EASYJET celebrated yesterday after settling a bitter court battle with founder Sir Stelios Haji-Ioannou that will see it hold on to the orange “easy” branding in a deal that is expected to net Stelios more than £80m in royalties over the next ten years.
The four-month dispute ended after the two sides agreed a revised branding licence, which has a minimum of ten years, that allows the budget airline to generate revenues from its non-airline operations, such as food and luggage services.
EasyJet has agreed to make annual royalty payments equal to 0.25 per cent of its revenue to Stelios’ easyGroup. It will hand the group £3.9m and £4.95m in the first two years of the new 50-year agreement.
The settlement gives the airline more freedom to generate revenue from outside services, including the possibility of making commission from hotel and rental car bookings if bought through the group’s website.
Stelios, who will be paid £3000,000 a year for the next five years as part of the agreement, has given up the right to appoint himself as chairman of the airline’s board.
He described the settlement as a “win-win for all concerned” and said that he was “content that this was a fair deal for both sides”.
The two first went to court in June to resolve the dispute. Stelios took easyJet to court to clarify what “core” services were and how much his company should be paid in royalties.
Mark Shillito, an intellectual property (IP) partner at Herbert Smith, took the lead role advising long-standing client easyJet on its four month branding dispute against easyGroup founder Sir Stelios Haji-Ioannou.
Shillito has a track record of acting for a number of large corporates embroiled in patent, trademark, branding and contractual disputes. He counts Apple, Vodafone and Yell as some of his clients.
Geoffrey Hobbs QC and Emma Himsworth of One Essex Court were appointed as barristers for the court proceedings which kicked off in June.
Meanwhile, Jane Mutimear, a partner at law firm Bird & Bird, was the lead adviser and main solicitor to easyGroup and Sir Stelios. She specialises in IP litigation.
Michael Bloch QC and James Walmsley of Wilberforce Chambers argued for easyGroup in front of a judge at the chancery division of the High Court.
At the heart of the dispute were tensions over a brand licensing agreement that was struck between easyJet and easyGroup when the airline floated a decade ago. Haji-Ioannou was looking for clarification on the definition of the licensing agreement.