Southwest persuades court to shut down boarding pass company’s operations

Southwest Airlines Co. v. BoardFirst, L.L.C. (N.D. Tex. Sept. 12, 2007).  BoardFirst went into business in 2005 to assist Southwest passengers in obtaining the coveted “A” group boarding passes.  “A” boarding passes are obtained by the first 45 passengers to check in, and “A” passengers are the first to board the aircraft.  A BoardFirst customer authorizes the company to act as the customer’s agent.  When the customer’s boarding pass becomes available, a BoardFirst employee uses the customer’s personal information to log onto southwest.com and attempt to obtain an “A” boarding pass for the customer.  BoardFirst notifies its customer if it was successful; if so, BoardFirst collects a $5 fee from the customer, who prints the boarding pass via southwest.com or at an airport kiosk.

Southwest sent BoardFirst cease and desist letters, but BoardFirst continued to operate.  So Southwest sued BoardFirst, alleging causes of action for breach of contract, violation of the federal Computer Fraud and Abuse Act and for violation of a Texas statute prohibiting harmful access to a computer.  Southwest sought damages as well as a permanent injunction against BoardFirst’s operations.  Southwest moved for partial summary judgment on its causes of action and on BoardFirst’s counterclaims for tortious interference with contractual relations.

The court granted Southwest’s motion as to its breach of contract cause of action, holding that BoardFirst had breached the parties’ “browsewrap” agreement.  A browsewrap agreement is entered into between a web site owner and a user of the site when the user accesses the site after having received actual or constructive knowledge that such access constitutes acceptance of the site’s terms and conditions.

Southwest.com’s home page displayed a notice stating that use of the site constitutes acceptance of Southwest’s terms and conditions, one of which was that site use was only permitted for “personal, non-commercial purposes.”  The court held that BoardFirst had actual knowledge of the prohibition against commercial use of the site since at least the time it received Southwest’s first cease and desist letter.  BoardFirst argued that it did not breach the contract because its use of the site was authorized by its customers.  The court rejected this argument, holding that BoardFirst’s authorization to act for its customers “does not make its conduct any less of a violation of the Terms.”

The court then considered whether Southwest had suffered damages due to BoardFirst’s conduct.  Southwest argued that it had incurred damages because BoardFirst’s activities had decreased traffic on its site, thereby depriving Southwest of selling and advertising opportunities, and because BoardFirst’s activities had interfered with Southwest’s effort to build an “egalitarian” image by creating a “de facto first class” for its flights.

The court held that Southwest was entitled to damages but that its damages were impossible to quantify, thus making the remedy of a permanent injunction “particularly suitable.”  The court permanently enjoined BoardFirst “from using southwest.com in a way that breaches the Terms posted on the site.”  The court denied Southwest’s motion as to its federal and state computer-related causes of action and as to BoardFirst’s tortious interference counterclaims.

Note:  This opinion is significant because many web site owners, such as Ticketmaster in its lawsuit against Tickets.com, have failed to persuade courts to enforce their sites’ terms and conditions.  The opinion provides an effective road map for airlines that wish to make sure that users of their sites comply with the sites’ rules.

Airline fights back against certificate brokering

Northwest Airlines, Inc. v. Bauer (D. N.D. Dec. 15, 2006).  Since the early days of the Internet, various web site owners have brazenly offered to buy and sell airline discount and upgrade certificates, a direct violation of the terms governing such certificates.  To add insult to injury, these sites have often used airline logos and other valuable trademarks to promote their illicit services by confusing consumers into believing that there was some association between the airlines and the site.  Northwest decided to take action against one such site owner and has been successful in its initial efforts.

Northwest became aware that the owner of “northwestdiscountcoupons.com” was offering the airline’s e-Certificates for sale.  The airline distributes e-Certificates to passengers who have experienced flight delays and other problems; they allow the holder to obtain substantial discounts on ticket purchases.  By their terms, e-Certificates may be transferred but not sold.

In its lawsuit, Northwest requested injunctive relief and monetary damages as remedies for the site owner’s infringement of the airline’s marks and fraudulent sale of e-Certificates.  The airline immediately moved for a temporary restraining order prohibiting further e-Certificate buying and selling, as well as further use of the northwestdiscountcoupons.com site or any other term that is confusingly similar to any Northwest trademark.  The court granted the TRO.

A recent visit to northwestdiscountcoupons.com revealed that the site has been reduced to one page that meekly states as follows:  “This website has been removed.”