DCT

1:17-cv-00498

DDR Holdings LLC v. Pricelinecom LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:17-cv-00498, D. Del., 05/02/2017
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant is a Delaware company and is alleged to offer its affiliate program to customers in Delaware.
  • Core Dispute: Plaintiff alleges that Defendant’s "Priceline Partner Network" affiliate program infringes four patents related to generating a composite web page that combines a third-party merchant's product information with the "look and feel" of the host's website.
  • Technical Context: The technology addresses the problem of "affiliate marketing" in e-commerce, where a host website that refers a customer to a merchant's website typically loses that visitor's traffic.
  • Key Procedural History: The complaint highlights that the parent patent to the patents-in-suit, U.S. Patent 7,818,399, was previously found to be valid and infringed by a jury in the Eastern District of Texas, a judgment that was affirmed by the U.S. Court of Appeals for the Federal Circuit in 2014. The complaint also notes that the other three patents-in-suit issued from the U.S. Patent and Trademark Office after the district court judgment and Federal Circuit affirmance. Plaintiff also alleges it provided Defendant with notice of the patents beginning in August 2015, followed by licensing discussions that were ultimately refused by Defendant.

Case Timeline

Date Event
1998-09-17 Earliest Priority Date for all Patents-in-Suit
2006-01-01 Plaintiff DDR files "Texas Suit" on parent patents
2010-10-19 U.S. Patent 7,818,399 Issues
2013-08-20 U.S. Patent 8,515,825 Issues
2014-12-01 Federal Circuit affirms infringement judgment on '399 Patent
2015-05-26 U.S. Patent 9,043,228 Issues
2015-08-05 Plaintiff's counsel allegedly writes to Defendant regarding '399, '825, and '228 Patents
2017-04-13 Plaintiff's counsel allegedly writes to Defendant regarding impending issuance of '876 Patent
2017-05-02 U.S. Patent 9,639,876 Issues
2017-05-02 Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 7,818,399 - "Methods of expanding commercial opportunities for internet websites through coordinated offsite marketing"

The Invention Explained

  • Problem Addressed: The patent's background section describes a key drawback of early internet affiliate programs: when a visitor on a "host" website clicks a link for a third-party merchant's product, they are taken away from the host's site to the merchant's site, resulting in a "loss of the visitor to the vendor" ('399 Patent, col. 2:35-42). This "lure[s] the visitor traffic away from the affiliate" website ('399 Patent, col. 2:38-39).
  • The Patented Solution: The invention is a system where an "outsource provider" generates a new, composite web page upon activation of a merchant link on a host site. This new page displays the merchant's product information but is framed with the "look and feel" (e.g., logos, colors, layout) of the original host website, giving the "viewer of the page the impression that she is viewing pages served by the host" ('399 Patent, col. 3:9-24; Abstract). This allows the host to retain visitor traffic while still facilitating a third-party sale.
  • Technical Importance: This approach provided a method for host websites to engage in affiliate marketing without losing control of the user experience or ceding visitor traffic to the merchant partner ('399 Patent, col. 2:67-col. 3:3).

Key Claims at a Glance

  • The complaint asserts independent claim 1 ('399 Patent, col. 26:22-col. 27:3).
  • Claim 1 of the ’399 Patent is a method claim with the following essential elements:
    • Automatically, at a server of an outsource provider, recognizing a source web page on which a link has been activated.
    • Automatically retrieving pre-stored data associated with the source page.
    • Automatically generating and transmitting a second, composite web page.
    • The composite web page must include both (i) information associated with a "commerce object" linked to the activated link and (ii) a plurality of "visually perceptible elements" derived from the retrieved data that visually correspond to the source page.
  • The complaint also asserts dependent claims 3-11, 13-16, and 18 (Compl. ¶17).

U.S. Patent No. 8,515,825 - "Methods of expanding commercial opportunities for internet websites through coordinated offsite marketing"

The Invention Explained

  • Problem Addressed: As a continuation of the '399 patent family, the '825 Patent addresses the same problem of host websites losing visitor traffic when a user clicks on an advertisement for a third-party merchant ('825 Patent, col. 2:32-44).
  • The Patented Solution: The patent describes a system comprising a data store and a computer server. The data store holds information defining the "visually perceptible elements" of a host website. When a user clicks a link on the host site, the computer server retrieves this stored data and generates a composite web page that merges the host's look and feel with the merchant's commercial content, thereby keeping the user within a familiar visual environment ('825 Patent, Abstract; col. 3:19-25).
  • Technical Importance: This system architecture provides a scalable technical solution for an outsource provider to serve co-branded pages for multiple different host websites simultaneously ('825 Patent, col. 5:1-12).

