Bombay high court restrains former Kidzee franchisee from using mark "KIDGEE", holds post-termination trademark dispute arbitrable under section 9

Bombay High Court issues injunction against former Kidzee franchisee for using "KIDGEE" mark; declares post-termination trademark dispute arbitrable under Section 9.

Case Title: Zee Learn Ltd. v. Beauty Singh

Citation: (2026) ibclaw.in 4899 HC

Coram: Justice Amit Borkar

The Bombay High Court has restrained a former franchisee of the "KIDZEE" preschool brand from using the mark "KIDGEE" or any other deceptively similar name, holding that a dispute concerning continued use of a franchisor's mark after termination of a Franchise Agreement is arbitrable, since it arises from the contractual relationship between identified parties and does not require adjudication of rights in rem.

Zee Learn Ltd., the owner of the "KIDZEE" trademark, had granted the Respondent a franchise in 2014 to operate a Kidzee Centre in Koderma, Jharkhand, for six years. The Franchise Agreement expired in January 2020. The Petitioner alleged that the Respondent continued operating the school thereafter under the name "KIDGEE", which it claimed was deceptively and phonetically similar to "KIDZEE", and filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking an injunction, disclosure of financial records, a bank guarantee, and appointment of a Court Receiver.

The Respondent contended that she had stopped using "KIDZEE" after the franchise expired and had obtained permission from the Jharkhand Education Department to run the school under the name "KIDGEE School" through a separate foundation, along with a UDISE registration. She argued that the word "KID" was generic and that the dispute concerned an independent statutory trademark right which fell outside the scope of the arbitration clause.

Relying on Clause 14.4 of the Franchise Agreement, which barred the franchisee from claiming association with the franchisor "in any manner" after termination, the Petitioner argued that the adoption of "KIDGEE" immediately after termination, for the same educational activity in the same locality, was intended to retain the impression of continuing association with "KIDZEE".

The Court held that the dispute did not require any declaration binding the world at large regarding ownership of the mark, and was therefore not a proceeding in rem, relying on its earlier decision in EuroKids International Pvt. Ltd. v. Bhaskar Vidhyapeeth Shikshan Sanstha. Referring to the Supreme Court's decision in K. Mangayarkarasi v. N.J. Sundaresan, the Court reiterated that disputes arising from subordinate rights such as licences granted by a trademark proprietor remain arbitrable, even where they involve use of a trademark, since they concern rights and obligations inter se the contracting parties. The wide language of the arbitration clause, covering disputes arising out of or in connection with the Agreement, was held to cover the dispute regarding "KIDGEE" as well.

On merits, applying the test of overall phonetic and visual similarity from Encore Electronics Ltd. v. Anchor Electronics and Electricals Pvt. Ltd. and the protection of business goodwill recognised in Laxmikant V. Patel v. Chetanbhai Shah, the Court held that the admitted six-year franchise relationship, continuation of the same educational activity, and close phonetic resemblance between "KIDZEE" and "KIDGEE" made out a strong prima facie case that the Respondent's use of "KIDGEE" was likely to convey continuing association with the Petitioner. The Court held that Government permission or a UDISE Code obtained for regulatory purposes did not answer the separate contractual obligation owed to the Petitioner under Clause 14.4.

The Court restrained the Respondent from using "KIDZEE", "KIDGEE" or any deceptively similar mark suggesting association with the Petitioner, and directed her to remove such marks from the school premises and promotional material. However, it declined to direct furnishing of a bank guarantee or appointment of a Court Receiver at this stage, holding that preservation and disclosure of financial records, which the Court directed by way of affidavit, would sufficiently protect the Petitioner's monetary claim pending arbitration.