DCT
1:17-cv-00499
DDR Holdings LLC v. Bookingcom BV
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: DDR Holdings, LLC (Georgia)
- Defendant: Booking.com B.V. (Netherlands)
- Plaintiff’s Counsel: Farnan LLP
- Case Identification: 1:17-cv-00499, D. Del., 05/02/2017
- Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant is a subsidiary of a Delaware corporation, conducts substantial business in the district, and offers its accused affiliate program to customers in Delaware.
- Core Dispute: Plaintiff alleges that Defendant’s affiliate marketing program infringes four patents related to generating a composite e-commerce webpage that retains the "look and feel" of a host website when a user clicks on a third-party advertisement.
- Technical Context: The technology addresses a core problem in early affiliate-based e-commerce: how a host website can earn commissions from third-party merchant links without losing visitor traffic and brand continuity when users click away to the merchant's site.
- Key Procedural History: The complaint highlights prior litigation involving the parent U.S. Patent 7,818,399 (’399 Patent). In that case, a jury found the '399 Patent infringed and not invalid, a verdict affirmed by the U.S. Court of Appeals for the Federal Circuit in December 2014. The complaint notes that the remaining three patents-in-suit issued after the district court judgment and Federal Circuit affirmance, suggesting they were prosecuted with knowledge of the arguments and outcomes from that litigation. Plaintiff also alleges it put Defendant on notice of three of the four patents-in-suit as early as August 2015.
Case Timeline
| Date | Event |
|---|---|
| 1998-09-17 | Patent Priority Date ('399, ’825, ’228, ’876 Patents) |
| 2010-10-19 | U.S. Patent 7,818,399 Issued |
| 2013-08-20 | U.S. Patent 8,515,825 Issued |
| 2014-12-01 | Federal Circuit affirms infringement and validity verdict on '399 Patent in prior litigation |
| 2015-05-26 | U.S. Patent 9,043,228 Issued |
| 2015-08-05 | Plaintiff's counsel allegedly notifies Defendant's parent company, Priceline, of '399, '825, and '228 Patents |
| 2017-05-02 | U.S. Patent 9,639,876 Issued |
| 2017-05-02 | Complaint Filed |
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 how conventional affiliate marketing programs on the internet "lure the visitor traffic away from the affiliate" website ('399 Patent, col. 2:33-36). When a visitor on a "host" site clicks a link for a third-party merchant's product, they are taken to the merchant's website, causing the host to lose the visitor and disrupting the user's browsing experience ('399 Patent, col. 2:40-44).
- The Patented Solution: The invention is a method for an "outsource provider" to generate a new, "composite" web page when a user clicks an affiliate link. This new page combines product information from the third-party merchant with the "look and feel" (e.g., logos, colors, page layout) of the original host website, giving the user the impression that they are still viewing pages served by the host ('399 Patent, col. 3:16-25). This allows the host to facilitate a commercial transaction without losing its visitor traffic.
- Technical Importance: This approach allows host websites to monetize their content through affiliate partnerships while retaining control over the customer experience and maintaining brand continuity ('399 Patent, col. 2:59-67).
Key Claims at a Glance
- The complaint asserts claims 1, 3-11, 13-16, and 18, with claim 1 being the sole independent claim asserted (Compl. ¶16).
- Claim 1, a method claim, includes these essential elements:
- An outsource provider’s server automatically recognizes the activation of a link on a “source page” belonging to a web page owner.
- The link is associated with a “commerce object” for a merchant, where the owner, provider, and merchant are distinct third parties.
- The server automatically retrieves “pre-stored data” associated with the source page.
- The server then generates and transmits a “second web page” that includes both information about the commerce object and a plurality of “visually perceptible elements” derived from the pre-stored data that correspond to the source page.
- The complaint alleges infringement of dependent claims, which add limitations such as the use of navigational links, specific visual elements like logos, and facilitating payment (Compl. ¶20).
U.S. Patent No. 8,515,825 - “Methods of Expanding Commercial Opportunities for Internet Websites Through Coordinated Offsite Marketing”
The Invention Explained
- Problem Addressed: The ’825 Patent, which shares a specification with the ’399 Patent, addresses the same fundamental drawback of prior art affiliate programs: the "loss of the visitor to the vendor" ('825 Patent, col. 2:42-43).
- The Patented Solution: The patent describes a system, rather than a method, that provides the same solution. A computer server, operated by an outsource provider, is programmed to receive a signal when a link is activated on a host page, identify that source page, retrieve stored data corresponding to the source page’s “look and feel,” and serve a new web page that combines the merchant’s commerce information with the host’s visual elements ('825 Patent, col. 28:16-46).
- Technical Importance: This system provides hosts with "the added value and incremental revenues of traditional affiliate programs" while also enabling them "to control the customer experience before, during, and after the purchase transaction" ('825 Patent, col. 2:59-63).
