India: PAYPAL Enters Into A Legal Battle With PayTm Over Trademark Rights

Last Updated: 9 August 2017
Article by United IPR

In today's era of demonetization in India Paytm has become a necessity rather than an option, but the brand has recently landed up in a controversy involving trademark issues. Paytm recently received approval from the Reserve Bank of India to launch its payments bank to make one's payment wallet stronger. Paytm is used by shopkeepers, vegetable vendors and other big and small business enterprises for receiving and sending payments. Paytm's demand witnessed exponential growth subsequent to the demonetization as people had minimum or no access to cash.

The immense growth witnessed by Paytm caught the attention of some global players, PayPal being one of them. PayPal has been in the market for over a decade with a global presence in over 190 countries and a capacity to execute more than 100 monetary forms. PayPal opposed the trademark application filed by Paytm in the year 2012.

Facts

PayPal has claimed the bicolor scheme used by Paytm to be similar to that of PayPal. Paytm further argued that PayPal intentionally damaged Paytm's reputation that immerged after demonetization in India and it also contended that PayPal's opposition was bound to be rejected as it came 4 years subsequent to the filing of Paytm. Paytm recorded its application in 2012, PayPal appears to have recorded its notice of opposition on November 18, 2016.

It can be inferred that PayPal cannot claim exclusivity over the generic term 'pay' and the burden of proof lies on PayPal to prove that it has acquired a secondary meaning exclusively to its use in India. Secondly, many companies use the term 'PAY' in their trademark or names since it is an expression of basic speech in India and many of e-wallet organizations use the term 'PAY' in their Trademarks.

Indian courts have regularly applied the doctrine of spillover reputation to allow foreign TM owners to protect their rights in India after SC decision in NR dongre v. Whirlpool (1996 PTC (16) 583 (SC)) and the SC also confirmed that a foreign proprietor is not required to show his goodwill in the Indian market to claim protection of a globally well-known mark. PayPal claimed the following points to its advantage i) having a presence in India since 2000 ii) using the light blue and medium blue device internationally since 2007. However, the application for light blue and medium blue device was filed internationally in 2014 but the same was filed by Paytm in 2012, which makes Paytm the prior applicant in India.

Paytm stands a reasonable opportunity to demonstrate that not only has it acquired goodwill during demonetization but many FinTech consumers have started using Paytm as a verb due to its services, the same can have the trademark lose its selectiveness and get to be Publici Juris. Due to Paytm's strong unique Identity, it is highly unlikely for any rational individual to correlate PayPal with Paytm's bicolor mark.

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