Airlines
Virgin Wins $160 Million Alaska Airlines Trademark Lawsuit
On Thursday, a judge in London ruled that Virgin Group is entitled to royalties even though Alaska Airlines Inc. no longer uses the Virgin brand, and the company won the trademark dispute for almost $160 million.
Alaska is obligated to pay a yearly “minimum royalty” payment of almost $8 million, according to Virgin entities Virgin Aviation TM Ltd and Virgin Enterprises Ltd. In a written decision issued on Thursday, Judge Christopher Hancock stated that the minimal royalty was “a flat fee payable for the right to use the Virgin brand, whether or not that right is taken up.”
Virgin’s acquisition of Alaska included “a branding agreement running until 2039 with clear commitments,” a company representative said, adding, “We are glad the court agreed with our arguments.”
According to a representative for Alaska, the case “lacks merit, and we intend to appeal the decision.”Before Alaska Air Group Inc. completed its $2.6 billion acquisition of Virgin America, Virgin gave a trademark licence to Virgin America to use its brand in connection with the running of a domestic U.S. airline.
In 2018, Alaska’s operations were integrated with those of Virgin America, and the Virgin name was dropped the following year. In October, Virgin informed the London High Court that Alaska is required to make the yearly payment as Virgin America Inc.’s legal heir.
Alaska’s attorneys said that it was “commercially nonsensical” to be bound by a contract that would cost it $8 million year for trademarks it does not intend to use. Hancock, however, found that the agreement indicated that “Virgin America should pay a continuing minimum charge for the right to re-use the Virgin brand, whether or not they choose to do so.” According to the judge, the conditions of the contract “must be examined from the standpoint of Virgin and Virgin America… instead of from Alaska’s viewpoint.
