Patent Armory Inc v. Live Nation Entertainment Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Live Nation Entertainment, Inc. (Delaware)
  • Plaintiff’s Counsel: Garibian Law Offices, P.C.; Rabicoff Law LLC
• Case Identification: 1:24-cv-01137, D. Del., 10/13/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant has an established place of business in the District of Delaware and has committed acts of patent infringement within the district.
• Core Dispute: Plaintiff alleges that Defendant’s systems for customer communications and resource allocation infringe five patents related to intelligent call routing and auction-based methods for matching entities.
• Technical Context: The patents relate to optimizing the allocation of resources in telecommunications systems, such as routing callers to the most appropriate agent in a call center, a key technology for managing large-scale customer service operations.
• Key Procedural History: The complaint does not reference any prior litigation, licensing history, or post-grant proceedings involving 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” (Issued March 19, 2019)

The Invention Explained

• Problem Addressed: Traditional call center management systems, such as Automatic Call Distributors (ACDs), often use simplistic routing methods like first-come-first-served, which are inefficient when agents have varying skills and customers have diverse needs (Compl. Ex. 1, ’420 Patent, col. 2:44-52). This can lead to mismatches, such as routing a complex technical call to a junior agent, increasing costs and decreasing customer satisfaction.
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., a caller) to a "second entity" (e.g., an agent) as a formal auction (’420 Patent, col. 1:1-6). It performs an "automated optimization" that considers not only the direct value of a potential match (the "economic surplus") but also the "opportunity cost" of making that specific agent unavailable for other potential matches (’420 Patent, Abstract). This allows the system to make more globally efficient routing decisions in real-time.
• Technical Importance: This approach applies economic and game-theory principles to the technical problem of resource allocation in a communications network, aiming to move beyond simple skill-matching to a more holistic, utility-maximizing framework (Compl. Ex. 1, ’420 Patent, col. 21:50-22:15).

Key Claims at a Glance

• The complaint asserts at least exemplary method claims (Compl. ¶15). Independent claim 1 is representative:
  • A method for matching a first entity with at least one second entity selected from a plurality of second entities, comprising:
  • defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity and a plurality of multivalued scalar data of each of the plurality of second entities...; and
  • performing an automated optimization with respect to an economic surplus of a respective match of the first entity with the at least one of the plurality of second entities, and an opportunity cost of the unavailability of the at least one... for matching with an alternate first entity.

U.S. Patent No. 10,491,748 - “Intelligent communication routing system and method” (Issued November 26, 2019)

The Invention Explained

• Problem Addressed: The patent describes the inefficiencies of "static grouping" in call centers, where agents are divided into fixed teams (’748 Patent, col. 5:1-9). This rigidity causes problems with "under-skilled agents" (who cannot handle a call) and "over-skilled agents" (whose advanced skills are wasted on simple calls), both of which reduce a call center's overall throughput (’748 Patent, col. 4:35-50).
• The Patented Solution: The invention discloses a routing system that determines an optimal routing path by "maximizing an aggregate utility." It represents both communications sources (e.g., callers) and communications targets (e.g., agents) with predicted characteristics and uses these predictions to calculate an optimal match based on both economic and non-economic factors (’748 Patent, Abstract). This allows for a more dynamic and intelligent allocation of resources than traditional routing systems.
• Technical Importance: The system aims to create a more dynamic and globally optimized call routing environment by applying a cost-utility function that can account for factors beyond simple skill matching, such as agent training opportunities and long-term operational efficiency (’748 Patent, col. 23:23-24:40).

Key Claims at a Glance

• The complaint asserts one or more claims of the ’748 Patent (Compl. ¶21). Independent claim 1 is representative:
  • A communications routing system, comprising a router for:
  • representing a plurality of predicted characteristics of a plurality of communications sources, each having an economic utility;
  • representing a plurality of predicted characteristics of a plurality of communications targets each having an economic utility; and
  • determining an optimal routing between the plurality of communications sources and the plurality of communications targets, by maximizing an aggregate utility with respect to the respective predicted characteristics...

U.S. Patent No. 7,023,979 - “Telephony control system with intelligent call routing” (Issued April 4, 2006)

• Technology Synopsis: This patent addresses the problem of inefficient call routing in telephony systems (Compl. ¶11). The invention describes a control system that uses a database of agent skills and a "cost-utility function" to optimize the matching of callers to agents, considering factors such as agent skill level, training opportunities, and call center capacity.
• Asserted Claims: One or more exemplary method claims are asserted (Compl. ¶30).
• Accused Features: The complaint alleges that "Exemplary Defendant Products" practice the technology of the ’979 Patent (Compl. ¶30).

U.S. Patent No. 7,269,253 - “Telephony control system with intelligent call routing” (Issued September 11, 2007)

• Technology Synopsis: As a continuation of the ’979 patent, this patent also describes a telephony control system for intelligent call routing (Compl. ¶12). It focuses on a combinatorial optimization method to determine the best pairing of communications with available agents, based on the characteristics of both the calls and the agents.
• Asserted Claims: One or more exemplary method claims are asserted (Compl. ¶36).
• Accused Features: The complaint alleges that "Exemplary Defendant Products" practice the technology of the ’253 Patent (Compl. ¶36).

