The Commercial Court handed down judgment on Thursday in favour of the Claimant, an entity in the Virgin group of companies, in proceedings concerning a trade mark licence agreement (TMLA) between the parties.
VEL is principally engaged in the management, protection and development of the Virgin brand. Brightline is a US train operator which operates a train line in Florida, between Miami and Orlando.
Under the TMLA, VEL agreed to license the Virgin brand and the Virgin marks to Brightline such that Brightline would rebrand its rail services in the USA as “Virgin Trains USA”. The licence was for an initial 20-year term.
Very soon after concluding the TMLA, at the height of the first wave of the Covid-19 global pandemic, Brightline sought to terminate the TMLA on the basis of an allegation that the Virgin brand had ceased to be a brand of international high repute, that the marks had ceased to be of high quality status, and that continued use of the marks would cause material damage to its reputation or the value of its business.
Had Brightline been able to establish these matters, then it would have been entitled to terminate the TMLA in accordance with its terms.
Following a 3-week trial in July 2023, HHJ Mark Pelling KC, sitting as a judge of the Commercial Court, held that “Brightline has failed to prove any of the … issues it had to prove”. In particular, it had failed to establish that “the brand had ceased to be a brand of international high repute”, or that the marks had ceased to be of high-quality status, or that continued use of the marks would cause material damage to Brightline.
It followed that Brightline was not entitled to terminate the TMLA and that, by purporting to terminate the TMLA, in circumstances where it was not entitled to do so, Brightline repudiated the TMLA.
Virgin’s claim for damages (in an amount of ca. US$115m) therefore succeeded.
VEL argues that it is entitled to an additional amount of damages and that part of the dispute will now be determined in the Commercial Court.
Daniel Toledano KC, Emma Himsworth KC and Maximilian Schlote, instructed by Herbert Smith Freehills, acted for VEL. You can view the judgment below.
View Judgment