Key Claims at a Glance
- The complaint asserts all claims, identifying claims 1, 11, and 17 as independent (Compl. ¶16).
- Claim 1, a system claim, includes these essential elements:
- A computer store containing data defining a plurality of visually perceptible elements for each of a plurality of first web pages.
- Each first web page belongs to a web page owner and displays a link associated with a merchant’s commerce object.
- A computer server programmed to receive an activation signal for one of the links.
- The server is programmed to automatically identify the source page, retrieve the stored data for that page, and generate a second web page displaying both the commerce object information and the retrieved visually perceptible elements.
- The complaint reserves the right to assert all dependent claims (Compl. ¶16).
U.S. Patent No. 9,043,228 - “Specially Programmed Computer Server Serving Pages Offering Commercial Opportunities for Merchants Through Coordinated Offsite Marketing”
Technology Synopsis
The ’228 Patent claims a specially programmed computer server that performs the core function of the invention. It responds to the activation of a link on a host website by retrieving stored data corresponding to that host and generating a composite page that combines the host’s look and feel with a third-party merchant’s commercial offering.
Asserted Claims
All claims, with claims 1 and 9 identified as independent (Compl. ¶16).
Accused Features
The complaint alleges that Booking.com’s server system, which generates co-branded pages for its affiliate partners, constitutes the claimed specially programmed server (Compl. ¶¶17-19).
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”
Technology Synopsis
The ’876 Patent claims both a method and a computer system for serving commerce information. The claims focus on the server’s response to a request from a visitor’s computer, wherein the server automatically serves a composite page that includes both the merchant’s commerce object and visual elements corresponding to the source host page.
Asserted Claims
All claims, with claims 1 and 11 identified as independent (Compl. ¶16).
Accused Features
The complaint alleges that Booking.com's actions of serving composite web pages through its affiliate program infringe the method claims, and its server system infringes the system claims (Compl. ¶¶17-19).
III. The Accused Instrumentality
Product Identification
The accused instrumentality is Defendant’s “Affiliate Partners programme” and the associated computer server system that operates it (Compl. ¶¶12, 17).
Functionality and Market Context
- The complaint alleges that Booking.com acts as an “outsource provider” for its affiliate partners (referred to as the “host”) (Compl. ¶17). When a visitor on an affiliate’s website clicks a customized link, their computer is redirected to a URL on Booking.com’s server system (Compl. ¶17).
- This server system allegedly recognizes the affiliate’s source page based on data in the activated URL and then “dynamically assemble[s]” a composite web page (Compl. ¶17). This composite page displays “commerce objects” from Booking.com (e.g., hotel room listings) but is designed to have the “same overall appearance” as the affiliate’s own website, thereby blending “naturally with your brand and website” (Compl. ¶¶17, 18).
- The complaint alleges this system provides a “seamless experience” that retains the host website’s visitor traffic while displaying a third-party merchant’s products, an advantage over prior art systems (Compl. ¶¶18, 19). No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
U.S. Patent 7,818,399 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method of an outsource provider serving web pages offering commercial opportunities... | Booking.com acts as an “outsource provider” through its affiliate program, serving web pages with commercial opportunities (hotel rooms, flights). | ¶17 | col. 25:67-26:2 |
| automatically at a server...in response to activation...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... | When a visitor activates a link on an affiliate's (host's) site, Booking.com's server system is activated and recognizes the source page based on data in the activated URL. | ¶17 | col. 26:3-10 |
| automatically retrieving from a storage coupled to the server pre-stored data associated with the source page... | Booking.com’s server system ensures that visually perceptible elements corresponding to the source page are displayed, such as by directing the device to download stored data (HTML, CSS) defining those elements. | ¶17 | col. 26:11-13 |
| and then automatically with the server computer-generating and transmitting...a second web page that includes...information associated with the commerce object...and a plurality of visually perceptible elements derived from the retrieved pre-stored data... | Booking.com's server dynamically assembles and serves a composite web page containing its "commerce object" (e.g., hotel listings) and visual elements that give it the "same overall appearance" as the source page. | ¶17, ¶18 | col. 26:14-22 |
U.S. Patent 8,515,825 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A system useful in an outsource provider...comprising: (a) a computer store containing data, for each of a plurality of first web pages, defining a plurality of visually perceptible elements... | Booking.com's server system contains instruction or image files in a memory or storage device defining visually perceptible elements for its multiple affiliate customers' websites. | ¶17, ¶20 | col. 28:1-5 |
| (b) a computer server at the outsource provider...programmed to: (i) receive from the web browser...a signal indicating activation of one of the links... | Booking.com's server system receives a signal when an internet visitor activates a link on a source web page controlled by a "host" (an affiliate). | ¶17 | col. 28:16-20 |
| (ii) automatically identify as the source page the one of the first web pages on which the link has been activated; | The server system recognizes the source page based on data contained in the activated URL. | ¶17 | col. 28:21-23 |
| (iv) using the data retrieved, automatically generate and transmit...a second web page that displays...information associated with the commerce object...and the plurality of visually perceptible elements visually corresponding to the source page. | The server system dynamically assembles and serves a composite web page containing Booking.com's product information while retaining the host website's overall appearance. | ¶17, ¶18 | col. 28:28-35 |
Identified Points of Contention
- Technical Questions: A central technical question will be how Booking.com’s system achieves the host’s “look and feel.” The patents describe retrieving “pre-stored data” associated with the source page. The infringement analysis may turn on whether Booking.com actually stores and retrieves specific HTML, CSS, or image files from each affiliate to construct the page, or if it uses a more generic, customizable template that merely approximates the affiliate’s branding. The complaint’s allegation of downloading “stored data (e.g., HTML and CSS instructions or image files)” suggests the former, but this will be a key point for discovery (Compl. ¶17).
