Virgin Group has won a USD160 million trademark case against Alaska Airlines (AS, Seattle Tacoma International) in a London High Court, which ruled that the trademark license agreement remained valid even though the US carrier stopped using the brand.
In a ruling handed down remotely on February 16, 2023, England and Wales High Court (Commercial Court) Judge Christopher Hancock found that according to the contract entered into on November 19, 2014, between Virgin Aviation Limited and Virgin Enterprises Limited and Alaska Airlines (formerly Virgin America) the minimum royalty was "a flat fee payable for the right to use the Virgin brand, whether or not that right is taken up". The claimants argued that Alaska Airlines was contractually bound to pay USD8 million "minimum royalty" every year until 2039, irrespective of the use of the brand.
According to the written ruling, Judge Hancock said he had essentially considered three issues:
- Whether Alaska Airlines was obliged to pay the minimum royalty even though it did not use the names or trademarks;
- If the royalty obligations could be modified pro-rata;
- Was it a breach of contract if Alaska Airlines stopped all use of the names or trademark.
Virgin granted the trademark licence to Virgin America in the USA before Alaska Air Group completed its USD2.6 billion acquisition of Virgin America. Alaska Airlines merged its operations with Virgin America in 2018 and stopped using the Virgin brand in 2019.
Reuters reports that Virgin welcomed the court's ruling. "We are pleased the court agreed with our arguments," a spokesperson said.
A spokesperson for Alaska Airlines said the case was "without merit, and we intend to appeal the decision".
