Patent Armory Inc v. Bellco Credit Union

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Bellco Credit Union (Colorado)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:26-cv-00277, D. Colo., 01/23/2026
• Venue Allegations: Venue is alleged to be proper as Defendant is a Colorado corporation with an established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer service and/or internal operational systems infringe patents related to intelligent call routing and auction-based resource matching.
• Technical Context: The patents relate to optimizing the allocation of resources, such as call center agents, to incoming tasks, such as customer calls, based on multi-factor analysis.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review 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 April 4, 2006 (’979 Patent)

The Invention Explained

• Problem Addressed: Traditional call center systems that route incoming calls based on simple rules like “first-in, first-out” or “longest-idle-agent” are inefficient when agents have varying skills and expertise Compl. ¶9 ’979 Patent, col. 3:5-14 This can lead to an “under-skilled agent” being unable to handle a transaction or an “over-skilled agent” being wasted on a simple one, reducing overall throughput ’979 Patent, col. 4:26-55
• The Patented Solution: The invention proposes a communications management system that moves beyond simple rules by implementing an “intelligent switching architecture” ’979 Patent, col. 1:14-16 The system receives a “communications classification” for an incoming call, consults a database of agent skill scores and skill weights, and uses a processor to compute an “optimum agent selection” based on a cost-utility function ’979 Patent, Abstract Fig. 1 This optimization is preferably integrated into the low-level telephony control system to reduce latency and improve real-time performance ’979 Patent, col. 59:8-23
• Technical Importance: The technology represents a shift from static, queue-based call distribution to dynamic, data-driven agent matching, intended to improve the overall efficiency and effectiveness of large-scale customer service operations ’979 Patent, col. 2:17-29

Key Claims at a Glance

• The complaint asserts infringement of one or more claims, including “exemplary method claims” Compl. ¶12 The patent includes independent system claim 1 and independent method claim 10.
• Independent Claim 1 (System):
  • A communications control system having a common operating environment
  • An input for receiving call classification information
  • A data structure representing agent characteristics
  • A processor for (a) determining an optimum agent for a call based on a multivariate cost function that compares at least three agents, and (b) controlling the call routing, with both determining and routing functions performed within the common operating environment.

U.S. Patent No. 9,456,086 - "Method and system for matching entities in an auction," issued September 27, 2016 (’086 Patent)

The Invention Explained

• Problem Addressed: The patent builds on the call-routing problem, noting that simple skill-matching does not account for economic variables or the "opportunity cost" of assigning a highly capable resource to a low-value task when a high-value task may be imminent Compl. ¶10 ’086 Patent, Abstract
• The Patented Solution: The invention frames the matching problem as an automated “auction” where entities are matched based on an optimization that considers not only skill profiles but also “economic surplus” and “opportunity cost” ’086 Patent, Abstract col. 9:45-56 It proposes a method where the system defines parameters for a first entity (e.g., a caller) and multiple second entities (e.g., agents), and then performs an automated optimization to find the match that maximizes overall value, factoring in the cost of making one agent unavailable for other potential matches ’086 Patent, col. 10:49-62 Fig. 7
• Technical Importance: This technology aims to add a layer of economic modeling to resource allocation, moving beyond technical fitness to a more holistic, business-oriented optimization that can balance immediate needs with future possibilities.

Key Claims at a Glance

• The complaint asserts infringement of one or more claims Compl. ¶18
• Independent Claim 1 (Method):
  • Storing data for a first subset of entities (e.g., callers) and a second subset (e.g., agents).
  • Performing an optimization using an automated processor with respect to an "economic surplus" of a potential match.
  • The optimization also considers an "opportunity cost" related to the unavailability of an agent for an alternate match.
  • Outputting a signal based on the optimization to facilitate the match.

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentalities as the “Exemplary Defendant Products” (Compl. ¶12, ¶18).

