Patent Armory Inc v. WAG Labs Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Wag Labs, Inc. (Delaware)
  • Plaintiff’s Counsel: Silverman, McDonald & Friedman; Rabicoff Law LLC
• Case Identification: 1:26-cv-00035, D. Del., 01/12/2026
• Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant is incorporated in Delaware and has committed acts of patent infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services infringe two patents related to intelligent call routing and auction-based entity matching systems.
• Technical Context: The patents relate to optimizing resource allocation in communications, such as routing callers to the most suitable call-center agent or matching parties in a sophisticated auction.
• 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

Date	Event
2002-03-07	’979 Patent – Earliest Priority Date
2003-03-07	’086 Patent – Earliest Priority Date
2006-04-04	’979 Patent – Issue Date
2016-09-27	’086 Patent – Issue Date
2026-01-12	Complaint Filing Date

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

The Invention Explained

• Problem Addressed: The patent addresses the inefficiencies of traditional call centers, particularly the challenge of optimally matching incoming calls with available agents based on their specific skills, a paradigm known as "skills-based routing" (’979 Patent, col. 4:61-67). Conventional systems often struggle with "under-skilled" agents who cannot handle a transaction and "over-skilled" agents assigned to simple tasks, both of which reduce a call center's overall efficiency (’979 Patent, col. 4:25-55).
• The Patented Solution: The invention proposes a communications management system that moves the intelligent routing logic to a lower level of the architecture, within the switching system itself (’979 Patent, col. 59:8-23). 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" to which the call is directly routed (’979 Patent, Abstract; Fig. 1). This integration is intended to reduce latencies and improve real-time routing decisions compared to systems where such logic is externalized (’979 Patent, col. 60:32-39).
• Technical Importance: The technology represents a move toward more dynamic, data-driven optimization within telephony infrastructure, aiming to improve resource allocation beyond simple first-in, first-out or static routing rules (’979 Patent, col. 3:1-13).

Key Claims at a Glance

• The complaint does not specify which claims are asserted, reserving the right to identify them later (Compl. ¶12, ¶14). Independent claim 1 is representative:
• A communications control system, having a common operating environment, comprising:
  • an input for receiving call classification information;
  • a data structure representing agent characteristics; and
  • a processor, for (a) determining... an optimum agent for association with a call... based on a multivariate cost function comparing at least three agents, the selection being based on at least a correspondence of said call classification and said data structure of agent characteristics, and (b) controlling a call routing of the call in dependence on the determination... 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

The Invention Explained

• Problem Addressed: The patent describes the limitations of then-existing internet auction systems, which often rely on simplistic bidding strategies (like maximum price proxy bidding) and fail to account for the complex, multi-faceted attributes of the participating entities or the "opportunity cost" of a given match (’086 Patent, col. 38:5-22). This creates inefficiencies that a live, human-driven market might otherwise resolve (’086 Patent, col. 38:6-14).
• The Patented Solution: The invention claims a method for matching entities using an automated, multi-factor optimization. It defines "multivalued scalar data" for both the "first entity" (e.g., a party seeking a service) and the "second entities" (e.g., service providers) (’086 Patent, Abstract). A processor then performs an optimization that considers not only the direct match quality but also the "economic surplus" generated and the "opportunity cost"—that is, the cost of making a particular service provider unavailable for a potentially more valuable future match (’086 Patent, Abstract; Fig. 7). This approach allows the system to conduct a sophisticated auction that balances both economic and non-economic factors (’086 Patent, col. 10:48-56).
• Technical Importance: This technology moves beyond simple price-based auctions to a more holistic matching system that uses computational optimization to approximate the complex trade-offs made in sophisticated real-world markets (’086 Patent, col. 73:5-13).

Key Claims at a Glance

• The complaint does not specify which claims are asserted (Compl. ¶18, ¶23). Independent claim 1 is representative:
• A method for matching a first subset selected from a plurality of first entities with a second subset selected from a plurality of second entities, comprising:
  • storing in a memory a plurality of multivalued scalar data representing inferential targeting parameters for the first subset;
  • storing in the memory a plurality of multivalued scalar data of each of the plurality of second entities...;
  • performing, using an automated processor, an optimization with respect to at least an economic surplus of a respective mutually exclusive match... and an opportunity cost of the unavailability of the second subset for matching with an alternate subset...; and
  • outputting a signal in dependence on the optimization.

