LONDON – In a significant legal development, a British judge, Mark Pelling, has ruled in favor of Richard Branson’s Virgin group, following a lawsuit against Brightline Holdings, a U.S. train company. The lawsuit centered around the termination of a licensing agreement, with Brightline claiming that the Virgin brand no longer held its once esteemed reputation.
Virgin Enterprises, the plaintiff, had accused Brightline of breaching a 2018 agreement to rebrand as Virgin Trains USA. Expressing disappointment with the ruling, Brightline has announced its intention to appeal the decision.
The legal battle stemmed from a deal struck between the two companies, which Brightline withdrew from two years later. This move coincided with the Virgin Atlantic airline filing for bankruptcy protection in the United States, and the loss of the U.K. train franchise that Virgin had previously held for two decades.
Brightline’s defense rested on the argument that Virgin had lost its international prestige, primarily due to the adverse impacts of the pandemic. Virgin Atlantic, facing financial hardships due to grounded travel amidst COVID-19, had declined financial support from the British government.
Virgin, however, vehemently rejected these claims made by Brightline, dismissing them as “cynical and spurious.” The lawsuit reached the High Court in London, where Pelling presided over the case. After conducting a hearing in July, the judge delivered his verdict, stating that Brightline had failed to demonstrate that continued use of the Virgin label would materially harm its reputation or business value.
Pelling emphasized that there was “no evidence” to suggest that Brightline’s association with Virgin had damaged its standing with consumers. The court will address the issue of damages in a subsequent hearing. Virgin sought approximately 200 million pounds ($246 million) in damages.
In response to the ruling, Virgin released a statement affirming the brand’s long-standing legacy of innovation, exceptional customer experience, and entrepreneurial spirit over the past half-century. The company expressed confidence in the strength of its business and brand.
Brightline, owned by Fortress Investment Group, began operating trains between Miami and West Palm Beach in 2018, marking the first private intercity passenger service in the U.S. in a century. Last month, it extended its services to include the Miami-to-Orlando route.
Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.