Key Claims at a Glance

  • The complaint asserts independent claims 1, 11, and 17 ('825 Patent, col. 27:6-col. 28:50).

  • Claim 1 of the ’825 Patent is a system claim with the following essential elements:

    • An electronic storage device containing data defining a plurality of "visually perceptible elements" corresponding to a source web page.
    • A computer server device that, upon receiving a request from a visitor computer:
      • (i) retrieves the stored data defining the visually perceptible elements.
      • (ii) serves a composite web page that includes both (A) information associated with a commerce object and (B) the plurality of visually perceptible elements derived from the retrieved data.

  • The complaint asserts all claims of the patent (Compl. ¶17).

  • Multi-Patent Capsule: U.S. Patent 9,043,228

    • Patent Identification: U.S. Patent No. 9,043,228, "Specially programmed computer server serving pages offering commercial opportunities for merchants through coordinated offsite marketing," issued May 26, 2015.
    • Technology Synopsis: This patent, also in the same family, claims a specially programmed computer server that performs the functions described for the '399 and '825 patents. It focuses on the server being programmed to receive a request from a link on a host website and automatically serve a composite page that combines the host's "look and feel" with a merchant's e-commerce offering.
    • Asserted Claims: Independent claims 1 and 9 are asserted (Compl. ¶17).
    • Accused Features: The accused features are the same server-side operations of the Priceline Partner Network that allegedly recognize the host website and serve a custom-branded booking page (Compl. ¶18, 20).

  • Multi-Patent Capsule: U.S. Patent 9,639,876

    • Patent Identification: U.S. Patent No. 9,639,876, "Method and computer system for serving commerce information of an outsource provider in connection with host web pages offering commercial opportunities," issued May 2, 2017.
    • Technology Synopsis: This patent claims a method and system for serving commerce information from an outsource provider. The claimed method involves receiving a request from a visitor computer, and in response, serving a dynamically generated composite page containing instructions for the visitor's computer to display both the merchant's information and the host website's visually perceptible elements.
    • Asserted Claims: Independent claims 1 and 11 are asserted (Compl. ¶17).
    • Accused Features: The accused features are the methods performed by the Priceline Partner Network to create and transmit the composite, co-branded booking pages to end users (Compl. ¶18, 20).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentality is Defendant's affiliate program, identified as the "Priceline Partner Network" (Compl. ¶12).

Functionality and Market Context

  • The complaint alleges that Priceline acts as an "outsource provider" that controls a computer server system for its affiliate partners (i.e., "hosts") (Compl. ¶18). When a visitor on a partner's website activates a link, the visitor is redirected to a URL at Priceline's server system (Compl. ¶18).
  • Priceline’s system allegedly recognizes the partner website from which the link was activated "based on data contained in the activated URL" (Compl. ¶18). In response, the system serves a "composite web page" that is "custom branded with [the partner's] own look and feel" (Compl. ¶18, 19). This composite page combines product information (e.g., hotel rooms, flights) from Priceline's merchants with the visual elements of the partner's website, giving the visitor the impression they are still on the partner's site (Compl. ¶18, 20).
  • No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

  • '399 Patent Infringement Allegations
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
(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... Priceline's server system, acting as an outsource provider, recognizes the partner's source page when a link is activated, based on data in the activated URL. ¶18 col. 26:22-31
(b) automatically retrieving from a storage coupled to the server pre-stored data associated with the source page... Priceline’s server system retrieves stored data defining the partner's "look and feel," such as HTML, CSS, or image files. ¶18, 19 col. 26:32-35
(c) automatically with the server computer-generating and transmitting to the web browser a second web page that includes: (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. Priceline’s server system generates and serves a composite web page displaying Priceline's merchant content (e.g., flights, hotels) while also displaying visual elements (e.g., logo, background color) that correspond to the partner's source page. ¶18, 20 col. 26:36-44

  • Identified Points of Contention:

    • Scope Questions: A central question may be whether the "custom branded" pages generated by the Priceline Partner Network, which allegedly incorporate a partner's logo, colors, and fonts, meet the claim requirement of including a "plurality of visually perceptible elements derived from... data associated with the source page." The analysis may explore whether "deriving" these elements requires a specific technical process of data extraction from the host page itself, versus using pre-configured branding templates selected by the partner.
    • Technical Questions: The complaint alleges Priceline’s system "recogniz[es] the source page... based on data contained in the activated URL" (Compl. ¶18). A point of contention could be the specific mechanism of this recognition and whether it aligns with the process disclosed in the patent specification.

