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More dark clouds are forming over the controversial travel startup Orbitz. Southwest Airlines filed a lawsuit against the company on Thursday, alleging trademark infringement, false advertising and description, and unfair competition. Orbitz, which is due to launch officially in June, is an Internet-based airfare search engine and ticketing service backed by American, United, Northwest, Delta and Continental airlines. The Department of Justice is still investigating possible antitrust violations surrounding the venture, but in April, the Department of Transportation gave Orbitz the green light to commence operations. Orbitz, which has reached agreements to sell tickets for 455 airlines and says Southwest is the only airline to opt out, quietly opened its beta site in February. It’s using that site to iron out technical kinks before it goes live. Customers cannot buy Southwest Airline tickets on Orbitz because Southwest has made no agreement with the online company. But Southwest’s fares and schedules will appear in Orbitz’s search results. In the lawsuit, Southwest accuses the startup of publishing false and misleading information about its airfares and routes. In addition, Southwest finds fault with the way Orbitz describes itself on its Web site, saying it is “supported and endorsed by the major U.S. airlines” and that it provides “the most low fares.” It also accuses Orbitz of trademark infringement, on grounds that it includes the airline’s logo in its search results. Orbitz general counsel Gary Doernhoefer responded to Southwest on Friday with a faxed letter, in which he expressed disappointment with Southwest’s measures. In April, Southwest asked Orbitz to make certain changes, and Orbitz complied with three of the five requests. Now, it seems, Southwest wants Orbitz to remove all evidence of Southwest’s offers on its site. “We were hopeful that Orbitz’ response, fixing three of the five issues you raised in your initial letter and offering to work with you on the others, would begin a productive dialogue,” Doernhoefer wrote. “We doubt very much that the threatened litigation is a better way to resolve the remaining differences.” The letter went on to add that Orbitz is still in the testing phase and is confident it can address the concern that it might not be displaying Southwest’s lowest fares. “It seems to me they’re just mad at Orbitz,” says Kate Rice, analyst with travel market research firm PhoCusRight. “We are not interested in becoming dependent on a company owned by a cartel of our competitors,” says Linda Rutherford, spokeswoman for Southwest Airlines. Southwest prefers to sell directly to its consumers. Although it does receive about 30 percent of its business through traditional travel agents, it currently does not sell tickets through any of the other major Internet agencies, such as Expedia and Travelocity.com. Orbitz says it gets information on Southwest’s airfares from ATPCO, the same depository that other agencies use. But Southwest says Orbitz gives its customers information on flight routes that are more complicated than the routes that Southwest offers its customers. “What they’re doing is using their own software programs to manipulate the data when they get it [from ATPCO],” Rutherford says. “There is no way we can be sure that they display accurate information.” For a company that hasn’t even launched yet, Orbitz has created quite a stir in the airline industry. The company has hired Chiat Day to create an aggressive advertising campaign at the launch to help build brand momentum among consumers. But as long as these kinds of controversies keep surfacing, Orbitz is getting more marketing bang from its legal buck. Copyright (c) 2001 The Industry Standard

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