FlightAware has unexpectedly withdrawn its legal action against Kalshi, leaving open questions about whether the disagreement was settled privately and its implications for prediction markets that depend on third-party data.
The flight tracking service initiated the lawsuit against Kalshi on August 10 in the Southern District of New York, alleging that the prediction market utilized its data and trademark without authorization to operate what the complaint described as 'gambling markets on flight cancellations.'
However, by the next day, FlightAware had filed a notice of voluntary dismissal, opting to abandon the case along with a request for a temporary restraining order aimed at halting Kalshi’s alleged unauthorized use of its data and trademarks.
This notice, filed on August 11, was brief, spanning just one and a half pages, and was submitted under Federal Rule of Civil Procedure 41(a)(1)(A)(i). This rule permits a plaintiff to unilaterally dismiss a case before the defendant has responded or moved for summary judgment, without needing the judge’s approval or the other party's agreement.
FlightAware dismissed its action against all four Kalshi entities without prejudice, maintaining the option to refile the same claims in the future. The notice did not provide any explanation for this decision, and there was no court order, settlement, or joint statement to clarify what had changed.
Notably, around the same time that the lawsuit was dropped, FlightAware's name was also removed from Kalshi's market page. The platform modified the contract settlement language from 'verified from FlightAware' to 'verified from Primary Source Agency.' A link still leads users to FlightAware’s website, but a disclaimer clarifies that any mention of the source is purely descriptive and does not imply endorsement or affiliation.
In its original complaint, FlightAware stated that Kalshi had not informed them about the use of their data to establish flight-cancellation markets or display their trademarks. The complaint highlighted that Kalshi had opened a free 'Personal' AeroAPI account in July 2022, which explicitly prohibited commercial use.
Additionally, the complaint pointed out a Kalshi employee, an attorney involved in establishing market rules, who allegedly opened a FlightAware account on July 14, coinciding with Kalshi's filing with the CFTC to launch the flight-cancellation markets.
Concerns regarding the safety implications of prediction markets on flight cancellations were a key aspect of the complaint. FlightAware contended that a market that pays out for flight cancellations could incentivize individuals to disrupt air travel, instigate cancellations, or manipulate information used for market settlements.
Airlines for America, a trade association representing major U.S. airlines, echoed these safety concerns, stating that the integrity of the aviation system should never be treated as a gambling market.
Despite the brief legal tussle, Kalshi did not back down. Following FlightAware's termination of data access and a cease-and-desist letter on July 15, Kalshi responded two days later, denying any breach of license or trademark infringement. The company argued that its references to FlightAware constituted nominative fair use, allowing it to mention another company to accurately describe a product.
The dismissal of the case means that none of the arguments will be examined in court. However, FlightAware did achieve one significant outcome: its name has been removed from Kalshi’s primary verification language.