DCT
1:17-cv-00502
DDR Holdings LLC v. Travel Holdings Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: DDR Holdings, LLC (Georgia)
- Defendant: Travel Holdings, Inc. and Tourico Holidays, Inc. (Delaware/Florida)
- Plaintiff’s Counsel: Farnan LLP
- Case Identification: 1:17-cv-00502, D. Del., 05/02/2017
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant Travel Holdings, Inc. is a Delaware corporation that resides in the district and conducts substantial business there, including providing services to customers such as Sam's Club, which operates a store in Dover, Delaware.
- Core Dispute: Plaintiff alleges that Defendant’s white-label travel website program infringes four patents related to methods and systems for generating a composite web page that combines a third-party merchant's e-commerce offerings with the visual branding elements of a "host" website.
- Technical Context: The technology addresses the problem of e-commerce "affiliate" programs that divert a user away from a host website to a merchant's site, thereby causing the host to lose visitor traffic.
- Key Procedural History: The complaint highlights prior litigation involving U.S. Patent No. 7,818,399, the parent patent of the asserted family. In that case, a jury found the patent infringed and not invalid, a verdict affirmed by the U.S. Court of Appeals for the Federal Circuit in DDR Holdings, LLC v. Hotels.com, L.P., which also held the patent claimed eligible subject matter. The complaint notes that the other three patents-in-suit issued from the U.S. Patent and Trademark Office after that litigation, which may inform the analysis of their validity and scope.
Case Timeline
| Date | Event |
|---|---|
| 1998-09-17 | Earliest Priority Date Claimed by Patents-in-Suit |
| 2006-01-01 | Plaintiff files "Texas Suit" on parent patents |
| 2010-10-19 | U.S. Patent 7,818,399 Issues |
| 2012-10-01 | "Texas Suit" goes to trial on the ’399 Patent |
| 2013-06-01 | Judgment entered in "Texas Suit" |
| 2013-08-20 | U.S. Patent 8,515,825 Issues |
| 2014-12-01 | Federal Circuit affirms judgment in "Texas Suit" |
| 2015-01-01 | Alleged Infringing Conduct Begins |
| 2015-05-26 | U.S. Patent 9,043,228 Issues |
| 2015-11-06 | Plaintiff's counsel sends first notice letter to Defendant |
| 2017-05-02 | U.S. Patent 9,639,876 Issues |
| 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
- Issued: October 19, 2010
The Invention Explained
- Problem Addressed: The patent’s background section describes a fundamental drawback of prior art "affiliate programs" where a host website operator would lose visitor traffic when a user clicked on a third-party merchant's advertisement, as the user would be taken away from the host's site entirely (’399 Patent, col. 2:37-43).
- The Patented Solution: The invention solves this problem by, upon activation of a link on the host website, generating a new, composite web page. This new page is served by an "outsource provider" but is designed to incorporate the "look and feel" of the host's website while simultaneously displaying the third-party merchant’s product information, giving the user the impression they are still on the host's site (’399 Patent, col. 3:15-25).
- Technical Importance: This approach enabled host websites to participate in affiliate marketing and generate commission revenue without ceding their "hard-won visitor traffic" to third-party merchants (’399 Patent, col. 2:67).
Key Claims at a Glance
- The complaint asserts independent claim 1 and dependent claims 3-11, 13-16, and 18 (Compl. ¶15).
- The essential elements of independent claim 1 are:
- A method of an outsource provider serving web pages offering commercial opportunities.
- Automatically, at a server of the outsource provider, recognizing the source page on which a link was activated.
- Automatically retrieving from storage pre-stored data associated with the source page.
- Automatically generating and transmitting a second web page that includes (i) information associated with a commerce object linked to the activation and (ii) a plurality of visually perceptible elements derived from the retrieved pre-stored data that visually corresponds to the source page.
U.S. Patent No. 8,515,825 - Methods of expanding commercial opportunities for internet websites through coordinated offsite marketing
- Issued: August 20, 2013
The Invention Explained
- Problem Addressed: As a continuation of the application leading to the ’399 Patent, the ’825 Patent shares an identical specification and addresses the same problem of visitor traffic diversion in affiliate e-commerce systems (’825 Patent, col. 2:37-43).
- The Patented Solution: The patented solution is materially the same as that described for the ’399 Patent: generating a composite web page that maintains the host's "look and feel" while presenting a third-party's commercial content, thereby creating a transparent and context-sensitive e-commerce experience for the user (’825 Patent, col. 3:15-25).
