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Alaska Airlines loses appeal in $160 million UK trademark dispute with Virgin Aviation

FILE PHOTO: Alaska Airlines commercial airplanes are shown parked in San Diego

LONDON (Reuters) - Alaska Airlines on Tuesday lost an appeal in an approximately $160 million trademark case with Virgin Group, after a London court last year ruled Virgin was entitled to royalties even though the U.S. airline no longer uses the Virgin brand.

Virgin units Virgin Aviation TM Ltd and Virgin Enterprises Ltd successfully argued Alaska is liable to pay a roughly $8 million "minimum royalty" payment every year until 2039.

It said a 2014 trademark licence agreement between Virgin and Virgin America Inc, which was acquired by Alaska's parent company in 2016, required the annual payment even if Alaska stopped using its branding.

A judge at London's High Court ruled last year that the minimum royalty was "a flat fee payable for the right to use the Virgin brand, whether or not that right is taken up".

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Alaska Airlines, which had argued that an agreement requiring it to pay $8 million a year for trademarks it has no intention of using was "commercially nonsensical", tried to overturn that ruling.

But the Court of Appeal in London rejected its appeal on Tuesday, with Judge Stephen Phillips saying in a written ruling that Virgin's interpretation of the agreement was correct.

(Reporting by Sam Tobin; editing by William James)