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Expedia price-matching tool debuts despite Priceline suit

Online travel site Expedia plans to launch a "name your price" feature for airline tickets, just two months after Priceline brought a suit against the company for a similar feature.

Online travel site Expedia has launched a "name your price" feature for airline tickets, just two months after Priceline sued the Microsoft spin-off over a similar feature for hotel reservations.

The new Flight Price Matcher allows customers to specify the amount they will pay for a specific flight. Expedia product manager Suzi LeVine said the service matches customer requests with the lowest price tickets available, even if the price is below the one they requested.

"For you as a customer you can feel confident that you are not going to overpay for a ticket," LeVine said.

Expedia is unveiling the new service as the company prepares its response to a suit filed by Priceline in October, in which Priceline alleged that Expedia's Hotel Price Matcher service violated the Stamford, Conn., company's patents on its business model. Launched in September, the Hotel Price Matcher functions similarly to the new service, allowing customers to name their price on hotel rooms. Expedia's response to Priceline's suit is due on Dec. 20.

Attorney Rich Gray of Outside General Counsel of Silicon Valley said Expedia's move, before a judge has ruled on Priceline's suit, is unusual--and could prove costly to the company.

"It's a double-your-bet move," Gray said. "The judge will not take kindly to the move if it turns out that Priceline has a valid patent and Expedia is infringing on it. On the other hand, it won't matter if Expedia wins."

Like Priceline's service, Expedia requires that customers purchase the tickets that the service finds for them, and those tickets are nonrefundable. LeVine said the service will will match customers with name-brand airlines, including American Airlines and US Airways.

In addition to matching customers with the lowest fare available, LeVine said the service will answer requests within minutes and will link to the lowest fares available if it can't find a match. LeVine said Expedia pressed forward with the service despite Priceline's lawsuit to benefit its customers and suppliers, and was not worried how Priceline would respond.

"We feel confident that we will prevail in this case," LeVine said. "They can do whatever they are doing to do."

Meanwhile, questions have cropped up about the solidity of Priceline's patent because the company did not request a preliminary injunction against Expedia when it filed suit, a decision that Gray called "unusual."

Gray compared Priceline with Amazon.com's recent lawsuit against Barnesandnoble.com. One month after receiving a patent on its one-click buying technology, Amazon sued Barnesandnoble.com, requesting and receiving a preliminary injunction against its rival, preventing Barnesandnoble.com from offering a similar service.

"This at least raises a question if Priceline has as much faith in their patent as Amazon did," Gray said. "If they already had a strong enough patent, they wouldn't have to wait on it."

Priceline spokesman Brian Ek said the company had not requested a preliminary injunction because it expects to have additional patents coming online in the near future. Also the company has not yet been hurt competitively by Microsoft's service, he said.

"We're doing fine competitively," Ek said. "There's a difference between Priceline the business and Priceline the idea."