LONDON (Reuters) – Alaska Airlines lost an appeal on Tuesday in a trademark dispute with Virgin Group worth about $160 million after a London court ruled last year that Virgin was entitled to royalties even though the U.S. carrier no longer uses the Virgin brand.
Virgin subsidiaries Virgin Aviation TM Ltd and Virgin Enterprises Ltd were able to convince the court with the argument that Alaska would have to pay a minimum license fee of about US$8 million annually until 2039.
It said a 2014 trademark licensing agreement between Virgin and Virgin America Inc. – which was acquired by Alaska’s parent company in 2016 – required the annual payment even if Alaska stopped using its trademark.
A judge at the High Court in London ruled last year that the minimum license fee was “a flat fee for the right to use the Virgin brand, whether or not that right is exercised.”
Alaska Airlines had argued that an agreement requiring the airline to pay $8 million a year for brands it did not intend to use was “commercially absurd.” The airline sought to overturn the ruling.
However, the Court of Appeal in London dismissed the appeal on Tuesday. Judge Stephen Phillips said in a written judgment that Virgin’s interpretation of the agreement was correct.
(Reporting by Sam Tobin; Editing by William James)
