Richard Branson’s Virgin Group has prevailed in a multi-million-dollar lawsuit it brought against Alaska Airlines in London’s High Court over claims the Seattle-based carrier owed $160 million in royalties for the Virgin America brand even though the airline has been shuttered.
The Virgin Group, which licensed out the Virgin America brand, successfully argued that Alaska Airlines was legally obliged to keep paying an $8 million annual royalty payment for the next 16 years even though Virgin America no longer exists.
Alaska Airlines acquired Virgin America in 2014, and at the time, the airline reached a trademark use agreement with the Virgin Group which detailed the bumper royalty payments.
Two years later, however, Alaska Airlines decided to retire the Virgin America brand. Lawyers acting on behalf of Alaska Airlines failed to convince the judge that the airline was no longer liable for the royalty payments because it had promised never to use the Virgin America brand again.
The years-long legal dispute has dragged on since 2019 when Alaska Airlines finally stopped using the Virgin American brand and then swiftly stopped its royalty payments to the Virgin Group.
The High Court judge, however, sided with Virgin and made it clear that Alaska Airlines was liable to keep on paying royalties. In his summing up, Judge Christopher Hancock said the contract made it clear that the royalty payment was required whether or not the Virgin America brand was actually in use.
Alaska Airlines has slammed the ruling as “without merit” and has said it will appeal the decision.
The carrier purchased Virgin America to get a better foothold in the Californian airline market but the acquisition and assimilation of Virgin America has been beset with difficulties.
Shouldn’t this be in American courts?