Travelport, Orbitz, Farelogix in patent dispute over American Airlines Direct Connect
American Airlines is trying to get travel agents to hook up to AA Direct Connect and bypass global distribution systems, but Travelport is sending signals that the technology may infringe on an Orbitz patent.
Travelport sent a letter to Farelogix, which handles direct-connect distribution as a contractor for American Airlines, asking Farelogix to confirm that the technology it uses in AA Direct Connect does not infringe on an Orbitz patent, U.S. Patent 7,769,610, dated Aug. 3, 2010.
The patent dispute breaks out as Travelport and American Airlines already find themselves in litigation over American Airlines’ notice to Orbitz that the airline intends to pull its flights from Orbitz Dec. 1
That patent, filed in early 2007 and developed by Orbitz staff, including employee #5 Roger Liew, may have something to do with the Supplier Link direct-connects that Orbitz established with its founding airlines.
The Orbitz patent covers a system for booking airline tickets on multiple airline host environments when some airlines are connected directly with the distributor and others use GDSs for some functionality.
A summary of the patent states:
The present invention relates to a system and method for booking air travel itineraries on multiple host ticketing environments. According to an embodiment of the invention a method of booking an itinerary on at least one of a multiplicity of host environments includes providing a plurality of host adaptor modules. Each host adaptor module is configured to interact with one of the host ticketing environments. A booking engine is provided for receiving commands related to booking the air travel itinerary and determining an appropriate host ticketing environment for processing the commands based on a number of predefined criteria. Commands are received by the booking engine and the booking engine determines a first host ticketing environment which is the most appropriate for processing the command. The booking engine then forwards the command to a first host adaptor module which is associated with first host ticketing environment selected by the booking engine. The host adaptor module receives the command and issues the command to said first host ticketing environment.
Of its actions, Travelport states: “Travelport continues to invest in innovative technologies, including licenses to various technologies and we will protect our intellectual property rights in those innovations.”
Since none of the parties — American Airlines, Farelogix, Travelport and Orbitz — are going into details publicly about the patent dispute, it is difficult to determine which elements of the American Airlines/Farelogix direct-connect Travelport believes may impinge on the Orbitz patent.
The nitty-gritty of the patent dispute may involve the Farelogix FLX Supplier Content Adapter (Direct Connect), which Farelogix says “allows users to make and manage ‘direct’ bookings and reservations out of the Supplier Reservation System without any third-party intervention, and at significantly reduced cost to the supplier.”
So, in theory, if American Airlines and/or Farelogix were possibly infringing on the Orbitz patent, why would it be Travelport that steps in to enforce the patent instead of Orbitz?
Travelport’s private equity owners acquired Orbitz Worldwide as part of their purchase of Cendant’s travel distribution businesses on Aug. 23, 2006. A little less than a year later, Travelport spun off Orbitz Worldwide as a public company, but Travelport still owns 48% of Orbitz’s outstanding equity and believes it inherited the right to enforce Orbitz patents.
American Airlines and Travelport already find themselves in litigation on several fronts over American Airlines’ notification that it intends to pull its flights from Orbitz Dec. 1.
The airline is seeking to upend the current airline-GDS distribution model and merchandising paradigm for ancillary services by enticing travel agencies, including Orbitz, to use AA Direct Connect instead of GDS services.
Travelport alleges that if American removes its inventory from Orbitz, then this would violate the airline’s full-content agreement with Travelport GDS.
The dispute between American and Farelogix, on the one hand, and Travelport and Orbitz on the other, over the Orbitz patent widens the current battleground.
It certainly would be a significant setback to American if it or Farelogix were found to have infringed on the Orbitz patent and forced to reconfigure AA Direct Connect.
And, in the interim, Travelport would be able to argue to large travel management companies and other travel agencies that they would be entering a quagmire if they invest resources into interfacing with AA Direct Connect.
Meanwhile, Farelogix expresses confidence that it hasn’t violated anyone’s intellectual property and views Travelport’s letter as a scare tactic, designed to stall the American Airlines initiative.
What is patently clear from all of this is that the overall dispute inevitably will get messier, and may turn into signature moment in the looming merchandising and distribution fight over flight inventory and ancillary services.
Dennis Schaal was North American editor for Tnooz.