Spanish start-up files criminal case against American Express for IP dispute

Trappit is a Spanish start-up, which created a tool called ARPO for the purposes of optimizing the costs of air ticket purchase. The air travel industry is known for using dynamic pricing systems through booking systems like Amadeus, Galileo, Sabre or Worldspan where the cost of the air ticket is automatically adjusted based on the demand for a specific flight increasing the margin of the flight operator. Prices of air tickets are also adjusted based on the discounts and offers included by the flight operator as well as based on the time left for take off.

The algorithms developed by Trappit included in ARPO work on optimization of the purchase decision allowing clients to reduce an average of 10% of the cost of the tickets. Statistics show that one third of the purchases have been able to offer a price reduction of 30%. ARPO is started to being widely used by several large travel agencies. Trappit registered the ARPO algorithm in the Territorial Registry of Intellectual Property of Madrid (Spain) on January 2014.

American Express invited Trappit founders on February to 2014 to visit their London headquarters to present the ARPO tool. Both companies conducted negotiations for over a year with the idea to integrate ARPO into Global Business Travel, the largest travel agency which is owned by American Express. During the negotiation phase officials of American Express recognized that ARPO is a revolutionary software for the air travel industry and requested to obtain more insights about the ARPO algorithm. The companies signed several legal documents including non-disclosure agreements and the obligation by AMEX to not develop a similar product during the negotiation process.

American Express informed the representatives of Trappit that they would need to participate in a tender bid for the development of an integrated management system where Trappit had to develop a demo portal for AMEX to test the technology. AMEX informed Trappit that they did not qualify in the tender after obtaining detailed technical information on the internal operation of ARPO algorithm.

AMEX was launched their own air travel cost optimization software called Lastfare, which was developed internally. Trappit founders consider that Lastfare is totally based on the ARPO technology and that AMEX has been fraudulently obtaining information on the ARPO algorithm for replicating it internally and that the whole negotiation and tender process was launched only to obtain internal technical information for such purpose.

Trappit has filed a criminal case against AMEX in Spain for this IP dispute considering that AMEX tried to deceive Trappit for obtaining internal information on ARPO algorithm and replicate it with Lastfare. The Spanish Criminal Court has requested questioning of AMEX Global CEO and Chairman Kenneth Chenault, the CEO of Global Business Travel William Glenn and other employees of AMEX and Global Business Travel involved in the negotiations with Trappit.

Trappit requested as interim measures to stop using Lastfare and granting liabilities in the amount of over 14 million euros for damages.

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