It’s PAYTM Vs PAYPAL - The legal battle for owning the Trademark – Read if you want to register trademark soon

1.0 Introduction

On 09 November 2016, our honorable Prime Minister Shri Narendra Modi took the bold decision of demonetization against corruption and black money. A direct consequence of the move resulted into tremendous increase in electronic transactions.

As said, when the entire country was facing the heat of the decision, there was only one company which was making billions out of it and that was Paytm. Since the cash was not easily available, people were looking for alternative options and the best and the easiest was the online cash wallets. So indirectly, we were all using Paytm or similar wallets.

2.0 Paytm – A journey from Corporate to Households

Thereafter, Paytm became a household need or we can say a household brand. Today, anyone who is using a smartphone, uses the Paytm as well. From an Uber driver to a college student everyone was using this online cash wallet and as a result online application (Paytm) started growing so much among the common man that it jumped from 2.5 million transactions to 7 million transactions a day!

3.0 How PayPal objected the ownership of Paytm logo

However, this growth of Paytm not only added a great value to the company but also grabbed attention of the competitors. This is when PayPal, the biggest payment gateway solution all over the world, opposed Paytm for trademark infringement.

PayPal stated that there is a deceptive similarity between their logo and of Paytm.

The Important Point – The Legal Case

Now, here we want all the readers to pay close attention to this article, as we are now discussing something which may impact all of us. It is of utmost importance. The subject matter of this article is about two business giants fighting each other over their brand names and why not? Brand is the face of a company after all.

When we go to buy a product at a store like shampoo, clothes, medicines do we look at the company’s name or the brand name? Of course, the brand name.

For example, we all eat Kwality wall’s ice cream but are we aware that it is owned by Hindustan Unilever Limited? No, because it doesn’t matter at all.

Now, let us come back to our main discussion the legal battle of PayPal vs. Paytm over the Trademark objection. PayPal is an American company operating payments online. It was founded in 1998 way before Paytm came into the picture. Yet Paytm is a household name in India where PayPal is not. You won’t find a street vendor using PayPal but it will not be a surprise for anyone if he is using Paytm.

The case started on 18th November 2016 when PayPal inc. filed an objection against Paytm for using the logo similar to them. For past couple of years Paytm and PayPal were coexisting in the same market. It is only after the popularity of Paytm that PayPal filed an objection stating that- Paytm has copied the name as well as the logo of PayPal.

Both the brands start with word ‘pay’ and both are related to online payments and transactions. Secondly, the logo of both the companies is made of same color combination. In a glance, anyone can get confused between the 2 logos.

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The war between the two giants is still going on and it will take a couple of years more to conclude. As both, the companies are massive and do not want to lose, hence, neither of them will give up so easily.

Learning from the above case

While the fight is still going on let us learn something out of it. Let's learn how not to make any mistake which will result in infringement because it will indirectly cost you both the time and the money.

Below are some do’s and don’ts for start-ups and entrepreneurs.

#Learning No.1 – Trademark Search is a Must

Imagine you start a new business with a dynamic new name. You have applied for trademark registration in India and everything is going smooth, you have started making profit when all of a sudden you get a legal notice from a company as big as YAHOO.

This is what happened with Akash Arora one day. He had started a new business of internet services which were similar to that of yahoo. The mistake he made was using the name yahooIndia for his services. Yahoo sued Akash Arora and ultimately won.

Take the above case Seriously

Now in the above-discussed case of Paytm and PayPal, both the companies have the same 1st-word PAY and both fall in the same category of online wallets. Here PayPal can easily make a case of Paytm copying their first word. As it is only in the last year that Paytm gained popularity earlier anyone could have been deceived between the two names.

It is only because Paytm has become so successful that they are able to fight against an international company. It is not the same for the rest of us. Do you think we even stand a chance against them?

Hence that is why everyone will tell you to do name search before applying. Better late than sorry. Investing a little more time now can save you a lot of trouble in the future.

Also Read: How to do a Trademark Search in India

#Learning No.2 - Get your brand or word mark registered

Any individual or company planning to use a brand name at present or in future is advised to register their name now. As more and more companies growing and entering the market every day, competition is increasing. In this traffic of brands and logos, it is best to register you brand name at once to have a identity in the ever increasing crowd of brand, logo and businesses.

Would you like not being able to take any action for someone copying your name?

This is because if you don’t register your brand name you cannot take any legal action claiming the trademark in the court of law. So as to protect yourself and your brand name it is necessary to register it.

Again I will take the example to Paytm case. In this case, the strong argument that Paytm can use is that Paytm applied for trademark registration on 18 July 2016 and after application 4 months time period is given by law for other companies to raise objections. That four-month window expired in 18 November 2016 for PayPal.

This is the reason it is always best to register the trademark before entering the competition and facing any problem later.

4.0 Conclusion

As someone said ‘with great power comes great responsibility’ therefore it is important for entrepreneurs and startups to realize the need of protecting their brand names.