Patent Armory Inc v. Bhi Residential Long Term Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: BHI Residential Long Term Corporation (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:25-cv-01824, D. Colo., 06/11/2025
• Venue Allegations: Venue is asserted based on Defendant maintaining an established place of business in the District of Colorado.
• Core Dispute: Plaintiff alleges that Defendant’s unspecified “Exemplary Defendant Products” infringe two patents related to intelligent call routing and auction-based entity matching.
• Technical Context: The patents address technologies for optimizing resource allocation in communications systems, such as call centers, by using multi-factor analysis to match incoming requests with the most suitable service agents.
• Key Procedural History: The complaint does not allege any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.

Case Timeline

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

U.S. Patent No. 7,023,979 - “Telephony Control System With Intelligent Call Routing,” issued Apr. 4, 2006

The Invention Explained

• Problem Addressed: The patent describes inefficiencies in traditional call centers that use simple routing logic, such as connecting a caller to the longest-idle agent. This can result in routing a complex call to an "under-skilled agent" or having a highly trained "over-skilled agent" handle a simple task, which reduces the call center's overall transactional throughput (’979 Patent, col. 3:5-4:38).
• The Patented Solution: The invention claims a communications management system that intelligently routes calls by matching the needs of the caller with the specific skills of the available agents. A processor computes an "optimum agent selection" using a "multivariate cost function" that considers agent skills and call characteristics, and then directly controls the routing of the call (’979 Patent, Abstract; col. 5:28-44). This creates "implicit teams" of agents based on skills rather than static, predefined groups (’979 Patent, col. 5:35-38).
• Technical Importance: The technology aimed to improve call center efficiency by moving from static agent groups and simple queuing to dynamic, data-driven, skill-based matching of callers to agents (’979 Patent, col. 4:1-4).

Key Claims at a Glance

• The complaint asserts infringement of unspecified "exemplary claims" of the '979 Patent (Compl. ¶12). Independent claim 1, a system claim, is representative and includes the following essential elements:
  • a communications management system, having a common operating environment, comprising:
  • an input for receiving call classification information;
  • a data structure representing agent characteristics;
  • a processor for (a) determining, with respect to the received call classification information, an optimum agent for association with a call... based on a multivariate cost function comparing at least three agents... and (b) controlling a call routing of the call in dependence on the determination...

U.S. Patent No. 9,456,086 - “Method and system for matching entities in an auction,” issued Sep. 27, 2016

The Invention Explained

• Problem Addressed: The patent addresses inefficiencies in matching systems, such as auctions, where pairing is based on simple, one-dimensional criteria (e.g., highest bid). Such systems fail to account for the complex characteristics of the entities being matched or the broader economic consequences of a particular pairing (’086 Patent, col. 1:20-2:66).
• The Patented Solution: The invention claims a method for matching a "first entity" with a "second entity" from a pool of candidates. It defines profiles for each entity using "multivalued scalar data" and performs an automated optimization to select a match. This optimization considers not only the "economic surplus" of a potential pairing but also the "opportunity cost" associated with the unavailability of the selected second entity for matching with an alternate first entity (’086 Patent, Abstract; Fig. 6).
• Technical Importance: The technology provides a framework for creating sophisticated, auction-based markets that optimize pairings based on multi-factor profiles and economic considerations beyond simple price discovery (’086 Patent, col. 13:64-65).

Key Claims at a Glance

• The complaint asserts infringement of unspecified "exemplary claims" of the '086 Patent (Compl. ¶21). Independent claim 1, a method claim, is representative and includes the following essential elements:
  • A method for matching a first subset... with a second subset... comprising:
  • storing in a memory a plurality of multivalued scalar data representing inferential targeting parameters for the first subset;
  • storing in the memory a plurality of multivalued scalar data... representing respective characteristic parameters for each respective second entity;
  • performing, using an automated processor, an optimization with respect to at least an economic surplus of a respective mutually exclusive match... and an opportunity cost of the unavailability of the second subset for matching with an alternate subset...; and
  • outputting a signal in dependence on the optimization.

III. The Accused Instrumentality

Product Identification

• The complaint does not identify any specific accused products, methods, or services by name, referring only to “Exemplary Defendant Products” (Compl. ¶12, ¶21).