- Scope Questions: A likely point of contention will be the scope of the term “composite web page.” Does the term, in the context of the patent, require the literal integration of code and assets from the host site, as described in the specification’s “look and feel capture process,” or can it be construed more broadly to cover any third-party landing page that is branded to give the “impression” of being served by the host? ('399 Patent, col. 3:23-25).
V. Key Claim Terms for Construction
The Term: "a plurality of visually perceptible elements derived from the retrieved pre-stored data and visually corresponding to the source page" (’399 Patent, Claim 1)
- Context and Importance: This term is the technological core of the invention, defining how the "look and feel" of the host site is replicated. Its construction will be critical to determining infringement, as the dispute will likely focus on whether Booking.com’s accused pages are truly “derived from... pre-stored data” associated with each specific affiliate, or are simply themed templates.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification states that the goal is to generate a page that "give[s] the viewer of the page the impression that she is viewing pages served by the host" ('399 Patent, col. 3:23-25). This language suggests that the functional outcome (the user’s impression) is paramount, which could support a broader construction not strictly tied to a specific technical implementation.
- Evidence for a Narrower Interpretation: The detailed description discloses a specific "look and fee[l] capture process" where the system captures the "header HTML" and "footer HTML" from the host page and stores these elements for later use ('399 Patent, col. 13:41-52; FIG. 6). This detailed embodiment could support a narrower construction requiring the literal capture and reuse of specific code elements from the source page.
The Term: "outsource provider" (’399 Patent, Claim 1)
- Context and Importance: The claims are framed from the perspective of an "outsource provider." Practitioners may focus on this term because the defendant's business model must fit within this definition for infringement to be found. The complaint explicitly alleges Booking.com "acts as an 'outsource provider' described in the patents" (Compl. ¶17).
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the invention as providing "outsourced electronic commerce facilities" ('399 Patent, col. 1:22-24). This suggests the term applies broadly to any third party that handles e-commerce functionality on behalf of a host website.
- Evidence for a Narrower Interpretation: The patent’s summary describes the invention as a system where an "e-commerce outsource provider" serves "dynamically constructed pages" ('399 Patent, col. 3:34-37). A defendant could argue this limits the term to entities that perform the specific dynamic page generation described, rather than any entity in an affiliate relationship.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement of infringement by Booking.com "providing in its marketing materials and... websites encouragement and direction to its customers to place links in their pages customized to interface with Booking.com's servers" (Compl. ¶21). Contributory infringement is also alleged, based on providing a server system that is a material part of the invention with no substantial non-infringing use (Compl. ¶21).
- Willful Infringement: Willfulness is alleged based on pre-suit knowledge. The complaint states that Plaintiff's counsel notified Booking.com's parent company of three of the patents in August 2015 and notified Booking.com directly in October 2015 (Compl. ¶12). The willfulness claim is further supported by the allegation that Defendant was aware of the Federal Circuit's opinion affirming the validity and infringement of the parent '399 patent and that a Booking.com representative allegedly admitted the patents were "valid in the US" (Compl. ¶¶14, 27).
VII. Analyst’s Conclusion: Key Questions for the Case
This case presents a classic dispute over the application of a patent, born from the dot-com era, to modern e-commerce affiliate systems. The analysis will likely focus on the following key questions:
- A core issue will be one of technical implementation: Does Booking.com's affiliate system function by retrieving pre-stored, host-specific data (such as HTML code or CSS files) to dynamically generate a truly "composite" page, as detailed in the patent specification, or does it use a different, non-infringing method of creating a branded landing page?
- A second key question will be one of definitional scope: Can the claim term "visually perceptible elements derived from... pre-stored data," which is rooted in the patent's description of a "look and feel capture process," be construed broadly enough to read on a system that creates a similar visual appearance through customizable templates without literally capturing and redeploying the host's source code?
- Finally, given the extensive litigation history of the parent patent and the specific allegations of pre-suit notice, a central question for damages will be one of willfulness: Does the evidence show that Booking.com acted with egregious misconduct in the face of a known risk of infringement, particularly given the prior Federal Circuit validation of the core technology?