Walmart-backed PhonePe has withdrawn its appeal challenging an order passed by the Delhi High Court in April where a single-judge bench had rejected its plea to issue an injunction order against Sequoia-backed BharatPe for using the suffix ‘Pe’.
According to a PhonePe spokesperson, the company has not withdrawn its original commercial lawsuit against BharatPe which was filed in 2019 where it accused the latter of trademark violations.
PhonePe has only withdrawn its appeal filed in May with a division bench of the Delhi High Court against the single-judge bench’s order, in which the company was seeking an injunction against BharatPe to stop it from using the ‘Pe’ suffix while the commercial lawsuit gets heard in court.
The PhonePe spokesperson said that the hearing on the commercial lawsuit will take place in July.
According to the order passed by the division bench of Justices Manmohan and Navin Chawla on June 1, PhonePe’s lawyers informed the court that they did not wish to press the appeal.
The judges said that the court “has not examined the present appeal on merits” and “the controversy that may arise in future between the appellant [PhonePe] and the third parties shall be decided in accordance with law and facts of that case”.
“We further direct that none of the parties shall unnecessarily take an adjournment in the proceedings before the learned Single Judge,” the division bench said in the order.
PhonePe’s spokesperson said that the division bench agreed that the matter requires detailed examination on merits, which can only happen during the trial.
“We had filed for an injunction almost two years ago to get temporary reprieve until the main trial started,” the PhonePe spokesperson said. “Given that the injunction ruling took two years to come, it had partially lost its meaning in time anyways because BharatPe continues to actively plagiarize our mark ‘Pe’. Our main recourse was always going to be decided in trial,” the spokesperson added.
“For two years, PhonePe tried to pursuade the court to restrain the use of BharatPe trade mark, but failed miserably. In fact, they ignored the court’s observation on day 1 that this was nothing but a luxury litigation filed by PhonePe. After failing to convince the Ld. Single Judge, PhonePe filed the appeal as a desperate measure, but again drew serious flak from the court for filing an ill-conceived action. Finally, they had to withdraw as they couldn’t risk another adverse ruling. In this background, PhonePe’s claims of BharatPe plagiarizing their mark are misconceived,” a BharatPe spokesperson told Entrackr when we reached out to them for comment on PhonePe’s remarks.
In its statement, PhonePe also ruled out reaching out to BharatPe for any settlement.
“This was never a case on merit – it was flexing of muscles by Chinese Tencent and American Walmart backed, PhonePe, against homegrown BharatPe,” Ashneer Grover, founder and CEO of BharatPe said in a statement. “It would have been a travesty of justice if foreign-owned PhonePe would have been allowed to monopolize [the] Hindi word ‘Pe’”.
In 2019, PhonePe had filed a commercial lawsuit against BharatPe alleging trademark violations and exclusivity over ‘Pe’ at the Delhi High Court. The lawsuit also sought an injunction restraining infringement of trademark, passing off, and damages from BharatPe, essentially accusing the company of illegal usage of ‘Pe’ as a suffix in its app in English as well as in Hindi.
In April 2021, the Delhi High Court refused to issue the injunction to PhonePe.
According to the court’s order issued on April 15, a single-judge bench of Justice C Hari Shankar had held that the evidence presented in the case was insufficient to come to a definitive conclusion that the ‘Pe’ suffix is indelibly associated with PhonePe’s services.
Update: We have updated the story with a statement from BharatPe.