Alaska Airlines loses appeal in $160 million UK trademark dispute with Virgin Aviation

LONDON (Reuters) – Alaska Airlines on Tuesday lost an appeal in a roughly $160 million trademark case with Virgin Group, after a London court ruled last year that Virgin was entitled to royalties even if the American airline no longer uses the Virgin brand.

Virgin units, Virgin Aviation TM Ltd and Virgin Enterprises Ltd, successfully argued that Alaska was required to pay a “minimum royalty” of approximately $8 million each year until 2039.

It said a 2014 brand licensing agreement between Virgin and Virgin America Inc, acquired by Alaska’s parent company in 2016, required the annual payment even if Alaska stopped using its brand.

A judge at the High Court in London ruled last year that the minimum royalty was “a lump sum payable for the right to use the Virgin brand, whether or not that right is exercised”.

Alaska Airlines, which had argued that a deal requiring it to pay $8 million a year for brands it did not intend to use was “commercially absurd,” sought to overturn the decision .

But the Court of Appeal in London rejected his appeal on Tuesday, with Justice Stephen Phillips saying in a written ruling that Virgin’s interpretation of the deal was correct.

(Reporting by Sam Tobin; editing by William James)