Richard Branson sues US rail company for Virgin name change

Virgin is suing a rail company for backing away from using the Virgin name because it was no longer a brand of “high repute”.

A US rail company is being sued for $330 million for ditching the Virgin name, claiming it was no longer a brand of “high repute”.

The rail company, Brightline, signed a 20-year deal with Sir Richard Branson’s Virgin Enterprises in 2018 to operate as Virgin Trains USA, with Virgin to be paid in royalties.

The company adopted the new name and its stations and trains were revamped to fit the Virgin theme.

But Virgin claims the rail company has ended its deal because it believed the Virgin brand “ceased to constitute a brand of international high repute, largely because of matters related to the pandemic”, the South Florida Sun Sentinel reports.

Virgin denies its reputation has suffered and is suing the Florida-based rail company for $329.5 million in damages in a London court.

A US rail company is being sued for $330 million for ditching the Virgin name, claiming it was no longer a brand of ‘high repute’. Picture: Oli Scarff/AFP

Brightline, which operates passenger services in the Florida cities of Fort Lauderdale, West Palm Beach and Miami, halted services in late March 2020 due to the pandemic, and is expected to resume operations later this year.

Virgin said after ending the licencing deal, Brightline continued with its project to extend its network Orlando and entered into deals to launch a new station and commuter service. It is also planning a route between Apple Valley, near Los Angeles, and Las Vegas.

Virgin, which is based in the UK, claims Brightline’s assessment of the Virgin name “was, and is, completely false”.

“The Virgin brand has, at all material times, remained a brand of international high repute,” the lawsuit says, according to the Sun Sentinel.

“The defendant was not entitled to terminate the trademark license agreement.”

In its lawsuit, Virgin claims that according to the terms of the deal, the earliest Brightline could have ended it was in 2023, and because of that Virgin was entitled to royalties paid until that year, as well as an early termination fee.

It’s been a tough 12 months for Virgin Group founder Sir Richard Branson. Picture: Don Emmert/AFP

The Virgin brand has been dealt some major blows during the pandemic.

Virgin Australia went into voluntary administration shortly after international air traffic plunged due to COVID-19, and emerged with a new owner in private equity firm Bain Capital.

Cash-strapped Virgin Atlantic, which only flies long-haul routes, was forced to cut thousands of jobs as part of a $3 billion rescue plan.

Virgin founder Sir Richard Branson even offered his luxury Caribbean island as collateral to secure a UK government bailout for the London-based airline.

Sir Richard attracted criticism for calling on governments in the UK and Australia to help his airlines survive the pandemic.

COVID-19 also set his Virgin Voyages cruise venture off on a slow start, with the debut of two of his new cruise ships delayed due to the pandemic.