A London court has upheld a ruling requiring Alaska Airlines to pay millions in licensing fees to Virgin Group.
Alaska Airlines on Tuesday lost an appeal to halt the $160 million in fees it owes to Virgin even though the Virgin America brand disappeared years ago.
It relates to a 2014 trademark licence contract between Virgin and Virgin America.
Alaska’s parent company acquired Virgin America two years later.
Under the contract, which the appeals court ruled is valid, Alaska is on the hook to pay around $8 million in ‘minimum royalty’ payment annually until the contract expires in 2039.
This is binding even if the Virgin America name is not used.
The initial ruling stated it was a binding ‘flat fee payable for the right to use the Virgin brand, whether or not that right is taken up.’
The Court of Appeal in London found Virgin’s interpretation of the contract correct.
Alaska Air calls it ‘commercially nonsensical.’
