Patent Armory Inc v. Cno Financial Group Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: CNO Financial Group, Inc. (Delaware)
  • Plaintiff’s Counsel: Garibian Law Offices, P.C.; Rabicoff Law LLC
• Case Identification: 1:24-cv-00681, D. Del., 06/10/2024
• Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant has an established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer service and communication systems infringe five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The technology at issue involves sophisticated call center management systems that use economic principles and multi-factor analysis to optimize the routing of communications to agents or other resources.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, licensing history, or other significant procedural events related to the patents-in-suit.

Case Timeline

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

U.S. Patent No. 10,237,420 - "Method and system for matching entities in an auction"

• Patent Identification: U.S. Patent No. 10237420, "Method and system for matching entities in an auction," issued March 19, 2019 (the "’420 Patent"). (Compl. ¶9).

The Invention Explained

• Problem Addressed: The patent's background describes inefficiencies in traditional call centers that use simple routing logic, such as "first-come-first-served" or basic skill matching. ('420 Patent, col. 2:42-50). These approaches can lead to mismatches where callers are connected to under-skilled or over-skilled agents, reducing transactional throughput. ('420 Patent, col. 4:35-62).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., an incoming call) with a "second entity" (e.g., a call center agent) as an auction. ('420 Patent, Abstract). Instead of simple routing rules, the system performs a "multifactorial optimization" that considers not only skills but also economic factors like the "economic surplus" of a potential match and the "opportunity cost" of making one agent unavailable for other potential matches. ('420 Patent, col. 22:1-22). This allows for a more dynamic and economically efficient allocation of resources.
• Technical Importance: This approach represents a shift from static, rules-based call distribution to a dynamic, economically-driven resource allocation model intended to improve overall call center efficiency. ('420 Patent, col. 18:8-21).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the '420 Patent but does not identify specific claims, instead incorporating by reference an external exhibit. (Compl. ¶15). The following analysis is based on independent claim 1 as a representative claim:
• A method for matching a first entity with at least one second entity, comprising:
  • defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity;
  • defining a plurality of multivalued scalar data for each of a plurality of second entities, representing characteristic parameters; and
  • performing an automated optimization with respect to an economic surplus of a match and an opportunity cost of the unavailability of the second entity for an alternate match.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 10,491,748 - "Intelligent communication routing system and method"

• Patent Identification: U.S. Patent No. 10491748, "Intelligent communication routing system and method," issued November 26, 2019 (the "’748 Patent"). (Compl. ¶10).

The Invention Explained

• Problem Addressed: The patent addresses the challenge of optimizing call center operations beyond immediate, short-term efficiency. It notes that simple routing fails to account for long-term goals such as agent training and development. ('748 Patent, col. 27:8-13).
• The Patented Solution: The invention describes a routing system that determines an optimal routing by "maximizing an aggregate utility." ('748 Patent, Abstract). This utility function considers predicted characteristics of both communication sources (e.g., callers) and targets (e.g., agents). The system can be configured to value factors like training, allowing it to route a call to a less-skilled trainee if the long-term benefit of that training experience contributes positively to the aggregate utility calculation. ('748 Patent, col. 35:30-40; Fig. 1).
• Technical Importance: The invention provides a framework for call routing that balances short-term productivity with long-term strategic objectives like workforce development, moving beyond simple cost-minimization. ('748 Patent, col. 27:8-24).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the '748 Patent without specifying them, incorporating an external exhibit by reference. (Compl. ¶21). The following analysis is based on independent claim 1 as a representative claim:
• A communications routing system, comprising:
  • a memory storing predicted characteristics of communication sources and targets, each having an economic utility; and
  • a processor configured to determine an optimal routing between the sources and targets by maximizing an aggregate utility with respect to the predicted characteristics.
• The complaint does not explicitly reserve the right to assert dependent claims.

Multi-Patent Capsules

• Patent Identification: U.S. Patent No. 7023979, "Telephony control system with intelligent call routing," issued April 4, 2006 (the "’979 Patent"). (Compl. ¶11).

• Technology Synopsis: The ’979 Patent describes a call routing system that moves beyond simple queue-based management. The invention involves receiving a communication classification and using a database of agent skills and a processor to compute an optimal agent selection, directly controlling the routing of the call within a single, integrated system. ('979 Patent, Abstract; col. 2:50-3:4).

• Asserted Claims: The complaint asserts "one or more claims" without further specification. (Compl. ¶30).

• Accused Features: The complaint alleges infringement by "Exemplary Defendant Products" identified in an external exhibit not attached to the pleading. (Compl. ¶30).

• Patent Identification: U.S. Patent No. 7269253, "Telephony control system with intelligent call routing," issued September 11, 2007 (the "’253 Patent"). (Compl. ¶12).

• Technology Synopsis: The ’253 Patent, related to the ’979 Patent, discloses a system where characteristics of communications and potential targets are stored, and an optimal target is determined through a "combinatorial optimization." The optimization considers a cost-benefit analysis and may be perturbed to provide discrimination in routing (e.g., for training purposes). ('253 Patent, Abstract; col. 6:45-7:1).

• Asserted Claims: The complaint asserts "one or more claims" without further specification. (Compl. ¶36).

• Accused Features: The complaint alleges infringement by "Exemplary Defendant Products" identified in an external exhibit not attached to the pleading. (Compl. ¶36).

• Patent Identification: U.S. Patent No. 9456086, "Method and system for matching entities in an auction," issued September 27, 2016 (the "’086 Patent"). (Compl. ¶13).

• Technology Synopsis: The ’086 Patent, related to the ’420 Patent, describes a method for matching entities by defining scalar data for a first entity (e.g., a caller) and multiple second entities (e.g., agents). The system then performs an "automated optimization" based on the "economic surplus" of a match and the "opportunity cost" of making an agent unavailable for other potential matches. ('086 Patent, Abstract).

