LONDON – A British judge ruled in favor of Richard Branson’s Virgin group on Thursday in its lawsuit against a U.S. train company that terminated a licensing agreement and claimed the Virgin brand was no longer one of “high repute.”
Judge Mark Pelling ruled in favor of Virgin Enterprises, which had sued Florida passenger train operator Brightline Holdings for breaching an agreement to rebrand as Virgin Trains USA. Brightline said it was disappointed with the ruling and planned to appeal.
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The lawsuit was over a deal the two companies struck in 2018 and Brightline pulled out of two years later. It came shortly after the Virgin Atlantic airline filed for bankruptcy protection in the U.S. and Virgin lost the U.K. train franchise it had held for two decades.
Brightline argued that Virgin had “ceased to constitute a brand of international high repute, largely because of matters related to the pandemic.” Virgin Atlantic fought financial support from the British government after COVID-19 grounded travel.
Virgin sued at the High Court in London, calling Brightline’s allegations “cynical and spurious.”
Issuing judgment after a hearing in July, Pelling said that Brightline had to prove that continuing to use the Virgin label “would cause material damage to Brightline’s reputation or the value of its business. In my judgment it has plainly failed to do so.”
The judge said there was “no evidence” Brightline's “standing with consumers was damaged by its continued association with Virgin.”
The issue of damages will be settled at a later hearing. Virgin sought about 200 million pounds ($246 million) in damages in the case.
In response to the ruling, the company said in a statement that “the Virgin brand has been a symbol of global innovation, exceptional customer experience and entrepreneurship for more than 50 years. Today’s court judgment demonstrates the strength of our business and brand.”
Brightline, owned by Fortress Investment Group, began running trains between Miami and West Palm Beach in 2018, the first private intercity passenger service to begin U.S. operations in a century. It started Miami-to-Orlando services last month.