Jurors declined to award any damages for trademark infringement, which was the primary cause of action American stressed to jurors during the five-day trial.
FORT WORTH, Texas (CN) — A Texas federal jury awarded American Airlines $9.4 million on Tuesday from a travel website behind the controversial “skiplagging” hack of booking cheaper tickets to a connecting city and then abandoning the subsequent flight on the ticket to a final destination.
Jurors deliberated for several hours after five days of trial before U.S. District Judge Mark Pittman in Fort Worth. They ordered New York-based Skiplagged to pay $4.7 million in disgorgement from the travel site’s revenues and another $4.7 million for copyright infringement. The jury declined to award any damages for trademark infringement, which was the primary cause of action American stressed during trial.
Skiplagged attorney William Kirkman of Fort Worth said afterwards that his client is pleased with no damages being awarded on the trademark claim.
American sued Skiplagged last year, claiming it was freeloading off the airline’s good name in promoting the fares. American claimed the hack violates airline policies and risks customers having their airfare voided.
American reportedly removed a 17-year-old from a flight last year and banned him for three years when he tried to fly from Gainesville, Florida, to Charlotte, North Carolina, on a ticket with a final destination of New York City. The ticket was supposedly cheaper than booking a flight to Charlotte alone.
Otherwise known as “hidden city” ticketing, skiplagging involves booking a ticket containing a connecting flight to a destination city, but the traveler leaves the airport on layover at the connecting city and never boards the onward flight. A traveler may be tempted to do this when a direct ticket to the connecting city is more expensive than a ticket with an onward flight to a different final destination.
Skiplagging is not illegal, but airlines view it as a policy violation that is grounds for termination of a traveler’s entire itinerary since the airline can’t sell the empty seat in the onward flight.
Paul Yetter, an attorney for American with Yetter Coleman in Houston, told jurors during opening statements that Skiplagged is not an authorized agent of the airline yet “dresses up” its website with American’s trademarks to look legitimate and fool consumers into thinking they are buying from the airline.
“Skiplagged says it is like Expedia, but it offers no real service,” Yetter said. “If a customer complains, Skiplagged shrugs it’s shoulders.”
Yetter told jurors Skiplagged has made over $90 million deceiving customers using American’s brand without permission, while American has lost millions from the resulting lost ticket sales.
The airline claims Skiplagged usually charges a $10 fee per one-way ticket, but sometimes the fee is 10% of the base fare.
Defense attorneys told jurors how Skiplagged started as a free website that sought to provide more complete flight information and how founder Aktarer Zaman, 31, quit his job as a software engineer at Amazon to focus on Skiplagged as it grew.
Legacy airlines that operate under a hub-and-spoke system will be susceptible to skiplagging due to the necessity of connecting flights to their business model. Budget airlines that work under a more point-to-point system will be less exposed since they offer more direct flights.
United Airlines and online travel agency Orbitz sued in federal court 10 years ago, citing “logistical and public safety concerns” with skiplagging. Skiplagged later settled with Orbitz, while United’s claims were dismissed.
Subscribe to our free newsletters
Our weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.