The disagreement between Easyjet's founder Sir Stelios Haji-Ioannu and the airline has reached the High Court.
The case is likely to last until the end of next week. Lawyers for the entrepreneur yesterday claimed the carrier is "no longer a low-cost airline", because of additional charges customers are hit with, reports said.
The dispute centres on the airline's revenue sources, which Sir Stelios argues are outside the terms of a brand agreement, which requires Easyjet to receive 75% of its income from "core activities".
Sir Stelios contends that the airline has broken this deal by receiving more than 25% of its income from ancillary services, such as charging for baggage.
The two sides are now asking a judge to define "core activites".
Sir Stelios owns the Easyjet brand, and leases it to the low cost carrier for an annual fee of £1. He is also owns a 38% stake in the company.
The entrepreneur, who resigned from the airline's board last month, has long been opposed to Easyet's strategy of spending cash on new aircraft rather than on giving shareholders a dividend.
Sir Stelios is also planning to launch an online travel agency (OTA) to rival Expedia and Travelocity.
His aim is to use the easyJet brand name for the new enterprise which could force the low cost carrier to re-brand.
The airline has also considered re-branding if no agreement can be reached.
Sir Stelios runs other companies under the easyJet brand including easyJethotels and easyJetholidays.
Court documents lodged by Sir Stelios also refer to possible confusion between the various easyJet activities.
www.easyjet.com