Virgin Aviation Ltd v Alaska Airlines Inc. [2023] EWHC 322 (Comm)
The Commercial Court handed down judgment on Thursday in favour of the Claimants, two entities in the Virgin group, in proceedings concerning a trade mark license agreement (TMLA) between the parties.
Under the TMLA, Virgin had licensed to another entity, Virgin America Inc., the right to use the Virgin brand in connection with the operation of an airline in the United States. Subsequently, Virgin America was acquired and merged with Alaska Airlines Inc., and Alaska assumed all of Virgin America’s rights and obligations under the TMLA. Alaska later determined to cease using the Virgin brand.
A dispute subsequently arose as to whether the TMLA required Alaska to continue making the payment of the Minimum Royalty for the duration of the TMLA. Virgin contended that the Minimum Royalty was due irrespective of whether Alaska chose to continue using the brand. Alaska argued that the obligation to pay was only engaged if there had been some usage of the brand. A subsidiary dispute arose as to whether or not the TMLA permitted Alaska to cease using the brand entirely.
Christopher Hancock KC sitting as a deputy High Court judge held that Virgin’s case succeeded on both fronts: on a true construction of the TMLA, the Minimum Royalty remained payable even if Alaska elected to cease using the brand. Moreover, Alaska was under an obligation to continue using the brand to at least some extent in any event.
Daniel Toledano KC and Joshua Crow, instructed by Slaughter and May, acted for Virgin.
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