FORT WORTH — Jury deliberations resume Tuesday in American Airlines’ trademark-infringement case against Skiplagged Inc., an online company that promotes “hidden city” ticketing, a practice that saves many fliers money but, American contends, costs airlines millions in uncaptured revenue.
Jurors in the court of U.S. District Judge Mark T. Pittman began deliberating Friday afternoon before recessing for the holiday weekend.
In closing arguments Friday, one of American’s attorneys, Paul Yetter of Yetter Coleman in Houston, asked the jury to award the airline at least $19.9 million in actual damages, the amount one plaintiff’s expert testified was a conservative estimate of American’s lost profits over the past four years as a result of Skiplagged’s actions.
Hidden city ticketing, also known as “skiplagging,” lets a traveler save money in some instances by booking a flight with a layover in the traveler’s true destination. The traveler then exits at the layover airport and skips the remaining connecting flight or flights.
Yetter said Skiplagged’s unauthorized use of American’s trademarks — the words “American Airlines” and, until a few months ago, American’s logo, a stylized flying eagle — leads visitors to the site to believe, mistakenly, that Skiplagged is an authorized ticketing agent for the airline.
“That is the point of using the trademarks,” Yetter said, adding, “No one would buy a ticket on a website if they didn’t think the website was authorized to sell tickets.”
American’s written agreements with authorized travel sites, such as Expedia, Orbitz, Travelocity and Priceline, prohibit the booking of hidden city tickets.
William Kirkman of Fort Worth, one of Skiplagged’s attorneys, said the jury’s damages verdict should be zero. He said American failed to prove in the weeklong trial that Skiplagged’s use of American’s trademarks met the legal tests for infringement; rather, he said, Skiplagged simply made “nominative fair use” of the trademarks to designate which flights on its site were American flights.
He added that warnings to potential customers, including one that says, “Airlines don’t like when you miss flights to save money so don’t do this often,” and a promotional message on the site that boasts, “We show you flights the airlines don’t want you to see,” make it clear that Skiplagged is not, and has never held itself out as, an authorized business partner of American or of any other airline.
Skiplagged collects a service fee from customers who book hidden city flights through its site, and those fees have brought the small company millions of dollars in revenue.
At the same time, Kirkman noted, American is selling those customers tickets – albeit not for as much as the airline might like — and has made “hundreds of millions” of dollars off tickets booked through Skiplagged. He told the jury the airline wants to take the money Skiplagged has saved its customers and “put it in their pockets.”
In addition to Yetter, American Airlines is represented by, among others, Dee J. Kelly Jr. and Lars L. Berg of Kelly Hart in Fort Worth; and Bina B. Palnitkar of Greenberg Traurig in Dallas.
Skiplagged’s lawyers, in addition to Kirkman, include Aaron Z. Tobin of Condon Tobin Sladek Thornton Nerenberg in Dallas; and Darin M. Klemchuk of Dallas.
The case number in the Northern District of Texas is 4:23-cv-00860.