Text settings Story text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only Learn more Minimize to nav Doug Kreuzkamp was shocked when news outlets reported that Google won an auction to buy a huge amount of operational data as part of Spirit Airlines’ bankruptcy proceedings. Kreuzkamp founded a startup called Springshot in 2011, which created a widely used proprietary platform that helps humans and AI systems improve airline efficiency and quickly solve logistics problems so flights can stay on time and airlines can operate as smoothly as possible. Hundreds of airports use it globally. Springshot powered Spirit’s technology stack for the last three years, right up to the “very last flight,” Kreuzkamp told Ars.
Yet his company got no notice when Spirit prepared to auction off a massive dataset that he thinks likely improperly includes a substantial amount of data and intellectual property (IP) that Springshot owns—not Spirit. In a limited objection filed last month, Springshot argued that Spirit’s sale agreement does not make it clear what data is being sold. It only vaguely references categories of data that would possibly rope in Springshot data, including “productivity and collaboration data,” “core business systems and business application data,” and “workflow and process data.” “This expansive definition does nothing to differentiate between Springshot’s intellectual property that exists within Spirit’s data repositories and systems, but Spirit does not own, and Spirit data that it actually owns and has the capacity to sell,” Springshot argued. Springshot urged the court to pause Spirit’s data sale until a transparent forensic process establishes that none of the data Google is grabbing is actually owned by third parties.
If the bankruptcy court does not “pump the brakes,” it risks sanctioning an “unauthorized acquisition and use of trade secrets” that could doom startups, Springshot alleged. In an email to Ars, Springshot summarized its fears as the court possibly creating “a precedent where startups see massive amounts of IP transferred to the world’s richest and most monopolistic companies via bankruptcy courts.” “Bankruptcy cannot become the new land grab for AI,” Kreuzkamp told Ars. “The possession of IP is not ownership.” Asked for comment, Google’s spokesperson declined to discuss mounting objections and repeated a prior statement provided to Ars that did not address any of the concerns raised. “We acquired part of an enterprise dataset from Spirit Airlines, which can be helpful in improving our products and AI models,” Google’s spokesperson said. “We will not receive any personal information from this dataset.” Google may use Springshot data to make AI rival It seems likely that a wide range of Spirit vendors could be in the same spot as Springshot, Kreuzkamp suspects, and his firm is not the only one complaining. Citing Springshot’s concerns in a separate objection, the International Aero Engines LLC and the IAE International Aero Engines AG alleged that the dataset might also include its proprietary commercial information, technical data, and financial data. Both vendors cited confidentiality provisions in Spirit agreements that appear to have been completely ignored in the push to get the data sale approved.
Top concerns are that proprietary data could be transferred to Google without consent, giving firms no chance to guard against Google—or a third party later gaining access to the data—infringing ownership rights and exposing trade secrets. Both vendors said they risked irreparable harm through the sale to Google and then again through possible resales to future third parties. For Springshot, it also seems possible that Google could use its valuable IP to create a rival product. In August, just a week before the controversial Spirit auction, Europe’s largest airline, Ryanair, announced a five-year partnership with Google.
Under the deal, Ryanair will share operational data to improve Gemini Enterprise tools. That “is precisely the function Springshot served for Spirit,” the startup said in a footnote in its objection, while alleging that “Springshot’s data may be among the most AI-relevant assets to be purchased.” As Springshot argued: “Should the sale proceed without such safeguards, and should Google obtain Springshot’s intellectual property and ingest that data, Springshot would forfeit the value of its technology it has spent 15 years developing. That existential threat is only amplified by the fact that Google has recently announced its desire to operationalize its own AI platform for airline operations, placing it in direct competition with Springshot.” Adam Schwartz, a privacy litigation director for a digital rights nonprofit called the Electronic Frontier Foundation, told Ars that allowing Google to buy this dataset via bankruptcy proceedings is unusual. “This is the first time I am aware of so public a bankruptcy proceeding regarding whether a bankrupt company may sell off the personal data it has amassed as an asset in bankruptcy,” Schwartz said. “It is also the first time I am aware of a company seeking to sell its employees’ data (as opposed to its customers’ data) as an asset in bankruptcy.” Kreuzkamp is worried that because bankruptcy courts have not deeply considered this issue before, the system is just not set up to protect vendors like his company. In the past, it was straightforward to determine who owned an asset.
Consider how Spirit is selling airplanes, which bills of sale clearly demonstrate that it owns, he said. His experience suggests that when it comes to digital assets, courts don’t have the proper notice provisions that are necessary to ensure vendors can advocate for IP to be segregated from sales, should purchases like Google’s become the norm. “Our main concern with everything is if you want startups to continue building, you need to protect what they built,” Kreuzkamp told Ars. “If they spent 15 years building IP, that IP should not be misappropriated because their customer went bankrupt.” Springshot and the IAE objectors both want the court to require Spirit to segregate any proprietary vendor data before approving the sale to Google. Springshot argued that it should include any data or information generated by its service or software, including data “likely commingled with much of Spirit’s own operational data (like its employees’ emails, chat histories, etc.).” “To ensure Springshot’s intellectual property is not among the data acquired by Google (or any other potential buyer) a forensic process is necessary to first identify, and then segregate, Springshot’s intellectual property from that actually owned by Spirit,” Springshot argued. Kreuzkamp told Ars that Springshot engaged with Spirit every day before it shut down. “We were very tightly coupled with them, did a lot of great work helping that airline,” he said. “And so, I know there are tens of thousands of emails and documents that I’m sure are in their servers.” Pilots warn of public harms from sale If Spirit is forced to segregate a large chunk of data, the value of the dataset may substantially depreciate for Google.
In its sale agreement, Google stipulated that Spirit ensure that “no portion of the Assets has been deleted, modified, or removed,” other than through planned processes like the deidentification of customers’ personal data and “de minimis” removals preserving privileged materials. Kreuzkamp told Ars that prior to reading the Spirit-Google sale agreement, he assumed that if one of the companies he partnered with became insolvent, that either vendor data would be destroyed or that agreements would be honored to prevent transfers to third parties. On September 16, there will be a hearing where the court will mull objections to
Leave a Reply