FlightAware has filed a federal lawsuit against prediction-market operator Kalshi, accusing the company of using its flight information and trademark without permission to determine the outcomes of contracts tied to flight cancellations.
The lawsuit was filed Monday in the U.S. District Court for the Southern District of New York. FlightAware is seeking financial damages as well as an order preventing Kalshi from continuing to use its data and branding.
FlightAware operates a major global flight-tracking service. Kalshi introduced contracts covering nationwide and regional flight cancellations on July 14, the same day it filed with the Commodity Futures Trading Commission (CFTC) to list the products as event contracts.
Under the contracts, traders can take positions on the share of scheduled flights that will be canceled during a specified timeframe.
FlightAware claims Kalshi’s use of its information violates terms that restricted commercial use of the company’s data. The complaint points to a paid AeroAPI account that a Kalshi employee reportedly opened in 2022 and says the account was subject to those restrictions.
The dispute escalated after FlightAware sent Kalshi a cease-and-desist notice. Kalshi denied violating the data license or infringing FlightAware’s trademark, arguing that its use of the company’s name fell under the doctrine of nominative fair use.
FlightAware said Kalshi later added a disclaimer to its website stating that its flight-cancellation markets were not affiliated with or endorsed by FlightAware. The company argues that the disclaimer does not resolve the dispute because Kalshi continued to represent that FlightAware data would be used to settle the contracts and determine which positions win or lose.
FlightAware has also raised concerns about aviation safety. The company argues that financial markets based on flight cancellations could potentially create incentives for participants to interfere with operations in order to influence contract outcomes.
The complaint states that Kalshi has pointed to U.S. Department of Transportation flight data as an alternative source it could use to settle the contracts.
The legal dispute adds to a growing list of challenges facing Kalshi. New York filed a lawsuit against the prediction-market platform last month, alleging that it offered sports and event-based wagers without obtaining a state gaming license. Kalshi and other prediction-market companies are also facing related litigation in Wisconsin and Nevada.
FlightAware’s lawsuit raises a different issue from those gambling-related cases. It centers on whether a prediction-market operator can rely on another company’s proprietary data and trademark to settle financial contracts without first obtaining a commercial agreement.
