Ddr Holdings, LLC v. Priceline.com LLC, Booking.com B.v.

United States Court of Appeals
for the Federal Circuit
______________________
DDR HOLDINGS, LLC,
Plaintiff-Appellant
v.
PRICELINE.COM LLC, BOOKING.COM B.V.,
Defendants-Appellees
______________________
2023-1176, 2023-1177
______________________
Appeals from the United States District Court for the
District of Delaware in Nos. 1:17-cv-00498-CFC-JLH, 1:17-
cv-00499-CFC, Chief Judge Colm F. Connolly.
______________________
Decided: December 9, 2024
______________________
IAN B. CROSBY, Susman Godfrey LLP, Seattle, WA,
argued for plaintiff-appellant. Also represented by SHAWN
DANIEL BLACKBURN, MENG XI, Houston, TX; LOUIS JAMES
HOFFMAN, Hoffman Patent Firm, Scottsdale, AZ.
LAUREN J. DREYER, Baker Botts LLP, Washington, DC,
argued for defendants-appellees. Also represented by
MARGARET MCINERNEY WELSH, New York, NY; JEREMY
TAYLOR, San Francisco, CA; FRANCIS DIGIOVANNI, Faegre
Drinker Biddle & Reath LLP, Wilmington, DE.
______________________
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 2
Before CHEN, MAYER, and CUNNINGHAM, Circuit Judges.
CHEN, Circuit Judge.
DDR Holdings, LLC (DDR) appeals a final judgment of
the United States District Court for the District of
Delaware of non-infringement of U.S. Patent No. 7,818,399
(’399 patent) for Priceline.com LLC and Booking.com B.V.
(collectively, Priceline.com or Appellees). DDR alleges that
the district court erred in construing the claim term
“merchants” to be limited to purveyors of goods alone,
rather than purveyors of goods and services. DDR also
alleges that the district court erred in construing the
related claim term “commerce object” to include goods, but
not services. For the reasons below, we affirm.
BACKGROUND
A. The ’399 Patent
As this court has previously summarized, the ’399
patent relates to generating a composite web page that
combines certain visual elements of a “host” website with
content from a third-party “merchant.” DDR Holdings,
LLC v. Hotels.com, L.P., 773 F.3d 1245, 1248 (Fed. Cir.
2014). The e-commerce system disclosed in the ’399 patent
involves “three main parties” aside from the end consumer:
merchants, hosts, and outsource providers. ’399 patent col.
22 ll. 9–12. “Merchants are the producers, distributors, or
resellers of the goods to be sold through the outsource
provider.” Id. col. 22 ll. 17–19. “A Host is the operator of a
website that engages in Internet commerce by
incorporating one or more link[s] to the e-commerce
outsource provider into its web content.” Id. col. 22 ll. 45–
47. Finally, the outsource provider is an intermediary
between the host and merchant that “[c]reate[s],
maintain[s], and update[s] the ‘look & feel capture’ process
through which consumers are able to shop in a Merchant-
controlled storefront within the design and navigational
context of the Host website, preserving the ownership of
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 3
the visit experience by the Host.” Id. col. 22 l. 60 – col. 23
l. 7. Through the outsource provider, the disclosed system
enables host websites to retain visitor traffic and control
the customer experience while displaying information on
products from third-party merchants. See id. col. 2 ll. 57–
67.
Claim 1 is representative and recites:
1. A method of an outsource provider serving web
pages offering commercial opportunities, the
method comprising:
(a) automatically at a server of the outsource
provider, in response to activation, by a web
browser of a computer user, of a link displayed by
one of a plurality of first web pages, recognizing as
the source page the one of the first web pages on
which the link has been activated;
(i) wherein each of the first web pages belongs
to one of a plurality of web page owners;
(ii) wherein each of the first web pages displays
at least one active link associated with a
commerce object associated with a buying
opportunity of a selected one of a plurality of
merchants; and
(iii) wherein the selected merchant, the
outsource provider, and the owner of the first
web page are each third parties with respect to
one other;
(b) automatically retrieving from a storage coupled
to the server pre-stored data associated with the
source page; and then
(c) automatically with the server computer-
generating and transmitting to the web browser a
second web page that includes:
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 4
(i) information associated with the commerce
object associated with the link that has been
activated, and
(ii) a plurality of visually perceptible elements
derived from the retrieved pre-stored data and
visually corresponding to the source page.
