easyDispute over trade mark

21 July, 2010

My colleague Ed Weeks (on his Boardroom Disputes blog) has written a number of times over the past couple of years on the dispute between Sir Stelios Haji-Ioannou and the easyJet board.

This dispute has now developed an intellectual property angle, with Sir Stelios threatening to terminate the airline’s licence to use the “easyJet” trade mark. The trade mark is owned by Sir Stelios’ company easyGroup IP Licensing Limited, and is licensed to easyJet Airline Company Limited under an agreement which Sir Stelios is now threatening to terminate.

easyGroup has issued a “cure notice” to easyJet threatening to terminate the licence agreement unless there is an improvement in easyJet’s punctuality record within the next 90 days. This follows newspaper reports that fewer than 50 per cent of easyJet flights from Gatwick were on time in June.

Should easyGroup proceed to terminate easyJet’s licence, the result would undoubtedly be a huge court battle, given the importance of the easyJet name for the airline. I doubt that the licence agreement contains an express right to terminate for poor punctuality performance: presumably easyGroup are relying on more general obligations, as typically found in trade mark licences, for the licensee to provide services under the licensed mark to a high standard and not to bring the trade mark (or its owners) into disrepute.

Given the risks to both sides of this course of action, I would be very surprised if the licence were terminated. More likely this is being used by Sir Stelios as leverage in his long-running battles with the easyJet board.

Sir Stelios’ ire has no doubt only been increased by the way in which his own personal name and image have been dragged into the controversy over easyJet’s punctuality (and its reluctance to release its performance figures) by easyJet’s main competitor, Ryanair. Ryanair apologised for its ads referring to him as “easy Jet’s Mr Late Again”, but its newspaper ads printing this apology provided another opportunity for it to take a dig at easyJet.

As a final observation, I notice that the Telegraph news item refers to Sir Stelios threatening to remove “the easy brand name”. easyGroup – which owns a large number of trade marks which include “easy” as a prefix – has made a number of attempts over the years to claim the name “easy” itself as a trade mark, without success. I wonder if easyGroup have taken the opportunity themselves to provide a small boost for their claim to “easy” as a brand name.