Alaska Airlines (NYSE:ALK) faced a setback as its appeal was dismissed in a significant trademark dispute involving approximately $160 million with Virgin Group.

The controversy stems from a London High Court decision last year, which found that Virgin was entitled to royalties despite Alaska Airlines no longer utilizing the Virgin brand.

The dispute centers around a 2014 trademark license agreement between Virgin and Virgin America, which was acquired by Alaska Airlines' parent company in 2016.

According to the agreement, Alaska is obligated to make an annual "minimum royalty" payment of about $8 million to Virgin until 2039, regardless of whether the airline uses the Virgin branding.

Alaska Airlines challenged the ruling, arguing that paying $8 million annually for trademarks it does not intend to use was "commercially nonsensical."

However, the Court of Appeal in London upheld the original verdict on Tuesday.

Judge Stephen Phillips, in his written ruling, affirmed that Virgin's interpretation of the contract was accurate, reinforcing the obligation for Alaska to continue these payments.