Id. at claim 1 (emphases added).
B. Procedural History
DDR sued Priceline.com in 2017 for infringement of
four patents, including the ’399 patent. Priceline.com
petitioned the Patent Trial and Appeal Board (Board) for
inter partes review (IPR) of all four asserted patents. The
parties stipulated to stay the district court proceedings
pending resolution of the IPRs. The Board found all
challenged claims of three of the asserted patents to be
unpatentable. However, the Board found that the
challenged claims of the ’399 patent were not shown to be
unpatentable. Although its patentability analysis did not
turn on the meaning of “merchants,” the Board applied the
“broadest reasonable interpretation” standard to construe
“merchants” as “producers, distributors, or resellers of the
goods or services to be sold.” J.A. 707–08, 736; J.A. 748–49
(emphasis added).
Following the IPR decisions, the district court lifted the
stay and proceeded with claim construction for the ’399
patent. As relevant to this appeal, the parties disputed the
constructions of the claim terms “merchants” and
“commerce object.” DDR proposed that “merchants” be
construed as “producers, distributors, or resellers of the
goods or services to be sold.” J.A. 1288 (emphasis added).
Priceline.com proposed that “merchants” be construed as
“producers, distributors, or resellers of the goods to be sold
through the outsource provider.” Id. (emphasis added).
The district court construed “merchants” as “producers,
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 5
distributors, or resellers of the goods to be sold.” J.A. 9
(emphasis added).
Additionally, DDR proposed that “commerce object” be
construed as “a product (goods or services), a product
category, a catalog, or an indication that [a] product (goods
or services), product category, or catalog should be chosen
dynamically.” J.A. 1290. Priceline.com proposed that
“commerce object” be construed as “a product, a product
category, a catalog, or an indication that a product, product
category, or catalog should be chosen dynamically.” Id.
Noting that the word “products” is not a claim term, the
district court found “as a matter of fact that the [’399
patent’s] written description treats ‘goods’ and ‘product’
interchangeably, and it distinguishe[s] them [from]
‘services.’” J.A. 1357 l. 21 – 1358 l. 11. The district court
then adopted Priceline.com’s proposed construction,
effectively construing “commerce object” to exclude
“services.” J.A. 9.
Following the court’s claim construction order, the
parties stipulated to non-infringement, “agree[ing] that the
Accused Instrumentalities do not infringe the asserted
claims of the ’399 Patent under the Court’s claim
constructions and that the Court’s construction of either
the term ‘merchants’ or the term ‘commerce object’ is case-
dispositive in Defendants’ favor on the issue of
infringement.” J.A. 5. The court entered final judgment,
from which DDR appeals. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
DISCUSSION
I.
“We review claim construction based on intrinsic
evidence de novo and review any findings of fact regarding
extrinsic evidence for clear error.” SpeedTrack, Inc. v.
Amazon.com, 998 F.3d 1373, 1378 (Fed. Cir. 2021). “Claim
terms are generally given their plain and ordinary
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 6
meanings to one of skill in the art when read in the context
of the specification and prosecution history.” Golden
Bridge Tech., Inc. v. Apple Inc., 758 F.3d 1362, 1365
(Fed. Cir. 2014) (citing Phillips v. AWH Corp., 415 F.3d
1303, 1313 (Fed. Cir. 2005) (en banc)). “There are only two
exceptions to this general rule: 1) when a patentee sets out
a definition and acts as his own lexicographer, or 2) when
the patentee disavows the full scope of a claim term either
in the specification or during prosecution.” Id. (quoting
Thorner v. Sony Comput. Ent. Am. LLC, 669 F.3d 1362,
1365 (Fed. Cir. 2012)).
II.
We turn first to the construction of “merchants.” The
parties’ dispute over this term hinges on the variance in
disclosures made between the ’399 patent’s written
description and the provisional application1 to which the
patent claims priority.
The provisional application, which appears to be a
marketing document for a company called Nexchange,
describes “an alternative approach” to e-commerce that
“lets merchants take advantage of the Internet marketing
competency of third-party website operators.” J.A. 868.
The provisional application includes a section entitled
“Products and Services,” under which it states: “There are
three main parties in every Nexchange relationship,
excluding the end consumer. These parties include
Nexchange Merchants, Nexchange Hosts, and Nexchange.”
