DCT

1:25-cv-00472

Patent Armory Inc v. Inovalon Holdings Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:25-cv-00472, D. Del., 04/17/2025
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is incorporated in Delaware and has an established place of business in the District.
  • Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services infringe five patents related to intelligent call routing and auction-based systems for matching entities in telecommunications.
  • Technical Context: The patents address methods for optimizing resource allocation in high-volume communication environments, such as call centers, by using economic and utility-based models instead of simple, static routing rules.
  • Key Procedural History: The complaint does not allege any prior litigation, Inter Partes Review (IPR) proceedings, licensing history, or other significant procedural events related to the patents-in-suit.

Case Timeline

Date Event
2003-03-07 Priority Date for ’420, ’7023979, and ’086 Patents
2006-03-23 Priority Date for ’253 Patent
2006-04-03 Priority Date for ’748 Patent
2006-04-04 U.S. Patent No. 7,023,979 Issues
2007-09-11 U.S. Patent No. 7,269,253 Issues
2016-09-27 U.S. Patent No. 9,456,086 Issues
2019-03-19 U.S. Patent No. 10,237,420 Issues
2019-11-26 U.S. Patent No. 10,491,748 Issues
2025-04-17 Complaint Filed

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 Mar. 19, 2019)

The Invention Explained

  • Problem Addressed: The patent’s background describes the inefficiencies in traditional call centers that rely on static or simple first-in, first-out routing logic, which can lead to mismatches between caller needs and agent skills, inefficient resource use, and an inability to adapt to changing call patterns (Compl. ¶9; ’420 Patent, col. 3:36-4:33).
  • The Patented Solution: The invention recasts the call-routing problem as a real-time auction. It matches an incoming communication (a “first entity”) to the best available resource, such as a call center agent (a “second entity”), by performing a multifactorial optimization. This optimization seeks to maximize the “economic surplus” of a given match while also considering the “opportunity cost” of making that specific agent unavailable for other potential communications, aiming for a more globally efficient allocation of resources ('420 Patent, Abstract; col. 22:4-14).
  • Technical Importance: This approach introduced a more dynamic, economic-based model for resource allocation in telecommunications, moving beyond fixed rules to a system that continuously optimizes for overall utility and efficiency ('420 Patent, col. 18:9-24).

Key Claims at a Glance

  • The complaint asserts unspecified "exemplary method claims" ('Compl. ¶15). Independent claim 1 is representative of this technology.
  • The essential elements of independent claim 1 include:
    • Defining multivalued scalar data for a first entity (e.g., a call) representing "inferential targeting parameters."
    • Defining multivalued scalar data for each of a plurality of second entities (e.g., agents) representing "characteristic parameters."
    • Performing an automated optimization that considers both the "economic surplus" of a potential match and the "opportunity cost" of making a second entity unavailable for alternative matches.

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

The Invention Explained

  • Problem Addressed: Similar to the ’420 Patent, the background addresses the shortcomings of conventional call center management, which often fails to efficiently match callers with appropriately skilled agents, leading to reduced throughput and customer satisfaction (Compl. ¶10; ’748 Patent, col. 2:26-62).
  • The Patented Solution: The invention describes a system that uses a communications router to conduct a series of "auctions" to determine optimal communication paths between entities. The auction winners are determined by a "valuation function" that is sensitive to both "economic factors" (e.g., cost) and "non-economic factors" (e.g., optimality of profile matching). This allows the system to make sophisticated routing decisions that balance multiple, sometimes competing, objectives (’748 Patent, Abstract; Fig. 7).
  • Technical Importance: This technology provides a framework for intelligent, multi-factor routing that can adapt over time by valuing both quantitative and qualitative aspects of a potential communication pairing (’748 Patent, col. 39:15-21).

Key Claims at a Glance

  • The complaint asserts unspecified "exemplary '748 Patent Claims" (Compl. ¶21). Independent claim 1 is representative.
  • The essential elements of independent claim 1 include:
    • A communications router that defines concurrent communication paths between at least two sets of entities.
    • The router conducts a series of auctions to select paths.
    • The auctions use a valuation function sensitive to both "economic factors and non-economic factors."
    • The non-economic factors have an effect on the auction outcome that changes over time.

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 Sep. 11, 2007 (Compl. ¶11).
  • Technology Synopsis: Based on its title and relation to the other patents-in-suit, this patent appears to concern systems and methods for intelligently directing telephone calls within a communications network, such as a call center, based on various criteria related to the call and the available agents.
  • Asserted Claims: The complaint asserts unspecified "exemplary method claims" (Compl. ¶30).
  • Accused Features: The complaint alleges that "Exemplary Defendant Products," identified in a non-proffered exhibit, practice the technology claimed by the ’253 Patent (Compl. ¶30, ¶32).

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 Apr. 4, 2006 (Compl. ¶12).
  • Technology Synopsis: Similar to the ’253 Patent, this patent likely covers foundational aspects of intelligent call routing systems that go beyond simple queuing to match callers with agents based on a set of defined rules or characteristics.
  • Asserted Claims: The complaint asserts unspecified "exemplary claims" (Compl. ¶36).
  • Accused Features: The complaint alleges that "Exemplary Defendant Products," identified in a non-proffered exhibit, infringe the ’7023979 Patent (Compl. ¶36, ¶41).

