Patent Armory Inc v. Benefit Cosmetics LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Benefit Cosmetics LLC (Delaware)
  • Plaintiff’s Counsel: Garibian Law Offices, P.C.; Rabicoff Law LLC
• Case Identification: 1:24-cv-01310, D. Del., 12/04/2024
• Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant has an established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant infringes five U.S. patents related to intelligent call routing and auction-based systems for matching entities in a communications network.
• Technical Context: The technology concerns advanced methods for managing call centers and other communication systems by using economic models and multifactorial optimization to route communications to the most appropriate resource, such as a customer service agent.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.

Case Timeline

Date	Event
2002-03-07	Earliest Priority Date for ’979 and ’253 Patents
2003-03-07	Earliest Priority Date for ’420 and ’086 Patents
2006-04-03	Earliest Priority Date for ’748 Patent
2006-04-04	’979 Patent Issued
2007-09-11	’253 Patent Issued
2016-09-27	’086 Patent Issued
2019-03-19	’420 Patent Issued
2019-11-26	’748 Patent Issued
2024-12-04	Complaint Filing Date

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. 10,237,420, "Method and system for matching entities in an auction", issued March 19, 2019.

The Invention Explained

• Problem Addressed: The patent’s background section describes the inefficiencies of traditional call center management, where routing calls based on simple rules (e.g., first-come-first-served) can lead to mismatches between a caller's needs and an agent's skills, resulting in reduced efficiency and customer satisfaction (’420 Patent, col. 2:26-42).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (like a caller) to a "second entity" (like an agent) as a type of auction. It performs an "automated optimization" that considers not only the best match but also the "economic surplus" of that match and the "opportunity cost" of making that agent unavailable for other potential callers (’420 Patent, Abstract; Fig. 1). This allows for a more globally optimal routing decision that balances immediate needs with long-term call center efficiency (’420 Patent, col. 23:46-50).
• Technical Importance: This approach represents a shift from static, rule-based call routing to a dynamic, economic model-based system for allocating communication resources.

Key Claims at a Glance

• The complaint does not identify specific asserted claims but refers to "Exemplary '420 Patent Claims" in an unattached exhibit (Compl. ¶¶15, 17). 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;
  • defining a plurality of multivalued scalar data for each of the plurality of second entities, representing respective characteristic parameters; and
  • performing an automated optimization with respect to an economic surplus of a respective match and an opportunity cost of the unavailability of the second entities for an alternate first entity.

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

• Patent Identification: U.S. Patent No. 10,491,748, "Intelligent communication routing system and method", issued November 26, 2019.

The Invention Explained

• Problem Addressed: Similar to the ’420 Patent, the background describes the challenge of efficiently managing electronic customer contact in a call center, where the goal is to balance high-quality service with the efficient use of resources (’748 Patent, col. 1:25-33).
• The Patented Solution: The patent describes a routing system that determines an optimal path between communication "sources" and "targets" by maximizing an "aggregate utility." This utility is calculated based on the predicted characteristics of both the sources (e.g., callers) and the targets (e.g., agents), each of which has an associated "economic utility" (’748 Patent, Abstract). The system can use this model to balance short-term efficiency with long-term goals like agent training (’748 Patent, Fig. 1).
• Technical Importance: The invention provides a framework for intelligent routing based on maximizing a holistic, economic-based utility function rather than discrete, sequential rules.

Key Claims at a Glance

• The complaint does not identify specific asserted claims but refers to "Exemplary '748 Patent Claims" in an unattached exhibit (Compl. ¶¶21, 26). Independent claim 1 is representative:
  • A method for routing communications between a plurality of communications sources and a plurality of communications targets, the method comprising:
  • representing a plurality of predicted characteristics of the communications sources, each having an economic utility;
  • representing a plurality of predicted characteristics of the 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.

Multi-Patent Capsule: U.S. Patent No. 7,023,979

• Patent Identification: U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing", issued April 4, 2006.
• Technology Synopsis: This patent addresses inefficient call center operations. It discloses a system that receives a communication, determines its classification, accesses a database of agent skills, and performs a "combinatorial optimization" to determine a cost-benefit optimized agent selection for routing the call (’979 Patent, Abstract; col. 1:10-21).
• Asserted Claims: The complaint does not specify which claims are asserted (Compl. ¶30).
• Accused Features: The complaint does not specify which of Defendant's features are accused of infringing this particular patent (Compl. ¶30).

Multi-Patent Capsule: U.S. Patent No. 7,269,253

• Patent Identification: U.S. Patent No. 7,269,253, "Telephony control system with intelligent call routing", issued September 11, 2007.
• Technology Synopsis: Arising from the same patent family as the ’979 Patent, this invention also targets optimizing call center routing. It describes a system for matching a communication with a handler by predicting a set of issues, accessing handler profiles, and selecting an optimum handler based on a minimal capability, all controlled within a common process (’253 Patent, Abstract; col. 33:51-64).
• Asserted Claims: The complaint does not specify which claims are asserted (Compl. ¶36).
• Accused Features: The complaint does not specify which of Defendant's features are accused of infringing this particular patent (Compl. ¶36).

