Paytm is an Indian e-commerce platform primarily dealing with digital payments. In 2016, PayPal, an US-based international digital payment company accused Paytm of trademark infringement. PayPal issued a Notice of Opposition in Paytm’s trademark registration application under Class 38. With its presence in over 190 countries and having the competency to transact in over 100 currencies, PayPal has become one of the world’s largest online payment services.
After demonetization was implemented in India, there was a massive amount of increase in subscribers of Paytm. Paytm had 300 million registered users by August 2018. This figure compares with 520 million Alipay users and 237 million PayPal users around the same time. On average, one in five Indians had already started useing Paytm.
Paytm filed its application for trademark in 2012. However, it was advertised in the Trademark Journal (No. 1754) on July 18, 2016 only. Section 21 of the Trademark Act, 1999, enables any person to oppose a trademark by filing Form TM-5 within 3 months of the advertisement of such mark in the TM Journal, with a maximum extension of another month. PayPal filed its Notice of Opposition on November 18, 2016, with the Indian trademark office.
Contentions of PayPal (Plaintiff)
PayPal alleged that Paytm’s logo was “deceptively and confusingly similar” to its own. PayPal alleged that Paytm had “adopted the two-tone blue colour scheme” of its registered trademark logo. Also, the two brands start with the word “Pay” and has same nature of business existing in the same market, thus confusing consumers at a glance.
According to PayPal, Paytm has violated the following provisions:
- Section 9(2)(a) of the Trademarks Act, 1999, provides deception or confusion as an absolute ground for refusal of a trademark registration,
- Section 11 of the Act provides for similarity with an ‘earlier trademark’ as relative ground for refusal of a trademark registration,
- Section 11(2) states that usage of the similar trademark would be inimical to the distinctive character of its trademark, and
- Section 11(3) as it would amount to passing off.
- Paytm is precluded from relying on Section 11(4) of the Act which allows the applicant to seek the consent of the earlier trademark holder.
- Section 11(10) as there is an element of bad faith involved.
- Section 18 as it disallows the registrar from registering trademarks where there is no honesty involved, with the original proprietor being the owner of the trademark.
On the contrary, Paytm has declined to comment on the allegations.
Analysis
It is not appropriate for PayPal to claim exclusivity over a generic word like “Pay”. Delhi Hing Court has decided in a case that generic word like “Today” cannot be claimed to be exclusive by any of the news company groups.[1]
In India, the trademark law protects colors to the extent the colors or combination of colors confer a distinctive characteristic upon a product or service. Schedule 10 of the Trademarks Act deals with use of colors:
- A trademark may be limited wholly or in part to any combination of colors and any such limitation shall be taken into consideration by the tribunal having to decide on the distinctive character of the trademark.
- As far as a trademark is registered without limitation of color, it shall be deemed to be registered for all colors.
Here, the two-tone blue color in question, is not identical but they are similar.
Then, it has to be considered whether the whole package – name, font, and colors – used by Paytm and PayPal are similar enough for consumers, with average mind in India, to be misled into buying or choosing the other product.
As a matter of fact, ordinary consumers like fruit or vegetable vendors, taxi drivers, regular workers, small hotel owners, use and hear the word “Paytm” every day of their life, and they may not even know about the existence of PayPal. PayPal’s existence in the Indian market is limited generally to eBay shoppers, freelancers and IT software developers that are exposed to global economy much more than the ordinary consumers, which implies that if PayPal and/or Paytm were to conduct a survey, it would likely result strongly in favor of Paytm.
Order of the TM Registrar
The opponent, i.e., PayPal has withdrawn their opposition to the registration of Paytm’s trademark via a letter dated 25.06.2021. The order of the TM Registrar dated 12.07.2022, states that since PayPal withdrew their opposition, Paytm was successful in registering its trademark under class 38 in India.
Author: P.I. Shivamirthika.
Reference:
Mugdha variyar ‘Shades of brand envy in Paypal’s row with Paytm’ Economic Times (2016) available at https://economictimes.indiatimes.com/small-biz/startups/shades-of-brand-envy-in-paypals-row-with-paytm/articleshow/56057299.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Priyanka Pani, ‘Paytm has copied our logo: PayPal’ (2018) available at https://www.thehindubusinessline.com/info-tech/paytm-has-copied-our-logo-paypal/article64325546.ece
‘PayPal and Paytm Trademark Dispute’ (2016) Banana IP Counsels available at https://www.bananaip.com/ip-news-center/paypal-paytm-trademark-dispute/
Vasundhara Majithia, “The PayMark Battle: Whose Blue is it Anyway?” 2017 available at https://spicyip.com/2017/01/the-paymark-battle-whose-blue-is-it-anyway.html
Rahul Vijh, “PayPal Accuses Paytm of Trademark Infringement in India” (2017) available at https://www.ipwatchdog.com/2017/01/02/paypal-accuses-paytm-trademark-infringement-india/id=75995/
Samden Sherpa, “PayPal VS Paytm: Find Out What the Dispute is All About” (2016) avaible at- https://www.gizbot.com/apps/news/paypal-vs-paytm-find-what-the-dispute-is-all-about-036920.html
Arvind Panagariya, “Digital Revolution, Financial Infrastructure and Entrepreneurship: The Case of India” (November 18, 2019), SIPA’s Entrepreneurship & Policy Initiative Working Paper Series, 2019 available at http://dx.doi.org/10.2139/ssrn.3493341
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[1] Living Media India Ltd. & Anr. vs Alpha Dealcom Pvt. Ltd. & Ors.