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 Sep. 27, 2016 (Compl. ¶13).
  • Technology Synopsis: This patent, which is in the same family as the ’420 Patent, describes a method for matching entities by performing an automated optimization based on an economic surplus and an opportunity cost, framing the matching process as an auction.
  • Asserted Claims: The complaint asserts unspecified "exemplary claims" (Compl. ¶45).
  • Accused Features: The complaint alleges that "Exemplary Defendant Products," identified in a non-proffered exhibit, infringe the ’086 Patent (Compl. ¶45, ¶50).

III. The Accused Instrumentality

  • Product Identification: The complaint does not identify any accused product, method, or service by name (Compl. passim).
  • Functionality and Market Context: The complaint refers generically to "Exemplary Defendant Products" and states that they are identified in claim charts attached as Exhibits 6 through 10 (Compl. ¶15, ¶17, ¶21, ¶26, ¶30, ¶32, ¶36, ¶41, ¶45, ¶50). These exhibits were not filed with the complaint. Consequently, the complaint provides no specific details regarding the functionality or market context of the accused instrumentalities. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not provide a narrative infringement theory or any specific factual allegations mapping claim elements to accused product features. Instead, it wholly incorporates by reference a series of claim-chart exhibits (Exhibits 6-10) that were not provided with the filed complaint (Compl. ¶18, ¶27, ¶33, ¶42, ¶51). As such, a detailed analysis of the infringement allegations is not possible based on the provided document.

  • Identified Points of Contention: Lacking any description of the accused instrumentality, potential points of contention can only be framed based on the claim language itself.
    • Scope Questions: For the ’420 and ’086 Patents, a central question may be whether the accused system's logic for resource allocation can be properly characterized as performing an "auction" that calculates an "economic surplus" and "opportunity cost," as those terms are used in the patents. For the ’748, ’253, and ’7023979 Patents, a key question may be whether the accused system performs "intelligent call routing" as claimed, or a more conventional form of skills-based routing that may fall outside the scope of the claims.
    • Technical Questions: A key factual question for the court will be what technical operations the accused products actually perform. The dispute may turn on whether the accused system uses a simple weighted scoring algorithm versus a more complex, dynamic optimization that qualifies as the claimed "auction" or "valuation function."

V. Key Claim Terms for Construction

  • For the ’420 Patent:

    • The Term: "economic surplus"
    • Context and Importance: This term is the central metric for the claimed optimization. Its definition is critical because it will determine whether the objective function of an accused routing algorithm falls within the claim scope. Practitioners may focus on this term because it is an economic concept applied to a technical system, making its construction pivotal to the infringement analysis.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification discusses optimizing a "cost-utility function" and achieving "business goals," which could support a construction where "economic surplus" means any net positive outcome or overall value, not just a formal microeconomic surplus (’420 Patent, col. 22:45-50; col. 24:30-42).
      • Evidence for a Narrower Interpretation: The patent’s framing of the invention as an "auction" may support a narrower construction tied to formal economic principles, where "surplus" has a more precise, quantifiable meaning distinct from a general "utility score" (’420 Patent, Abstract).

  • For the ’748 Patent:

    • The Term: "valuation function which is sensitive to both economic factors and non-economic factors"
    • Context and Importance: This phrase defines the core decision-making logic of the claimed invention. The infringement analysis may depend on whether the accused system's algorithm considers the specific types of factors required and qualifies as a "valuation function."
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification provides wide-ranging examples of factors, including agent cost ("economic") and the optimality of a profile match or training utility ("non-economic"), suggesting the terms could be construed broadly to cover any multi-factor routing algorithm (’748 Patent, Fig. 7; col. 28:5-29:13).
      • Evidence for a Narrower Interpretation: The claim’s requirement that the function be "sensitive to both" types of factors could be argued to require an explicit, distinct consideration of each, rather than a system where one type of factor is merely an implicit or minor component of an overall score (’748 Patent, col. 39:15-21).

VI. Other Allegations

  • Indirect Infringement: For the ’748, ’7023979, and ’086 Patents, the complaint alleges induced infringement. This allegation is based on Defendant’s 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, ¶40, ¶48). Knowledge is alleged as of the date of service of the complaint (Compl. ¶25, ¶40, ¶49).
  • Willful Infringement: The complaint does not use the term "willful," but it lays the foundation for a claim of post-suit willful infringement for the ’748, ’7023979, and ’086 Patents. It alleges that service of the complaint constitutes "actual knowledge" and that despite this knowledge, Defendant "continues to make, use, test, sell, offer for sale, market, and/or import" the accused products (Compl. ¶23-24, ¶38-39, ¶47-48). The prayer for relief requests damages for "continuing or future infringement" for these patents (Compl. ¶L). No facts are alleged that would support pre-suit willfulness.

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

  • A primary procedural question will be one of pleading sufficiency: Can the complaint survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) given its complete reliance on incorporating non-proffered exhibits and its lack of specific factual allegations identifying an accused product or explaining how it infringes?
  • A core merits issue will be one of definitional scope: Can terms rooted in economic theory, such as "auction," "economic surplus," and "opportunity cost," be construed to cover the operations of the accused products, or will the evidence show that the products employ conventional multi-factor scoring algorithms that fall outside the patent claims?
  • A key evidentiary question will be one of technical operation: Assuming the case proceeds, the dispute will likely focus on the precise functionality of the accused products' routing algorithms. The case may turn on whether Plaintiff can demonstrate that the accused systems perform the specific, dynamic, and cost-based optimizations required by the patent claims, as opposed to more generalized forms of skills-based routing.