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

• Technology Synopsis: This patent, related to the ’420 patent, describes a method for matching entities in an auction format (Compl. ¶13). It details a system that defines inferential targeting parameters for a "first entity" and characteristic parameters for a plurality of "second entities" and performs an automated optimization to determine the best match based on economic surplus and opportunity cost.
• Asserted Claims: One or more exemplary claims are asserted (Compl. ¶42).
• Accused Features: The complaint alleges that "Exemplary Defendant Products" practice the technology of the ’086 Patent (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused products or services by name. It refers generally to "Exemplary Defendant Products" that are identified in claim chart exhibits (Compl. ¶15, ¶21, ¶30, ¶36, ¶42).

Functionality and Market Context

The complaint alleges that Defendant makes, uses, offers to sell, sells, and/or imports the accused products, and that Defendant's employees internally test and use them (Compl. ¶15-16). The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific functionality or market context, as it relies entirely on exhibits that were not attached to the publicly filed document.

IV. Analysis of Infringement Allegations

The complaint alleges infringement of all five patents-in-suit by incorporating by reference claim charts provided in Exhibits 6, 7, 8, 9, and 10, respectively (Compl. ¶18, ¶27, ¶33, ¶39, ¶48). These exhibits were not attached to the publicly filed complaint. The complaint itself does not provide a narrative description of the infringement theories or map specific product features to claim elements.

Identified Points of Contention

• Scope Questions: Given the patents’ use of economic terms like "auction," "economic surplus," and "utility," a potential point of contention may be whether Defendant's routing logic, even if sophisticated, performs the specific type of formalized, auction-based optimization required by the claims. The analysis may raise the question of whether a general-purpose algorithm that improves efficiency can be read to practice a claimed "auction."
• Technical Questions: A central technical question will be what evidence exists that Defendant's systems perform the multi-factorial optimizations described in the patents. For instance, with respect to the ’420 Patent, the analysis may question what evidence the complaint provides that the accused system calculates an "opportunity cost" for each potential call-agent pairing, as opposed to simply using a skill-based or priority-based routing rule.

V. Key Claim Terms for Construction

For the ’420 Patent

The Term: "automated optimization with respect to an economic surplus"

Context and Importance: This term appears in the independent claims and defines the core inventive concept of applying a formal economic framework to resource matching. The outcome of the case may hinge on whether this term is construed broadly to cover any algorithm that improves efficiency, or narrowly to require a specific, auction-like calculation of value and cost.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The specification's background discussion focuses generally on the goal of making "efficient use of call center resources," which might support a construction covering a wide range of efficiency-improving algorithms (Compl. Ex. 1, ’420 Patent, col. 2:34-35).
• Evidence for a Narrower Interpretation: The detailed description repeatedly frames the invention in the context of an "auction" and discusses specific economic calculations, including formulae for determining a "cost-utility function," which may support a narrower construction requiring these specific features (Compl. Ex. 1, ’420 Patent, col. 23:23-24:67).

For the ’748 Patent

The Term: "maximizing an aggregate utility"

Context and Importance: This term is central to the independent claims of the ’748 Patent and represents the goal of the claimed routing determination. The dispute may turn on the definition of "utility" and the evidentiary standard for proving that the accused system is, in fact, "maximizing" it, as opposed to merely improving it.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The abstract describes the goal as determining an "optimal routing," which could be interpreted as simply finding the "best" available path according to a set of rules, potentially broadening the term's scope (’748 Patent, Abstract).
• Evidence for a Narrower Interpretation: The specification provides a detailed five-part mathematical formula to represent the cost-utility function, suggesting that "maximizing an aggregate utility" may require a specific multi-variable calculation that considers agent cost, training value, transaction value, and opportunity cost (Compl. Ex. 2, ’748 Patent, col. 24:55-60).

VI. Other Allegations

No probative visual evidence provided in complaint.

Indirect Infringement

The complaint alleges induced infringement for the ’748 and ’086 Patents. The allegations are based on Defendant distributing "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes" the patents (Compl. ¶24, ¶45).

Willful Infringement

The complaint asserts that service of the complaint itself provides Defendant with "actual knowledge" of infringement for the ’748 and ’086 Patents. It alleges that any continued infringement after this date is willful (Compl. ¶23-24, ¶44-45).

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

• A core issue will be one of definitional scope: can terms rooted in economic theory, such as "auction," "economic surplus," and "maximizing an aggregate utility," be construed to cover the proprietary algorithms used in Defendant's commercial customer routing systems, or is there a fundamental mismatch between the claimed formal optimization and the practical operation of the accused products?
• A key evidentiary question will be one of functional proof: in the absence of detailed infringement contentions in the complaint, the case will likely depend on what evidence Plaintiff can develop through discovery to demonstrate that Defendant’s systems actually perform the specific, multi-step optimization and cost-analysis functions required by the patent claims, rather than more conventional skill-based or load-balancing routing methods.