  • '825 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
(a) an electronic storage device containing data defining a plurality of visually perceptible elements visually corresponding to a source web page... Priceline's system uses stored data, such as HTML, CSS, and image files, that define the "look and feel" for its partners' websites. ¶19, 21 col. 27:7-10
(b) a computer server device... programmed to, upon receiving over the Internet an electronic request generated by a visitor computer in response to selection of the URL, automatically: (i) retrieve from the storage device the stored data defining the plurality of visually perceptible elements, and (ii) serve to the visitor computer a composite web page... Priceline's server system receives a request when a user clicks a link, retrieves the stored branding data for the specific partner, and serves instructions for displaying a composite web page. ¶18 col. 27:11-23
which composite web page includes: (A) information associated with the commerce object... and (B) the plurality of visually perceptible elements derived from the retrieved data... The served composite web page allegedly includes Priceline's commerce objects (hotels, flights) and the partner's visual branding elements, retaining the partner's "look and feel." ¶18, 20 col. 27:24-30
  • Identified Points of Contention:
    • Scope Questions: As with the '399 patent, a key question for this system claim will be whether the data stored and used by Priceline for branding constitutes "data defining a plurality of visually perceptible elements visually corresponding to the source web page." The dispute may turn on how direct the correspondence must be between the stored data and the actual visual presentation of the partner's live website.
    • Technical Questions: What evidence does the complaint provide that the stored branding elements are "derived from" data that "visually corresponds to the source page," as opposed to being generic branding assets provided by the partner to Priceline?

V. Key Claim Terms for Construction

  • The Term: "visually perceptible elements"

  • Context and Importance: This term is the core of the invention's "look and feel" concept and appears in the independent claims of all asserted patents. Its construction will be critical for determining whether the branding on Priceline's partner pages is sufficient to meet the claim limitations. Practitioners may focus on this term because the degree of visual integration required for infringement hangs on its definition.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification provides a non-exhaustive list of what these elements can be, including "logos, colors, page layout, navigation systems, frames, 'mouse-over' effects, or other elements that are consistent through some or all of a Host's website" ('399 Patent, col. 13:10-14). The use of "or other elements" suggests the term is not limited to the specific examples listed.
    • Evidence for a Narrower Interpretation: The detailed description of an embodiment describes a specific process of capturing the HTML for a page's header and footer to replicate the look and feel ('399 Patent, col. 13:46-50; Fig. 6). A party could argue that "visually perceptible elements" should be construed in light of this disclosed embodiment, requiring more than just logos and colors.

  • The Term: "recognizing as the source page"

  • Context and Importance: This phrase defines the triggering step of the claimed method. The mechanism of "recognizing" the host website is a prerequisite for retrieving the correct "look and feel" data. The dispute may focus on whether passing a simple identifier in a URL qualifies as "recognizing" in the context of the patent.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The claims do not specify how the server must perform the recognition. The absence of a specific mechanism could support a broader construction that covers any technical means of identifying the origin of the link click, such as reading a partner ID from the activated URL, as the complaint alleges (Compl. ¶18).
    • Evidence for a Narrower Interpretation: The patent specification describes a system where a unique "Link ID" is generated that "identifies who the host is" ('399 Patent, col. 14:12-14). A party could argue that the term "recognizing" should be limited to the use of a specific, pre-assigned identifier system as described, rather than any ad-hoc method of URL analysis.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges in the alternative that Priceline induces infringement by providing marketing materials and instructions to its customers (partners) on how to place the customized links on their pages to interface with Priceline's servers (Compl. ¶22). Contributory infringement is also alleged, based on Priceline providing access to its server system, which allegedly forms a material part of the invention with no substantial non-infringing use (Compl. ¶22).
  • Willful Infringement: Willfulness is alleged based on Defendant’s knowledge of the patents since at least August 5, 2015, and its knowledge of the prior Federal Circuit decision affirming the validity and infringement of the parent '399 Patent (Compl. ¶12, 28). The complaint alleges that Priceline "continued or began activities falling within the scope of at least one claim... without a justifiable basis for believing that the claims are invalid or not infringed" (Compl. ¶28).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of definitional scope: does the alleged use of a partner's "logo, background color, and fonts" by the Priceline Partner Network satisfy the claim requirement for generating a page with a "plurality of visually perceptible elements" that are "derived from" and "visually corresponding to the source page"? The case may turn on whether this requires a dynamic replication of the host site's structure or if applying a pre-set branding template is sufficient.
  • A key legal and evidentiary question will be the impact of prior litigation: given the Federal Circuit’s prior affirmance of an infringement and validity judgment on the parent '399 patent against a similar affiliate marketing system, what distinct technical arguments or invalidity theories, if any, can Defendant raise to differentiate the accused Priceline system or the newly asserted patents from the prior adjudicated case?