- Technical Importance: As with the ’399 Patent, this technology allowed website publishers to monetize traffic through affiliate links without losing the visitor to the merchant's website (’825 Patent, col. 2:67).
Key Claims at a Glance
- The complaint asserts independent claims 1, 11, and 17, and all dependent claims (Compl. pp. 5-6).
- The essential elements of independent claim 1 are:
- A method of an outsource provider serving web pages, upon receiving an electronic request from a visitor computer generated by the selection of a URL within a source web page on a first website.
- Automatically, with a server computer, retrieving pre-stored data.
- Automatically, with the server computer, serving to the visitor computer a composite web page of a second website.
- The composite web page includes (i) information associated with a commerce object (including at least one product for sale) and (ii) a plurality of visually perceptible elements derived from the retrieved pre-stored data that defines an overall appearance visually corresponding to the source web page.
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
The ’228 Patent is a continuation of the application leading to the ’825 Patent and shares the same specification (Compl. ¶9). It is directed to the same technical problem of preventing visitor diversion and solves it by generating a composite, co-branded webpage that maintains the host site's "look and feel."
Asserted Claims & Accused Features
- Asserted Claims: The complaint asserts all claims, including independent claims 1 and 9 (Compl. p. 5).
- Accused Features: The accused features are the specific functionalities of Defendant's white-label program that allegedly generate composite travel websites for affiliates (Compl. ¶16-17).
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
The ’876 Patent is a continuation of the application leading to the ’228 Patent and shares the same specification (Compl. ¶9). It addresses the same technical problem and claims a solution involving the generation of a composite webpage that retains the host website’s branding while displaying third-party content.
Asserted Claims & Accused Features
- Asserted Claims: The complaint asserts all claims, including independent claims 1 and 11 (Compl. ¶15).
- Accused Features: The accused features are the operations of Defendant's white-label program, which allegedly generates co-branded travel websites for its affiliate partners (Compl. ¶16-17).
III. The Accused Instrumentality
Product Identification
The accused instrumentality is Defendant Travel Holdings' "white-label program" (Compl. ¶16).
Functionality and Market Context
The complaint alleges that Travel Holdings acts as an "outsource provider" for its affiliates, such as Sam's Club (Compl. ¶16-17). When a user on an affiliate's (host's) website activates a link, the user's computer is redirected to Travel Holdings' server system (Compl. ¶17). That system then allegedly serves a "composite web page" that is "dynamically assembled" to combine visual elements corresponding to the host's page (e.g., logos, colors, fonts) with "commerce objects" (e.g., hotel rooms, flights) offered by various merchants (Compl. ¶17, ¶19). The resulting page is alleged to have the "same overall appearance" as the host's website, creating a "seamless integration" that gives the user the impression they are still viewing pages served by the host (Compl. ¶18-19). The complaint states that Travel Holdings claims to have 200 white-label affiliates (Compl. ¶16). 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 method of an outsource provider serving web pages offering commercial opportunities... | Travel Holdings acts as an "outsource provider" that owns or controls a computer server system serving displayable web pages with commercial opportunities. | ¶17 | col. 1:19-25 |
| automatically at a server of the outsource provider... recognizing as the source page the one of the first web pages on which the link has been activated; | Travel Holdings' server system works... by recognizing the source page on which the link was activated based on data contained in the activated URL. | ¶17 | col. 3:10-14 |
| automatically retrieving from a storage coupled to the server pre-stored data associated with the source page; | Travel Holdings' server system... by directing the visitor's device to download through the Internet certain stored data (e.g., HTML and CSS instructions or image files) defining the visually perceptible elements. | ¶17 | col. 3:15-20 |
| and then 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... and (ii) a plurality of visually perceptible elements derived from the retrieved pre-stored data and visually corresponding to the source page. | In response to activation of that link, Travel Holdings' server system then serves to the visitor's device instructions for displaying a composite web page... that combines certain visual elements (e.g., logo, background color, and fonts) of a "host" website... with content of a non-Travel Holdings merchant. | ¶17, ¶19 | col. 3:20-25 |
’825 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method of an outsource provider serving web pages, upon receiving over the Internet an electronic request generated by a visitor computer in response to selection of a uniform resource locator (URL) within a source web page... | When Internet visitors activate a link... on a source web page controlled by a "host,"... the Internet visitor's computer is redirected to a URL at which Travel Holdings' server system is accessible. | ¶17 | col. 1:19-25 |
| (a) automatically, with a server computer associated with a second website, retrieving data pre-stored in a storage device... | Travel Holdings' server system ensures that many visually perceptible elements that visually correspond to the source page are displayed to the user, such as by directing the visitor's device to download through the Internet certain stored data... | ¶17 | col. 3:15-20 |
| (b) automatically, with the server computer, serving to the visitor computer a composite web page of the second website, which composite web page includes: (i) information associated with the commerce object... and (ii) a plurality of visually perceptible elements derived from the retrieved pre-stored data... | Travel Holdings' server system then serves to the visitor's device instructions for displaying a composite web page... The composite page is dynamically assembled... [and] combines certain visual elements... of a "host" website... with content of a non-Travel Holdings merchant. | ¶17, ¶19 | col. 3:20-25 |
Identified Points of Contention
- Scope Questions: A central question may be whether the accused "dynamically assembled" composite page meets the claim requirement of being generated from "pre-stored data associated with the source page." The analysis may focus on whether the "stored data (e.g., HTML and CSS instructions or image files)" alleged in the complaint (Compl. ¶17) is sufficiently "associated with the source page" as required by the claims, or if it is merely a generic template applied to all affiliates.