Functionality and Market Context

• The complaint provides no description of the technical functionality, features, or operation of the accused products. It alleges that Defendant makes, uses, sells, and imports these products in the District of Colorado (Compl. ¶12, ¶21). No allegations are made regarding the products' commercial importance or market positioning.
• No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

U.S. Patent No. 7,023,979 Infringement Allegations

The complaint alleges that the infringement theory is detailed in claim charts attached as Exhibit 3; however, this exhibit was not provided with the filed complaint (Compl. ¶17, ¶18). The complaint’s narrative theory of infringement is conclusory, stating that the “Exemplary Defendant Products practice the technology claimed by the ’7023979 Patent” and “satisfy all elements of the Exemplary ’7023979 Patent Claims” (Compl. ¶17).

Identified Points of Contention

• Scope Questions: The absence of any identification of the accused products raises the threshold question of whether Defendant makes or sells any products that operate in the field of telephony or call routing.
• Technical Questions: What evidence does the complaint provide that the unspecified accused products perform the functions required by Claim 1, such as receiving “call classification information,” maintaining a “data structure representing agent characteristics,” and using a processor to execute a “multivariate cost function” to determine an optimum agent?

U.S. Patent No. 9,456,086 Infringement Allegations

The complaint alleges that the infringement theory is detailed in claim charts attached as Exhibit 4; however, this exhibit was not provided with the filed complaint (Compl. ¶26, ¶27). The complaint’s narrative theory of infringement states that the “Exemplary Defendant Products practice the technology claimed by the ’086 Patent” and “satisfy all elements of the Exemplary ’086 Patent Claims” (Compl. ¶26).

Identified Points of Contention

• Scope Questions: The infringement analysis raises the question of what constitutes the “first entity,” “second entity,” and “auction” within the functionality of the unspecified accused products.
• Technical Questions: What evidence does the complaint provide that the accused products perform the specific optimization required by Claim 1, which must account for both “economic surplus” and “opportunity cost”?

V. Key Claim Terms for Construction

For the ’979 Patent:

• The Term: "multivariate cost function" (from Claim 1)
• Context and Importance: This term is central to the claimed invention's "intelligent" routing capability. The outcome of the infringement analysis may depend on whether this term is construed broadly to cover any algorithm considering multiple factors, or narrowly to require a specific type of economic cost-benefit calculation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes optimizing for variables such as "greatest efficiency, lowest cost, or other optimized variable," which may support a construction that encompasses a wide range of multi-factor analyses (’979 Patent, col. 4:1-4).
  • Evidence for a Narrower Interpretation: The patent’s figures and description refer to optimizing a "cost-utility function," which could support a narrower construction requiring a formal calculation of costs and benefits, not merely a consideration of multiple variables (’979 Patent, Fig. 1, items 308, 312).

For the ’086 Patent:

• The Term: "economic surplus" and "opportunity cost" (from Claim 1)
• Context and Importance: These terms define the specific type of optimization the claimed method performs. Practitioners may focus on these terms because they are established terms of art in economics, and the infringement dispute may turn on whether the accused system performs calculations that meet these specific economic definitions.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification discloses that the claimed auction is sensitive to both "economic factors and non-economic factors," which could support a more flexible interpretation of what qualifies as an "economic surplus" calculation (’086 Patent, col. 13:64-65).
  • Evidence for a Narrower Interpretation: The abstract links these terms to an "automated optimization," suggesting a formal, calculable process is required (’086 Patent, Abstract). A defendant may argue that this requires a specific computation of consumer and producer surplus and the value of the next-best alternative, rather than a more general balancing of factors.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for both patents. The basis for inducement is the allegation that Defendant distributes "product literature and website materials inducing end users... to use its products in the customary and intended manner that infringes" the patents (Compl. ¶15, ¶24). Knowledge and intent for inducement are alleged to arise "at least since being served by this Complaint" (Compl. ¶16, ¶25).
• Willful Infringement: The complaint does not use the term "willful." However, it alleges that service of the complaint constitutes "Actual Knowledge of Infringement" and that "Despite such actual knowledge, Defendant continues to make, use, test, sell, offer for sale, market, and/or import" infringing products (Compl. ¶14-15, ¶23-24). These allegations may form a basis for a claim of post-filing willfulness.

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

• A primary threshold issue will be one of factual sufficiency: can infringement allegations that fail to identify a single accused product by name or describe any of its specific functionalities survive a motion to dismiss under the plausibility standard required by federal pleading rules?
• A central technical question will be one of definitional scope: assuming an accused product is identified, can the patents' core concepts of a "multivariate cost function" (’979 Patent) and an optimization of "economic surplus" and "opportunity cost" (’086 Patent) be construed to cover the actual, yet-to-be-disclosed, functionality of Defendant's products, or will there be a fundamental mismatch in technical operation?