Ddr Holdings, LLC v. priceline.com LLC

Case: 23-1176 Document: 42 Page: 1 Filed: 12/09/2024

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.

______________________

Case: 23-1176 Document: 42 Page: 2 Filed: 12/09/2024

2 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

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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4 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

(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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6 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

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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8 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

“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

Case: 23-1176 Document: 42 Page: 9 Filed: 12/09/2024

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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10 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

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

Case: 23-1176 Document: 42 Page: 11 Filed: 12/09/2024

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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12 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

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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14 DDR HOLDINGS, LLC v. PRICELINE.COM LLC

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