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific accused products, methods, or services by name (Compl. ¶¶12, 18). It refers generally to "Exemplary Defendant Products" that are purportedly identified in claim chart exhibits, but these exhibits were not filed with the complaint (Compl. ¶¶14-15, 23-24).
• Functionality and Market Context: The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities.

IV. Analysis of Infringement Allegations

The complaint alleges direct infringement of the ’979 Patent and direct and induced infringement of the ’086 Patent (Compl. ¶¶12, 18, 22). However, it does not provide a narrative infringement theory or any factual allegations mapping claim elements to product features in the body of the complaint. Instead, it incorporates by reference claim charts from Exhibits 3 and 4, which were not provided with the public filing (Compl. ¶¶15, 24). Consequently, a detailed analysis of the infringement allegations is not possible based on the provided documents.

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

For the ’979 Patent:

• The Term: "multivariate cost function" (from Claim 1)
• Context and Importance: This term is central to the claimed invention's optimization process. The infringement analysis may hinge on whether the accused system's agent-selection algorithm qualifies as a "multivariate cost function" that compares agents based on multiple weighted factors, as opposed to a simpler or different type of routing logic.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the function can incorporate a wide range of disparate factors, including not only agent skill but also training costs, rewards/punishments, and anticipated outcomes, which are all normalized into a common "cost" metric (’979 Patent, col. 65:10-28). This supports a broad definition encompassing any algorithm that weighs multiple inputs.
  • Evidence for a Narrower Interpretation: The patent provides a specific formula: An=Max[Acn1∑(rsis*ansis)+Acn2], which includes agent cost factors (Acn1, Acn2), skill weightings (rsi), and agent scores (ansi) (’979 Patent, col. 65:1-5). A defendant may argue that the term should be limited to functions that adhere to this or a similar mathematical structure.

For the ’086 Patent:

• The Term: "opportunity cost" (from Claim 1)
• Context and Importance: This concept appears to distinguish the claimed method from a simple auction that matches the best available pair without considering future consequences. The dispute may turn on what evidence is required to show that an accused system calculates or considers the "opportunity cost" of making an entity unavailable for a different, future match.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes opportunity cost as a factor to consider when "a selection of an agent for one matter may be optimal in a narrow context, [but] the selected agent might be more valuable for another matter" (’086 Patent, col. 52:1-5). This suggests the term could be construed broadly to cover any system that reserves higher-value resources for anticipated higher-value tasks.
  • Evidence for a Narrower Interpretation: The patent presents this concept in a specific formula: An=Max({[Acn1∑(rsis*ansis)+Acn2]+Bcn}+Ccn)+Dcn>, where Dcn explicitly represents the "opportunity cost for allocating agent n to the particular call" (’086 Patent, col. 52:20-30). This may support a narrower construction requiring a discrete, calculated value for opportunity cost within the optimization algorithm.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’086 Patent, asserting that Defendant distributes "product literature and website materials" that instruct end users to use the accused products in an infringing manner (Compl. ¶21). The complaint states these materials are referenced in the unprovided Exhibit 4 (Compl. ¶21).
• Willful Infringement: The complaint alleges that service of the complaint itself constitutes "actual knowledge" of infringement of the ’086 Patent (Compl. ¶20). This forms a basis for potential post-suit willful infringement or enhanced damages if infringement is found to be ongoing.

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

1. Evidentiary Sufficiency: A primary threshold issue will be the complaint's lack of factual detail. The complete reliance on unprovided exhibits for identifying the accused products and outlining the infringement theory raises the question of whether the complaint meets the pleading standards required by Federal Circuit precedent following Twombly and Iqbal.
2. Definitional Scope: The case will likely turn on claim construction, specifically whether the abstract, function-oriented terms in the patents—such as "multivariate cost function" (’979 Patent) and "opportunity cost" (’086 Patent)—can be construed to read on the specific algorithms used by the accused products.
3. Technical Application: A core technical question will be how the patents' concepts, rooted in telephony call centers and auctions, apply to the defendant's business. The nature of the "entities" being matched, the "skills" being evaluated, and the "costs" being optimized in the accused system will be central to the infringement analysis.