- Technical Questions: The complaint alleges the server recognizes the source page "based on data contained in the activated URL" (Compl. ¶17). A factual question for the court will be what technical evidence demonstrates that this mechanism performs the specific function of "recognizing the source page" to then retrieve corresponding "pre-stored data," as opposed to simply passing a branding identifier to a templating engine.
V. Key Claim Terms for Construction
"visually perceptible elements"
- Context and Importance: This term defines the "look and feel" that is preserved from the host website to the composite page. Its construction is critical because the degree of visual correspondence required between the host page and the composite page is a core element of the invention and a likely point of dispute in the infringement analysis.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification provides a non-exhaustive list of examples, stating that such elements "include 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," which suggests the term is not limited to a specific, enumerated set of features (’399 Patent, col. 13:9-12).
- Evidence for a Narrower Interpretation: The specification describes a specific process of capturing the "header... HTML" and "footer... HTML" of a host's page (’399 Patent, col. 13:41-49). A party may argue that "visually perceptible elements" should be construed as being limited to these specific, captured structural components of a webpage, rather than more general branding attributes like color schemes or fonts.
"outsource provider"
- Context and Importance: The asserted claims are directed to methods and systems operated by an "outsource provider." Therefore, whether the defendant's business model and technical system fall within the patent's definition of this term is a threshold question for infringement.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent describes the invention in broad terms as "a system and method for computer based information providers to receive outsourced electronic commerce facilities in a context sensitive, transparent manner" (’399 Patent, col. 1:22-25). This language could support a broad definition covering any third party that provides white-labeled e-commerce functionality.
- Evidence for a Narrower Interpretation: The detailed description discloses a specific three-tier architecture for the provider's system (Web server layer, application server layer, and database server layer) (’399 Patent, col. 4:36-40). A party could argue that to qualify as an "outsource provider" under the patent, one must practice the invention using this disclosed architecture, potentially narrowing the term's scope.
VI. Other Allegations
Indirect Infringement
In the alternative to direct infringement, the complaint alleges induced infringement, stating that Travel Holdings encourages its customers to place customized links on their pages to interface with its servers through its "marketing materials and above-referenced websites" (Compl. ¶21). It also alleges contributory infringement by providing a server system that constitutes a material part of the invention and has "no substantially non-infringing use" (Compl. ¶21).
Willful Infringement
The complaint alleges willfulness based on pre-suit knowledge. It asserts that Plaintiff's counsel sent letters to Travel Holdings' CEO beginning on November 6, 2015, which identified the patents-in-suit and provided copies (Compl. ¶12). The willfulness allegation is further supported by Defendant's alleged knowledge of the Federal Circuit's opinion in the Hotels.com case and its subsequent failure to respond to multiple inquiries from Plaintiff (Compl. ¶12-14, ¶27).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of claim scope: can the phrase "visually perceptible elements derived from... pre-stored data associated with the source page" be construed to cover the accused system, which allegedly uses stored branding assets (like CSS and image files) to "dynamically assemble" a composite page that has the "same overall appearance" as the host's site?
- A key evidentiary question will be one of technical implementation: what evidence will be presented to demonstrate that the accused system technically performs the claimed step of "recognizing" a specific source page and retrieving data "associated with" that page, as opposed to applying a more generic, pre-assigned template for each affiliate partner?