dissatisfaction regarding the move. Nevertheless, since the Appellate Boards were formed to fast-track the backlog of cases, and they failed to meet the desired objective, it appears to be a prudent move by the Government. It should be however kept in mind that since the Indian Judiciary is infamous for backlog of cases, mere abolishment of the Appellate Tribunal will be futile unless the special commercial courts/benches are equipped to handle these cases. The substitution of the Appellate Board with the High Courts and Commercial Courts in relation to Copyright disputes also means the cost of instituting the proceedings before the respective judicial bodies will be decided in accordance with the Code of Civil Procedure, 1908 and the Commercial Courts Act, 2015.

The abolition of the Appellate Board poses another problem with respect to the royalty rates that are due to be revisited by the end of this year. The ordinance may have further complicated the entire procedure under Section 31D of the Copyright Act. This means any procedure prescribed under the Copyright Rules, 2013 in relation to the above proceeding gets nullified and we can expect the Central Government to exercise its power under Section 21A of the Commercial Courts Act, 2015 to frame rules akin to Rule 31 of the Copyright Rules, 2013.

The content of this Article does not necessarily reflect the views / position of Fox Mandal but remain solely those of the authors.

“Read about the changes introduced through the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021.”

Image Credits: Photo by freestocks on Unsplash

POST A COMMENT