The “Pe” Predicament: A Trademark Tussle in India’s Fintech Sector — PhonePe vs. BharatPe

Introduction: The High Cost of IPR Disputes for Startups and Investors

Intellectual Property Rights (IPR) disputes, especially around trademarks, can impose substantial direct and indirect costs on startups, companies, and investors alike. Beyond legal fees, these disputes often drain management attention, delay market strategies, and impact brand value—sometimes running into crores of rupees and years of lost opportunity.

The trademark dispute between two fintech giants — PhonePe and BharatPe — over the suffix “Pe” highlights these risks vividly. This case study illustrates why startups must prioritize early, strategic trademark management to safeguard their brand identity and business prospects.

Background: The Roots of the Dispute

• PhonePe, founded in 2015, quickly became a major UPI player with a brand name emphasizing mobile payments.
• BharatPe, launched in 2018, focused on merchant payments with a similarly styled name incorporating the “Pe” suffix.

PhonePe alleged that BharatPe’s use of the “Pe” suffix infringed its registered trademark, potentially causing consumer confusion and diluting its brand goodwill. BharatPe countered that “Pe” was descriptive, generic to the payments industry, and not monopolizable.

Key Legal Insights from the Case

1. Descriptive Elements Are Hard to Protect Exclusively: “Pe,” as a shorthand for “pay,” was ruled largely descriptive. Trademark law in India does not grant exclusivity over generic or descriptive terms without strong evidence of secondary meaning and distinctiveness, which is costly to prove.
   
2. Whole Mark vs. Part Mark Analysis (Anti-Dissection Rule): Courts emphasized viewing trademarks holistically. Despite sharing a suffix, “PhonePe” and “BharatPe” had distinct prefixes that helped differentiate the brands in consumers’ minds.
   
3. The Importance of Acquired Distinctiveness: While descriptive marks can gain exclusivity through long-term exclusive use, establishing this requires significant investment in marketing and legal battles, often making it a high-risk strategy.
4. Strategic Value of Early Trademark Registration: Registering a trademark provides significant legal advantages, including a presumption of ownership and the exclusive right to use the mark.
   
5. Continuous Monitoring and Enforcement: After registration, it’s vital to monitor the market for infringing uses and take timely action. 

Legal Battle & Cost Implications

• The dispute stretched across multiple courts (Delhi High Court, Bombay High Court), lasting nearly 5 years.
• Direct costs: Legal fees for prolonged litigation in India for such commercial trademark disputes can range from INR 50 lakhs to over INR 2 crores ($70,000–$270,000) depending on complexity and duration.
• Indirect costs: Loss of management focus, delayed marketing and product rollout, reputational uncertainty, and lost investor confidence can easily translate into crores in missed business opportunities.
• Market uncertainty during litigation often affects fundraising valuations and strategic partnerships.
  

Key Legal Points and Court Observations

• Courts emphasized the “anti-dissection” rule, requiring trademarks to be viewed holistically rather than by parts.
• The suffix “Pe” was held to be descriptive, representing “pay,” making exclusive rights difficult to enforce without clear evidence of secondary meaning.
• Courts declined interim injunctions against BharatPe, acknowledging the descriptive nature and distinctiveness of the respective marks in totality.
  

Resolution and Aftermath

• In May 2024, the companies settled amicably, withdrawing trademark oppositions and agreeing on coexistence terms.
• This resolution enabled both to refocus on business growth rather than costly litigation.
• However, the 5-year legal battle underscores the strategic drain and risks of unresolved IPR issues.
  

Broader Lessons for Startups, Companies, and Investors

1. Trademark disputes can be expensive, time-consuming, and deeply distracting—often costing startups crores in legal fees and years in resolution. Beyond the financial toll, they pull leadership away from core business priorities and may introduce reputational risk that affects investor confidence and deal terms.
   
2. Startups should prioritize selecting distinctive, non-descriptive brand names from the outset—terms that are unique, not generic or commonly used (like “Pe” for pay)—to ensure stronger legal protection and easier enforcement.
   
3. Conducting a thorough trademark search and clearance early in the branding process is not just best practice, but a strategic cost-saving move that reduces the chance of future conflict.
   
4. Securing trademark registration strengthens legal rights, adds credibility with stakeholders, and improves leverage in any dispute or negotiation.
   
5. Active monitoring and timely action are key to preserving brand value. And when disputes do arise, founders should stay open to practical resolutions like coexistence agreements can often save more value than drawn-out litigation.

Conclusion: Proactive IPR Management is a Business Imperative

The PhonePe vs. BharatPe trademark saga is a cautionary tale for startups, companies, and investors in fast-evolving sectors like fintech. It underscores that:

• Selecting strong, distinctive trademarks early on,
• Conducting comprehensive searches,
• Registering marks strategically and
• Monitoring market use continuously

are essential steps to avoid costly, prolonged disputes that threaten brand equity and business momentum.

How Treelife Helps You Avoid Costly IPR Battles

At Treelife, we understand that intellectual property is not just a legal formality — it’s a strategic business asset. Our end-to-end trademark services include:

• Comprehensive clearance and risk assessment to prevent costly conflicts before you launch.
• Robust registration strategies aligned with your business goals and market presence.
• Ongoing monitoring and enforcement to safeguard your brand equity from infringement.
• Dispute resolution support to navigate negotiations, settlements, or litigation efficiently.
  

Our expertise helps startups, established companies, and investors protect their brands and avoid costly, resource-draining trademark battles like PhonePe vs. BharatPe. Don’t let avoidable trademark issues cost you crores and years of growth. 

Contact Treelife today to safeguard your brand and build investor confidence.