Virgin America

Feb 16, 2023

02/13 02/16/2023 | 01:12pm EST Message : *Required fields LONDON, Feb 16 (Reuters) - Virgin Group won itstrademark case against Alaska Airlines Inc for approximately$160 million on Thursday, with a judge in London ruling that itis entitled to royalties even though the U.S. airline no longeruses the Virgin brand. Virgin units Virgin Aviation TM Ltd and Virgin EnterprisesLtd argued Alaska is liable to pay a roughly $8 million “minimumroyalty” payment every year until 2039. It said a 2014 trademark licence agreement between Virginand Virgin America Inc, which was acquired by Alaska's parentcompany in 2016, required the annual payment even if Alaskastopped using its branding. Judge Christopher Hancock said in a written ruling onThursday that the minimum royalty was “a flat fee payable forthe right to use the Virgin brand, whether or not that right istaken up”. A spokesperson for Virgin said Alaska’s acquisition ofVirgin America included “a branding agreement lasting until 2039with clear obligations”, adding: “We are pleased the courtagreed with our arguments.” A spokesperson for Alaska said the case is “without meritand we intend to appeal the decision”. Virgin granted a trademark licence to Virgin America to useits brand in connection with the operation of a U.S. domesticairline before Alaska Air Group Inc. completed its $2.6 billionacquisition of Virgin America. Alaska merged its operations with Virgin America in 2018 andstopped using the Virgin brand the following year. Virgin told London’s High Court in October that Alaska, asthe legal successor to Virgin America Inc, is obliged to makethe annual payment. Alaska’s lawyers argued that an agreement requiring it topay $8 million a year for trademarks it has no intention ofusing was “commercially nonsensical”. However, Hancock ruled the agreement stated that “VirginAmerica should pay a continuing minimum fee for the right tore-use the Virgin brand, whether or not they chose to do so”. The judge added that the terms of the agreement “must beapproached from the perspective of Virgin and Virgin America ...and not from the perspective of Alaska”. (Editing by Mark Potter)