Functionality and Market Context

• The complaint does not describe the accused products. It states that claim charts comparing the patent claims to these products are included in Exhibits 3 and 4 (Compl. ¶14, ¶23). However, these exhibits were not provided with the filed complaint. The defendant is a credit union, suggesting the accused instrumentalities may relate to its member service call center, internal task management systems, or other resource allocation platforms Compl. ¶3

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that infringement is detailed in claim charts attached as Exhibits 3 and 4, which were not provided with the pleading (Compl. ¶14, ¶23). The complaint’s narrative theory states that the “Exemplary Defendant Products practice the technology claimed” by the respective patents and that they “satisfy all elements” of the asserted claims (Compl. ¶14, ¶23). Without the referenced exhibits, a detailed claim-element analysis is not possible based on the complaint alone.

Identified Points of Contention

• ’979 Patent Scope Question: A central question may be whether the defendant’s system for directing member inquiries performs the specific, computationally intensive "optimum agent selection" based on a "multivariate cost function" as required by the claims ’979 Patent, Claim 1, or if it uses a more conventional, rules-based system (e.g., routing based on a single factor like account type) that may fall outside the claim scope.
• ’086 Patent Scope Question: The infringement analysis for the ’086 Patent may turn on whether the defendant’s internal processes can be properly characterized as an "auction" that calculates "economic surplus" and "opportunity cost" ’086 Patent, Claim 1 The parties may dispute whether a routine assignment of a task to an available employee constitutes the claimed auction-based optimization.
• Technical Question: A key factual question will be what evidence demonstrates that the accused systems actually perform the claimed optimization steps. The dispute may focus on whether the systems dynamically calculate an optimal outcome among multiple competing options in real-time, as taught in the patents, or whether they follow a predetermined, static decision tree.

V. Key Claim Terms for Construction

For the ’979 Patent

• The Term: “multivariate cost function” (from Claim 1)
• Context and Importance: This term is the core of the claimed optimization. The patent’s validity and infringement arguments will depend on its scope. Practitioners may focus on this term because it distinguishes the invention from simpler routing systems.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the function can incorporate a wide array of "disparate factors" normalized into a common metric of "cost," including agent salary, training costs, and even anticipated business outcomes like sales volume or customer satisfaction ’979 Patent, col. 65:4-44
  • Evidence for a Narrower Interpretation: The detailed description provides a specific formula: An=Max[Acn1∑(rs1ans1)+Acn2], which includes terms for agent skill scores, skill weights, and two distinct agent cost factors ’979 Patent, col. 65:1-5 A defendant may argue that the term should be limited to functions incorporating these specific types of variables.

For the ’086 Patent

• The Term: “auction” (from Claim 1)
• Context and Importance: This term defines the entire framework of the claimed method. Whether the defendant’s system performs an "auction" will likely be a dispositive issue.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the auction concept in the context of matching callers to agents, where the "bids" may not be explicit financial offers but rather calculations of suitability and cost performed by the system to resolve a resource allocation contest ’086 Patent, col. 9:45-56
  • Evidence for a Narrower Interpretation: The specification also discusses scenarios where potential recipients "submit a bid for the call" and the winner is determined based on a "payment to or from the recipient" ’086 Patent, col. 73:11-17 This could support an argument that the term requires an actual bidding mechanism and a potential economic transfer, not just an internal system optimization.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’086 Patent, stating that the Defendant distributes "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes" Compl. ¶21 The specific materials are referenced in the unprovided Exhibit 4 Compl. ¶21 The complaint also alleges inducement based on selling the accused products to customers for infringing use Compl. ¶22
• Willful Infringement: The complaint alleges that service of the complaint itself provides "actual knowledge of infringement" and that any continued infringement is willful Compl. ¶20-21 This suggests a theory of post-suit willful infringement.

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

1. Definitional Scope: A primary issue will be whether the technical and economic terms used in the patents, such as “auction,” “economic surplus,” and “multivariate cost function,” can be construed broadly enough to read on the internal customer service and operational systems of a financial institution like a credit union.
2. Evidentiary Sufficiency: Given that the complaint's infringement allegations rely entirely on incorporating by reference exhibits that were not publicly filed, a central question will be what technical evidence Plaintiff can produce to show that the accused systems perform the specific, multi-step optimization methods required by the claims, as opposed to more conventional, non-infringing methods of routing customer inquiries.
3. Technological Application: The case may explore the fundamental applicability of patents drafted in the context of for-profit, high-volume call centers to the member-service operations of a credit union, raising questions about whether concepts like "cost-utility" and "economic surplus" function in the same manner in a different business environment.