Multi-Patent Capsule: U.S. Patent No. 9,456,086

• Patent Identification: U.S. Patent No. 9,456,086, "Method and system for matching entities in an auction", issued September 27, 2016.
• Technology Synopsis: This patent, from the same family as the ’420 Patent, describes a method for matching entities by defining targeting parameters for a "first entity" and characteristic parameters for multiple "second entities." It then performs an "automated optimization" based on the "economic surplus" of a potential match and the "opportunity cost" of making a resource unavailable for others (’086 Patent, Abstract).
• Asserted Claims: The complaint does not specify which claims are asserted (Compl. ¶42).
• Accused Features: The complaint does not specify which of Defendant's features are accused of infringing this particular patent (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentalities as "Exemplary Defendant Products" but does not name any specific product, method, or service offered by Benefit Cosmetics LLC (Compl. ¶15).

Functionality and Market Context

• The complaint does not provide any description of the functionality of the accused products. It alleges in a conclusory manner that these products "practice the technology claimed" by the patents-in-suit (Compl. ¶17). Given that the defendant is a cosmetics company, it may be inferred that the accused instrumentality relates to its customer service call center or other customer communication platforms, but the complaint itself provides no such details.

IV. Analysis of Infringement Allegations

No probative visual evidence provided in complaint.

The complaint incorporates by reference claim charts from Exhibits 6, 7, 8, 9, and 10, which were not filed with the complaint (Compl. ¶¶18, 27, 33, 39, 48). In lieu of a claim chart, the narrative infringement theory is summarized below.

The complaint alleges that the "Exemplary Defendant Products" satisfy all elements of the asserted claims of the patents-in-suit (Compl. ¶17, ¶26, ¶32, ¶38, ¶47). For each of the five patents, the complaint alleges that Defendant directly infringes by "making, using, offering to sell, selling and/or importing" the accused products (Compl. ¶¶15, 21, 30, 36, 42). It further alleges direct infringement based on internal testing and use by Defendant's employees (Compl. ¶¶16, 22, 31, 37, 43). The complaint does not provide any specific facts detailing how the accused products operate or map to the elements of any patent claim.

• Identified Points of Contention:
  • Scope Questions: A central question will be whether the claims, which recite specific "automated optimization," "economic surplus," and "aggregate utility" maximization functions, can be construed to cover the functionality of a conventional customer service communication system. For example, does a standard call routing system that directs a customer to the first available agent with a required language skill perform an "automated optimization with respect to an economic surplus" as recited in claim 1 of the ’420 Patent?
  • Technical Questions: A primary evidentiary question will be what facts, if any, support the allegation that Defendant's systems perform the specific economic modeling and multifactorial optimization steps required by the claims. The complaint's lack of detail suggests that the core of the dispute may center on whether the accused systems perform these functions at all, or if they perform them in a way that meets the claim limitations.

V. Key Claim Terms for Construction

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

• Context and Importance: This term is central to the inventive concept of the ’420 and ’086 Patents. Its construction will be critical for determining whether the accused system performs more than conventional, rule-based routing. Practitioners may focus on this term because it appears to require a specific type of economic calculation that may not be present in standard call center software.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification discusses optimizing a "cost-utility function" in general terms, which could be argued to encompass any routing decision that implicitly considers costs (like agent time) and utility (like resolving a customer issue) (’420 Patent, col. 24:37-43).
  • Evidence for a Narrower Interpretation: The specification repeatedly frames the invention in the context of an "auction" and "game theory," and explicitly defines the optimization as including "opportunity cost" (’420 Patent, Abstract; col. 22:50-68). This language may support a narrower construction requiring a specific, sophisticated economic model that considers competing demands for resources, not just simple cost-benefit logic.

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

• Context and Importance: This is the core functional step of the method claimed in the ’748 Patent. The dispute will likely focus on what constitutes "maximizing" a utility in the context of the claims, as opposed to simply applying a set of routing rules.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification notes that the system may implement telephony features other than just destination or target selection, which could suggest a broad meaning for "utility" that includes overall system performance (’748 Patent, col. 18:23-25).
  • Evidence for a Narrower Interpretation: The abstract links this term directly to "economic utility" for both communication sources and targets. The detailed description further provides mathematical formulas for calculating a "cost function," suggesting that "maximizing" requires a specific computational process rather than a heuristic approach (’748 Patent, Abstract; col. 24:52-57).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 Patents. The stated basis for inducement is Defendant's alleged distribution of "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 does not contain an explicit count for willful infringement. However, for the ’748 and ’086 Patents, it alleges "Actual Knowledge of Infringement" arising from the service of the complaint itself (Compl. ¶¶23, 44). This allegation appears to lay the groundwork for a claim of post-suit willfulness but alleges no facts to support pre-suit knowledge.

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

• A core issue will be one of definitional scope: can the patents’ claims—rooted in specific concepts of auction theory, economic surplus, and utility maximization—be construed broadly enough to encompass the general-purpose customer communication systems of a retail cosmetics company?
• A key evidentiary question will be one of technical operation: what factual evidence will be presented to demonstrate that the accused systems perform the specific, multi-factorial "automated optimization" recited in the claims, as opposed to employing conventional, rule-based call routing logic common in the industry? The complaint’s bare allegations leave this as the central, unanswered question of fact.