• Asserted Claims: The complaint asserts "one or more claims" without further specification. (Compl. ¶42).

• Accused Features: The complaint alleges infringement by "Exemplary Defendant Products" identified in an external exhibit not attached to the pleading. (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

• The complaint does not identify any accused products or services by name. (Compl. ¶¶ 15, 21, 30, 36, 42). It refers generally to "Exemplary Defendant Products" that are purportedly identified in Exhibits 6 through 10, which are incorporated by reference but were not filed with the complaint. (Compl. ¶¶ 17, 26, 32, 38, 47).

Functionality and Market Context

• The complaint alleges that Defendant makes, uses, sells, and/or imports these unspecified products. (Compl. ¶¶ 15, 21, 30, 36, 42). It further alleges that Defendant’s employees internally test and use these products. (Compl. ¶¶ 16, 22, 31, 37, 43). Given the nature of the patents-in-suit and Defendant's business as a financial group, the accused instrumentalities are presumably customer service platforms, call center management software, or other communication systems that route inquiries from customers to agents or other internal resources.
• No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not provide a narrative infringement theory or factual allegations detailing how the accused products operate. Instead, for each of the five patents-in-suit, the complaint incorporates by reference external claim chart exhibits (Exhibits 6-10) that were not attached to the pleading. (Compl. ¶¶ 18, 27, 33, 39, 48). As these exhibits containing the infringement allegations are not available for analysis, a claim chart summary cannot be constructed.

• Identified Points of Contention:
  • Pleading Sufficiency: A primary point of contention may be whether the complaint satisfies the pleading standards of Federal Rule of Civil Procedure 8, as interpreted by Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal. The complaint's lack of factual allegations identifying specific accused products or describing their operation, relying instead on boilerplate language and unavailable exhibits, raises the question of whether it provides plausible grounds for its infringement claims.
  • Scope Questions: Assuming the accused instrumentalities are Defendant's customer service systems, a key question will be whether these systems perform the specific "auction" and "multifactorial optimization" functions required by the claims of the ’420 and ’086 Patents. Analysis will focus on whether standard skill-based or rules-based routing can be construed to meet these limitations.
  • Technical Questions: For the ’748, ’979, and ’253 Patents, a central technical question will concern the alleged use of an "aggregate utility" function or "combinatorial optimization." It remains to be seen what evidence Plaintiff will offer to show that Defendant’s systems go beyond simple queuing and perform the specific, economically-driven calculations recited in the claims.

V. Key Claim Terms for Construction

• The Term: "automated optimization with respect to an economic surplus" (from ’420 Patent, Claim 1)

• Context and Importance: This term is central to the inventive concept of the '420 Patent. The infringement analysis will likely depend on whether the Defendant’s system performs a calculation that can be defined as an "optimization" and whether that optimization considers a metric equivalent to "economic surplus." Practitioners may focus on this term because it appears to be a patentee-defined concept rather than a standard industry term.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification describes the optimization in broad terms as being performed with respect to "an economic surplus of a respective match... and an opportunity cost," suggesting any system that considers both the direct benefit and the cost of resource unavailability could potentially be covered. ('420 Patent, Abstract).
  • Evidence for a Narrower Interpretation: The detailed description provides specific mathematical formulas for calculating cost-utility functions, which include factors for agent cost, anticipated transaction value, and opportunity cost. ('420 Patent, col. 24:50-65). A defendant may argue that the term requires the use of such specific, multi-part economic calculations, not just general cost-benefit routing rules.

• The Term: "maximizing an aggregate utility" (from ’748 Patent, Claim 1)

• Context and Importance: This term is the core functional step of Claim 1 of the '748 Patent. The dispute will likely turn on what constitutes an "aggregate utility" and what it means to "maximize" it. The patent’s focus on balancing short-term efficiency with long-term goals like training suggests this is more than simple least-cost routing.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The abstract states the system determines an optimal routing by "maximizing an aggregate utility with respect to the respective predicted characteristics," which could be argued to cover any system that combines multiple factors (e.g., skill match, wait time, agent cost) into a single score that is then maximized. ('748 Patent, Abstract).
  • Evidence for a Narrower Interpretation: Figure 1 and the accompanying text explicitly show separate pathways for "skill-based routing" (optimizing a short-term function) and "training and skill based routing" (optimizing a long-term function), suggesting the "aggregate utility" must encompass and balance these distinct, and sometimes competing, objectives. ('748 Patent, Fig. 1; col. 35:30-40).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 Patents. (Compl. ¶¶ 25, 46). The allegations are based on the claim that 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. ¶¶ 24, 45).
• Willful Infringement: The complaint alleges "Actual Knowledge" of the ’748 and ’086 Patents based on the service of the complaint and the attached claim charts. (Compl. ¶¶ 23, 44). This allegation appears to be based on post-suit knowledge only, which may support a claim for enhanced damages for any post-filing infringement but does not allege pre-suit willfulness.

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

• A primary threshold issue will be one of pleading sufficiency: will the court find that the complaint, which lacks specific factual allegations and instead incorporates by reference unavailable exhibits, provides a plausible claim for relief under the Twombly/Iqbal standard, or will it be dismissed for failure to state a claim?
• A core issue of claim construction will be one of definitional scope: can terms such as "automated optimization with respect to an economic surplus" and "maximizing an aggregate utility" be construed to cover conventional call-routing systems, or are they limited to the specific, auction-based economic models detailed in the patent specifications?
• A central evidentiary question will be one of technical operation: what discovery evidence will emerge to show that Defendant’s financial services communication platforms actually perform the specific multi-factor, economic-based optimizations required by the patent claims, as opposed to more common forms of skill-based or priority-based routing?