Id. at 870. The provisional application continues,
“Nexchange Merchants are the producers of the goods to be
sold through Nexchange.” Id. (emphasis added). Under a
separate section entitled “Value Propositions,” the
provisional application provides: “Merchants, defined as
producers, manufacturers, and select distributors of
1 U.S. Provisional Patent App. No. 60/100,697.
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 7
products or services, are strongly attracted to the sales
potential of the Internet.” Id. at 875–76 (emphasis added).
The provisional application thus discusses merchants as
producers of “goods” in one instance, and “products or
services” in another.
The specification of the ’399 patent provides certain
parallel disclosures. The ’399 patent discloses: “There are
three main parties in the outsourced e-commerce
relationship, excluding the end consumer. These parties
include Merchants, Hosts, and the e-commerce outsource
provider.” ’399 patent col. 22 ll. 9–12. The patent, under
the heading “Merchants,” further provides: “Merchants
are the producers, distributors, or resellers of the goods to
be sold through the outsource provider.” Id. col. 22 ll. 15–
18 (emphasis added). Notably missing from the patent’s
specification, however, is any mention of services in relation
to merchants. There is no disclosure in the specification
analogous to the provisional application’s disclosure that
“[m]erchants [are] defined as producers, manufacturers,
and select distributors of products or services.”
During the claim construction hearing, the district
court began by looking at the claim language and noting
there is “no reference to services.” J.A. 1418 ll. 24–25. The
district court next looked at the written description and
determined it contains “no references to a merchant
providing a service”; “[i]nstead, merchants are always
discussed with respect to products or goods.” Id. at 1418 l.
25 – 1419 l. 3. In discussing the sentence in the provisional
application that “merchants” are “defined as producers,
manufacturers, and select distributors of products or
services,” J.A. 876, the district court noted that the
“deletion from the written description [of the ’399 patent]
of a term that was in the provisional
application . . . . contributes to an understanding of what
the scope and meaning of the final application, the final
written description reflects.” J.A. 1420 l. 17 – 1421 l. 15.
The district court subsequently construed “merchants” as
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 8
“producers, distributors, or resellers of the goods to be
sold.” J.A. 9.
DDR argues on appeal that it acted as its own
lexicographer by providing, in the provisional application,
an “explicit definition” of “merchants” to include “both
goods and services,” as well as making this definition an
“explicit part” of the ’399 patent specification by
incorporating the provisional application by reference.
Appellant’s Br. 11–12 (internal quotation marks omitted).
According to DDR, the ’399 patent specification never
disclaimed or redefined the provisional application’s
definition because the relevant sentence in the
specification—“Merchants are the producers, distributors,
or resellers of the goods to be sold through the outsource
provider”—is not definitional, as it does not use the phrase
“defined as” or set off the term “merchants” by quotation
marks. Id. at 13–16. DDR does not offer an explanation as
to why, compared to the provisional application, the ’399
patent omitted the term “services” from its specification.
Like the district court, we find DDR’s arguments
unpersuasive. When construing claims, this court looks to
how a skilled artisan would read the claim term “in the
context of the entire patent,” including the specification
and prosecution history. Phillips, 415 F.3d at 1313. Here,
the deletion made by the patent drafter between the
provisional application and the patent specification is
highly significant. Although DDR’s provisional application
discussed merchants as both purveyors of “goods” and
purveyors of “products or services,” DDR elected in its
patent specification to delete the reference to “products or
services” and instead discuss merchants as purveyors of
“goods” alone. A skilled artisan would understand this
progression between the provisional application and the
patent specification to indicate an evolution of the
applicant’s intended meaning of the claim term, which is
further reinforced by the specification’s clear statement
that “[m]erchants are the producers, distributors, or
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 9
resellers of the goods to be sold through the outsource
provider,” ’399 patent col. 22 ll. 17–18. In light of the
patentee’s deletion of any reference to merchants providing
“services” in the final specification, we agree with the
district court’s construction that “merchants” are
purveyors of goods, not services.
