Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in DDR Holdings, LLC v. Priceline.com LLC, No. 2023-1177 (December 9, 2024), affirming a district court’s claim construction that led to the parties’ stipulation of noninfringement.
DDR sued Priceline.com and Booking.com (collectively, “Priceline.com”) for infringing four patents related to combining a host website with content from a third-party merchant. Priceline.com petitioned the PTAB for IPR of all four patents, and the PTAB found all claims in three of the four patents unpatentable. The PTAB, however, found U.S. Patent No. 7,818,399 not unpatentable. Applying the “broadest reasonable interpretation standard,” the Board construed the term “merchants” as “producers, distributors, or resellers of the goods or services to be sold.” Later, in district court, the central contention between the parties was whether the constructions of the claim terms “merchants” and “commerce object” should include “goods or services” or just “goods.” With Priceline.com’s alleged infringement concerning a service, a narrower definition of either claim term limited to “goods” would prevent a finding infringement. The district court held that both claim terms were limited to “goods” because the nonprovisional application did not include “services” anywhere within the specification. Based on that construction, the parties stipulated that final judgment of noninfringement was proper and DDR appealed asking the Federal Circuit to reverse the district court’s claim constructions.
The Federal Circuit affirmed. The Court first addressed DDR’s argument that “services” should have been included in the constructions because the provisional application that led to the ’399 patent included reference to “services” and the provisional application was incorporated by reference in the nonprovisional application. The Court rejected DDR’s argument, noting that the intentional deletion of “services” when filing the nonprovisional application was significant and is properly interpreted as narrowing the meaning of the claim terms to cover “goods.” DDR also argued that collateral estoppel should apply and that the PTAB already ruled the term “merchants” was broad enough to cover providers of both “goods and services.” The Court rejected this argument because DDR did not include it in its opening brief. Further, in dicta, the Court stated collateral estoppel does not apply because the PTAB and the district court used two different legal standards to construe the claims, meaning the district court can properly arrive at a narrower definition than that adopted by the PTAB under the “broadest reasonable interpretation” standard.
