On Tuesday, a Texas jury awarded American Airlines $9.4 million in damages in their case against Skiplagged.com, a service that lets users find cheaper fares by skipping part of their itinerary.

American Airlines filed the case last year, claiming that Skiplagged.com was breaching its site’s terms of service, misusing its trademarks and violating the copyright of its logo.

Airlines have been targeting Skiplagged.com for over a decade. In 2014, United Airlines and Orbitz sued the company over the practice of Skiplagging itself. Though Orbitz settled, United’s case was dismissed. Southwest Airlines filed a similar lawsuit in 2021, but it was also dismissed.

While this latest verdict is ostensibly a victory for American Airlines, it is somewhat pyrrhic. The company had initially sought ten times that amount in damages, $94.4 million, and was only given damages on the copyright claim, not the trademark ones.

To call this ruling bizarre is an understatement. While it’s not as confusing as the Kat Von D verdict from February, it’s unusual to see a copyright claim succeed where a trademark one failed.

It also makes it less clear what both parties’ next steps are.

The Background of the Case

Skiplagging, or “hidden city travel,” involves booking a trip with a layover in the target city. The flyer reaches the layover and deliberately misses the next flight as they are at their destination.

The technique can save travelers money. For example, a trip from New Orleans to New York with a layover in Atlanta may be cheaper than a direct flight between New Orleans and Atlanta. So, taking the New York trip and skipping the last leg makes financial sense.

However, airlines are not fond of this practice. They claim it hurts revenue and creates logistical problems. They have policies prohibiting the practice and have even banned flyers who have used it.

However, despite multiple lawsuits, the airlines have been unable to stop skiplagging or Skiplagging.com. This case represents the first courtroom “win” against the site in over a decade.

That’s because the case focused less on the practice itself and more on intellectual property issues. American Airlines argued that the use of their logos and other identifying marks on the site was a trademark infringement. They claimed it misled consumers into thinking Skiplagged.com was an authorized site.

However, the site argued that it is plastered with warnings about how airlines do not allow skiplagging and they are showing them fares the airlines “don’t want them to see.” They felt no reasonable customer should be confused by the presence of the logos.

The jury, for their part, seemed to agree with that logic. They awarded no damages for the trademark claims.

However, American Airlines also claimed copyright infringement in its “flight symbol” logo. Since the logo is a pictorial or graphic work, it can be protected under both trademark and copyright. American Airlines registered the work with the US Copyright Office in 2016.

Though the jury didn’t award damages on the trademark issues, it chose to award $4.7 million in damages for copyright infringement and another $4.7 million in disgorgement of Skiplagged.com’s revenue.

The Potential Impacts of this Verdict

To put it midly, the copyright claim was an afterthought in this case. It was the last of five counts in the original complaint and very little time is spent on it.

The bulk of this case has focused on trademark issues. American Airlines argued that the use of its marks was confusing. However, Skiplagged.com argued that it made it clear it has no affiliation with American or any airline.

The jury felt Skiplagged.com had done enough to distance themselves, awarding no damages on those claims. However, the jury treated the logo like any other artistic image and ruled that using the logo on the site was not fair use. Thus, they awarded $9.4 million in damages.

However, Skiplagged.com used the logo the same way countless other sites on the internet do: to represent the companies or organizations they’re talking about.

Though logos can and do enjoy both copyright and trademark protection, copyright enforcement is rare. Companies usually only take action when someone uses the logo in a way that confuses or misleads viewers. It’s rare to see it defended the same as a photograph, a painting or any other creative work.

That’s because, while logos are certainly creative works, their value is not in their creativity. The value is in what they represent: the company. Because of that, dual protection has rarely been an issue.

This ruling could impact how sites, including this one, use logos moving forward. For example, I obtain licensed images when using photographs, artwork and other visual elements. The exception has been logos when discussing a particular company.

While I don’t think American Airlines will come after me for using the logo at the top of the article, the verdict sets a precedent for where they could. This could, in turn, alter how people discuss and represent companies online.

Admittedly, it’s a very remote possibility, but it is one that we have to consider.

Bottom Line

To be clear, I don’t think this case will cause a significant shift in logo usage. I don’t see companies lining up to file takedowns or lawsuits over common uses of their logos.

That’s because this case was never about the logo. It was and is about the practice of skiplagging. They didn’t go after journalists, bloggers or YouTubers over the issue. They targeted a rival site they have been trying to stop for a decade.

Still, the verdict should give others some pause. Though logos have long enjoyed copyright and trademark protection, the copyright side has rarely come up, especially without trademark issues.

It’s a bizarre decision, and it feels like a jury decided that American Airlines was still wronged even though no trademark infringement had occurred. Copyright was just a way to award damages without finding in favor of the trademark claims.

Though it’s likely a one-off decision in a very unusual case, sometimes these verdicts do matter. The Blurred Lines verdict, for example, was a one-off that wasn’t replicated, but it severely impacted the music industry for years.

Still, it will be interesting to see what changes Skiplagged.com makes following this ruling. Removing the logo should be straightforward, but it will have to be replaced with something that doesn’t raise its own copyright or trademark issues.