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restrains from using trademark after
Justice Amit Borkar partly allows Zee Learn's petition, holding that a former licensee cannot continue using a trademark after the licence is terminated.
The , on , restrained , which runs a school in Dehradun, from using the registered trademarks "" and "MLZS" and the proprietary MLZS Program, pending the outcome of arbitration between the parties. The Court rejected the trust's challenges to , the validity of the arbitration agreement, and its defence based on government textbook directives.
The Dispute
, which has operated the network since , had entered into a series of agreements with the trust starting in , including an Intellectual Property Agreement in and an Academic Alliance Agreement in . The trust was licensed to use Zee Learn's trademarks and implement the MLZS Program at its Dehradun school. After earlier defaults led to litigation, the parties entered into a Settlement Agreement in , reviving the original contracts.
However, in , Zee Learn alleged that the trust had committed fresh breaches, including failure to make payments and refusal to procure "Litera Gear" study materials. The trust, in turn, wrote to the claiming it was being forced to use the petitioner's books, without disclosing that those books included textbooks. After a notice of breach went uncured, Zee Learn terminated the agreements on . The trust continued to operate the school under the name.
Challenge Rejected
The trust argued that the lacked because the school was in Dehradun and no part of the arose in Mumbai. Relying on
and
, the Court held that the arbitration clause, which stated
"the place of arbitration shall be Mumbai,"
fixed the juridical seat of arbitration. The Court noted that the parties had already arbitrated an earlier dispute in Mumbai without objection.
Trademark Rights After Termination
The Court emphasised that once a licence is terminated, the licensee must stop using the trademark. Citing Clause 7.5 of the IP Agreement, which requires cessation of use within seven days of termination, the Court applied the principle from
and
:
"once the licence contract is terminated, any use of mark by the
of the mark would amount to
of the mark of the licensor and would deceive the public."
The Court rejected the trust's argument that the termination was invalid, clarifying that such disputes are for the arbitral tribunal to decide, but that did not entitle the trust to continue using the marks in the interim.
Textbook Defence Fails
The trust contended that government directives from the
requiring schools to use
/
textbooks made performance of the contract impossible. The Court noted that these directives existed before the agreements were signed and that
Rule 2.4.7 expressly permits schools to
"use supplementary material as per their requirement."
The Court found no material showing that the government prohibited supplementary educational materials.
Key Observations
"Upon any termination or expiration of this Agreement, the USER shall cease any and all use of the Intellectual Properties, including, but not limited to, removing the Intellectual Properties from the USER's websites, collateral and other promotional materials and documentation within 7 (seven) days."— Clause 7.5 of the IP Agreement"The judgments relied upon by the Petitioner support this position. In Velcro Industries B.V. , this Court considered the continued use of a mark by a former licensee. The Court found that such use could create an impression that the former licensee was 'still connected with or have a licence from the Plaintiffs'."
"I find that the Petitioner has established a strong case that after termination the Respondent has no contractual right to use the Petitioner's registered trademarks or to represent that its association with the Petitioner continues."
The Order
The Court directed the trust to: - Cease all use of the "" and "MLZS" marks and any names. - Stop implementing the MLZS Program. - Remove the marks from its website and promotional material within seven days. - Preserve all documents and electronic records relating to the use of the marks and program after termination. - Disclose the number of students enrolled for 2026-27 and fees received in connection with the program.
The Court rejected Zee Learn's prayers for a direction to the trust to continue procuring Litera Gear and paying alliance fees, as well as for a bank guarantee or appointment of a receiver, holding that such relief would effectively revive a terminated contract.
The matter is to proceed to arbitration in Mumbai, with the parties directed to commence proceedings within two months.
