Richard Branson’s Virgin Group has won a US$250 million case against US train operator Brightline in London’s High Court after a dispute over the latter’s cancelled branding deal.
Brightline had pulled out of a deal to use Virgin’s branding in 2020, just 18 months after agreeing to do so.
Concerns Virgin’s brand image had been tarnished by media speculation that Branson’s airline, Virgin Atlantic, would require a government bailout during the pandemic had been cited by Brightline as it cancelled the deal.
Brightline had looked to argue that it was entitled to terminate the licensing agreement with Virgin, given it had supposedly “ceased to be a “brand of international high repute”.
However, Virgin hit back, arguing that its image had not been materially impacted by the negative press at the time, meaning Brightline would owe US$200 million as part of an exit fee.
“Although it was suggested by Brightline that its standing with consumers was damaged by its continued association with Virgin, there is no evidence that is so,” Judge Mark Pelling said on Thursday.
As a result, Pelling backed Virgin’s claim for the exit fee, with Branson’s firm also seeking millions extra in unpaid royalties.
The precise figure of damages owed is yet to be determined though.
“The Virgin brand has been a symbol of global innovation, exceptional customer experience and entrepreneurship for more than 50 years,” a Virgin spokesperson said.
“Today’s court judgement demonstrates the strength of our business and brand following Brightline’s attempts to breach a long-term licensing agreement.”