This court performed a similar analysis in MPHJ
Technology Invs., LLC v. Ricoh Americas Corp., 847 F.3d
1363 (Fed. Cir. 2017). In MPHJ, an appeal from an IPR
proceeding before the Board, the patent owner argued that
the claim term “seamless” required “a one-step operation
without human intervention.” Id. at 1366. For support,
the patent owner relied on the provisional application (to
which the patent-at-issue claimed priority), which included
two statements on “‘one step’ operation using a single
button.” Id. at 1368. The petitioner countered that those
statements in the provisional application were omitted
from the final application, which instead described single-
step operation as “optional.” Id. at 1368–69. In response,
the patent owner argued that “these omitted sections were
not explicitly disclaimed, and therefore . . . they are part of
the prosecution history and are properly relied on to
explain and limit the claims, even if the passages do not
appear in the issued patent.” Id. at 1368.
The MPHJ court determined that, in light of the
“deletion from the . . . [p]rovisional application,” a skilled
artisan “would deem the removal of these limiting clauses
to be significant.” Id. at 1369. Considering both “the
change from the . . . [p]rovisional to the final patent,” and
the statements in the final patent that single-step
operation was “optional,” the court concluded that a
“person skilled in this field would reasonably conclude that
the inventor intended that single-step operation would be
optional, not obligatory.” Id.
Here, too, we determine that a skilled artisan would
deem significant the ’399 patent specification’s deletion of
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 10
the provisional application’s reference to merchants as
purveyors of services. Reading the claim term “in the
context of the entire patent,” Phillips, 415 F.3d at 1313,
including the deletion, a skilled artisan would have
understood “merchants” to exclude services. Accordingly,
we affirm the district court’s construction of “merchants”
as “producers, distributors, or resellers of the goods to be
sold.”
Our conclusion is not undermined by the fact that the
’399 patent specification incorporates by reference the
provisional application. See ’399 patent col. 1 ll. 13–15.
DDR argues that no “deletion” took place because the ’399
patent’s incorporation of the provisional application results
in “one document,” in which neither the written description
on the face of the patent nor the incorporated provisional
application “supersedes or amends its counterpart.”
Appellant’s Br. 9, 16–17.
This court has explained, however, that when a host
patent incorporates another patent by reference, “the
disclosure of the host patent provides context to determine
what impact, if any, a patent incorporated by reference will
have on construction of the host patent claims.” Finjan
LLC v. ESET, LLC, 51 F.4th 1377, 1382 (Fed. Cir. 2022).
In Finjan, this court explained that “[t]he use of a
restrictive term in an earlier application does not reinstate
that term in a later patent that purposely deletes the term,
even if the earlier patent is incorporated by reference.” Id.
at 1383 (citing Modine Mfg. Co. v. U.S. Int’l Trade Comm’n,
75 F.3d 1545, 1553 (Fed. Cir. 1996)). The same principle
holds here. A skilled artisan reading the incorporated
provisional application in the context of the ’399 patent
specification would consider that “merchants” providing
“services” was included in the provisional application, yet
deleted by the patent drafter from the final specification.
That deletion, which “was conspicuous and unambiguous,”
Modine, 75 F.3d at 1552, would in turn indicate to a skilled
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 11
artisan that the patentee intended “merchants” to exclude
services.
We next address DDR’s argument, made in its reply
brief, that Priceline.com is “collaterally estopped from even
suggesting that the nonprovisional contains a definition”
because “Appellees already litigated—and lost—that
precise issue before the [Board].” Appellant’s Reply Br. 24.
DDR refers to the Board’s determination that the
specification’s statement—that “[m]erchants are the
producers, distributors, or resellers of the goods to be sold
through the outsource provider”—is not definitional
“because the statement does not sufficiently evidence an
intention by the patent [a]pplicant to depart from the
ordinary meaning of the term.” J.A. 748. After making
that determination, the Board adopted the patent owner’s
(i.e., DDR’s) definition of merchants as “producers,
distributors, or resellers of the goods or services to be sold,”
reasoning that such definition was “broader and not
unreasonable.” J.A. 749 (citation omitted).
As an initial matter, DDR forfeited this argument both
on appeal and in the underlying district court proceedings.
DDR did not raise its collateral estoppel argument in its
opening brief, and “[o]ur law is well established that
arguments not raised in the opening brief are [forfeited].”
SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312,
1319 (Fed. Cir. 2006).2 And in the underlying claim
construction proceeding, the district court concluded that
DDR had forfeited its collateral estoppel arguments by
2 The SmithKline court used the term “waiver,” but
for consistency we use “forfeiture” here. See In re Google
Tech. Holdings LLC, 980 F.3d 858, 862 (Fed. Cir. 2020) (“By
and large, in reviewing this court’s precedent, it is evident
that the court mainly uses the term ‘waiver’ when applying
the doctrine of ‘forfeiture.’”).
