The US Court of Appeals for the Federal Circuit affirmed a district court judgment of noninfringement, finding that deleting a portion of a definition between a provisional application and a nonprovisional application was evidence that the patentee intended to exclude the deleted language from the claim scope. DDR Holdings, LLC v. Priceline.com LLC and Booking.com B.V., Case Nos. 23-1176; -1177 (Fed. Cir. Dec. 9, 2024) (Chen, Mayer, Cunningham, JJ.)

DDR owns a patent directed to an e-commerce system involving “‘three main parties’ aside from the end consumer: merchants, hosts, and outsource providers.” The specification describes merchants as “the producers, distributors, or resellers of the goods to be sold through the outsource provider.”

DDR sued Priceline for infringement of four patents. In response, Priceline sought inter partes review (IPR), after which three of the challenged patents were found to be unpatentable. The Patent Trial & Appeal Board found that the fourth challenged patent was patentable over the cited prior art. Although the Board’s determination did not turn on the meaning of the term “merchants,” the Board construed “merchants” as “producers, distributors, or resellers of the goods or services to be sold.” In doing so, the Board applied the then applicable  “broadest reasonable interpretation” standard.

In the district court case, Priceline proposed that, consistent with the specification, “merchants” should be construed as only including purveyors of goods, while DDR sought to also include purveyors of services. The district court agreed with Priceline and adopted a construction that excluded services. Following the district court’s claim construction, the parties stipulated to noninfringement, agreeing that the court’s construction was case-dipositive in Priceline’s favor on the issue of infringement. DDR appealed.

The Federal Circuit affirmed. The Court reviews “claim construction based on intrinsic evidence de novo and review[s] any findings of fact regarding extrinsic evidence for clear error.” With only two exceptions, the Court gives terms “their plain and ordinary meanings to one of skill in the art when read in the context of the specification or during prosecution.” The exceptions are “when a patentee sets out a definition and acts as his own lexicographer” and “when the patentee disavows the full scope of a claim term either in the specification or during prosecution.”

Here, the provisional application for the asserted patent discussed merchants as both “producers of ‘goods’ in one instance, and ‘products or services’ in another.” The asserted patent did not mention services in relation to merchants, instead limiting “merchant” to purveyor of goods. The Federal Circuit found that a skilled artisan would interpret the deletion of the reference to “products or services” between the provisional application and the asserted patent as “indicat[ing] an evolution of the applicant’s intended meaning of the claim term.” The Court found that this was reinforced by the description that limited merchants to purveyors of goods.

DDR argued that incorporating the provisional application by reference into the specification resulted in “one document” and therefore no deletion took place. However, the Federal Circuit did not find this argument persuasive, explaining [...]

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