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 12
failing to mention estoppel or preclusion in its briefs.
J.A. 1392 ll. 13–16, 1394 ll. 12–18.
Even ignoring DDR’s forfeiture, we note that neither
this court nor the district court—both of which employ a
Phillips standard for claim construction—is bound by the
Board’s constructions under the broadest reasonable
interpretation standard. 3 Compare Phillips, 415 F.3d at
1312–13, with Cuozzo Speed Techs. v. Com. for Intell. Prop.,
579 U.S. 261, 276 (2016). This court has held that “the
issue preclusion doctrine can apply in this court to the
Patent Trial and Appeal Board’s decision in an IPR once it
becomes final.” Papst Licensing GMBH & Co. KG v.
Samsung Elecs. Am., Inc., 924 F.3d 1243, 1250–51
(Fed. Cir. 2019). But that principle is inapplicable here,
where we employ a different claim construction standard
than that used by the Board. See ParkerVision, Inc. v.
Qualcomm Inc., 116 F.4th 1345, 1361 (Fed. Cir. 2024) (“The
application of collateral estoppel is ‘subject to certain well-
known exceptions’ . . . [including] where ‘the second action
involves application of a different legal standard, even
though the factual setting of both suits may be the same.’”
(quoting B & B Hardware, Inc. v. Hargis Indus., Inc., 575
U.S. 138, 148, 154 (2015))). “Because the Board applies the
broadest reasonable construction of the claims while the
district courts apply a different standard of claim
construction as explored in Phillips,” a party is not
collaterally estopped in district court proceedings by the
3 In late 2018, the Board announced a final rule
adopting the Phillips claim construction standard in IPR
petitions filed on or after November 13, 2018. See, e.g.,
Personalized Media Commc’ns, LLC v. Apple Inc., 952 F.3d
1336, 1340 n.2 (Fed. Cir. 2020). Because the IPR at issue
here was filed before that date, the Board’s claim
construction inquiry was governed by the broadest
reasonable interpretation standard.
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DDR HOLDINGS, LLC v. PRICELINE.COM LLC 13
Board’s constructions during IPR. SkyHawke Techs., LLC
v. Deca Int’l Corp., 828 F.3d 1373, 1376 (Fed. Cir. 2016).
In the related IPR proceedings, the Board determined,
under the broadest reasonable interpretation standard,
that the ’399 patent specification’s statement that
“[m]erchants are the producers, distributors, or resellers of
the goods to be sold through the outsource provider” is not
definitional. J.A. 748. However, the Board had leeway
before determining that a narrowing statement in the
specification provides a definition for a claim term. That is
because the Board’s standard asks for the broadest
construction that is still reasonable, which weighs against
adopting any narrower statement as definitional. A
district court, on the other hand, could conclude under
Phillips that a narrower statement, read in the context of
the specification and prosecution history, would best be
understood by a skilled artisan as definitional. The Board
itself recognized the distinctive nature of the broadest
reasonable interpretation standard when it observed that
its chosen interpretation for “merchants” “is broader and
not unreasonable.” J.A. 749.4
Accordingly, although the Board found the statement
at issue in the specification to not be definitional, we
conclude under Phillips that it is, in light of the intrinsic
evidence. We thus affirm the district court’s construction
of “merchants” as purveyors of goods, not services.
III.
Finally, we turn to the construction of “commerce
object.” The district court “effectively construed” the claim
term “commerce object” based on the same reasoning used
to construe “merchants.” J.A. 1423 l. 25 – 1424 l. 18. On
4 We note that the Board’s analysis did not consider
the difference in disclosures between the provisional
application and the final specification of the ’399 patent.
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appeal, the parties agree that the construction of
“commerce object” should adhere to the construction of
“merchants.” Appellant’s Br. 25; Appellees’ Br. 32–34.
Accordingly, we affirm the district court’s construction of
“commerce object” as “a product, a product category, a
catalog, or an indication that a product, product category,
or catalog should be chosen dynamically.”
CONCLUSION
We have considered DDR’s remaining arguments and
find them unpersuasive. For the foregoing reasons, we
affirm.
AFFIRMED
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