Matrix Absence Management Inc v. Penguin Benefits Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Matrix Absence Management, Inc. (Delaware) and AC Infotech Inc. (California)
  • Defendant: Penguin Benefits, Inc. (Delaware)
  • Plaintiff’s Counsel: Connolly Gallagher LLP; Sills Cummis & Gross P.C.
• Case Identification: 1:26-cv-00085, D. Del., 01/26/2026
• Venue Allegations: Venue is asserted in the District of Delaware based on the defendant’s incorporation in that district.
• Core Dispute: Plaintiff alleges that Defendant’s OneLeave Explorer software infringes patents related to systems and methods for evaluating and displaying employee compliance and benefits information through an automated, conversational interface.
• Technical Context: The technology operates in the human resources (HR) software domain, specifically addressing the management of complex, jurisdiction-specific employee leave programs.
• Key Procedural History: The complaint alleges that Plaintiffs’ counsel sent a letter to Defendant on October 8, 2025, identifying the patents-in-suit, suggesting a basis for pre-suit knowledge of the patents.

Case Timeline

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

U.S. Patent No. 11,677,706 - Systems and Methods for Evaluating and Displaying Subject-Specific Compliance Standard Information

• Patent Identification: U.S. Patent No. 11,677,706, "Systems and Methods for Evaluating and Displaying Subject-Specific Compliance Standard Information," Issued June 13, 2023.

The Invention Explained

• Problem Addressed: The patent’s background section describes the challenge of managing employee benefits, such as leave programs, which become increasingly complex as a company grows across multiple jurisdictions with differing and changing regulatory rules. It notes that conventional automated "bots" have limitations in handling the subtleties of natural language and the sensitive personal information often involved in such conversations ʼ706 Patent, col. 1:11-54
• The Patented Solution: The invention is a computer system that uses an "automated human interface module" to engage a user (a "subject," such as an employee) in a text-based conversation to determine their eligibility for benefits. The system is structured around a "node graph," where some nodes represent compliance questions and other nodes represent final compliance standards (e.g., FMLA). The user's answers to questions guide their progression through the graph until they reach a standard, at which point the system generates and communicates a report showing the expected availability of the corresponding benefit ('706 Patent, Abstract; col. 2:44-67; Fig. 2B).
• Technical Importance: This approach aims to provide an automated and individualized method for employees to navigate complex HR compliance landscapes conversationally, thereby reducing the burden on HR personnel and providing clearer outcomes for employees '706 Patent, col. 2:21-25

Key Claims at a Glance

• The complaint asserts infringement of at least independent claim 1 'Compl. ¶17
• Independent Claim 1 of the '706 Patent recites a computer system comprising processors and memory with instructions to:
  • Receive a first message from a subject to engage in a text-based conversation.
  • Engage an automated human interface module comprising a "node graph."
  • The node graph includes a first subset of nodes associated with compliance questions and a second subset associated with compliance standards.
  • Use subsequent messages to "progress the respective subject to another node in the node graph in accordance with satisfaction of the predetermined compliance question."
  • Repeat this progression until the subject reaches a node in the second subset, at which point the subject is "deemed to satisfy" requirements to receive a benefit.
  • Generate a report comprising a result of an "expected availability of the corresponding benefit."
  • Communicate the report to the subject for review.

U.S. Patent No. 12,047,343 - Systems and Methods for Evaluating and Displaying Subject-Specific Compliance Standard Information

• Patent Identification: U.S. Patent No. 12,047,343, "Systems and Methods for Evaluating and Displaying Subject-Specific Compliance Standard Information," Issued July 23, 2024.

The Invention Explained

• Problem Addressed: The '343 patent, a continuation of the application that led to the '706 patent, addresses the same technical problems related to the complexities of managing employee leave and benefits across various jurisdictions '343 Patent, col. 1:20-58
• The Patented Solution: The described solution is functionally identical to that of the '706 patent, involving an automated conversational system built on a node graph to guide users through compliance questions to determine benefit eligibility and generate a report '343 Patent, Abstract; col. 2:5-29 The primary distinction lies in the framing of the claims as a method rather than a system.
• Technical Importance: As with the '706 patent, the technical importance lies in automating and personalizing the process of navigating complex HR compliance rules '343 Patent, col. 2:25-29

Key Claims at a Glance

• The complaint asserts infringement of at least independent claim 1 'Compl. ¶26
• Independent Claim 1 of the '343 Patent recites a method performed at a server system, comprising the steps of:
  • Receiving a first message from a subject to engage in a text-based conversation.
  • Engaging an automated human interface module that comprises a "node graph" with a first subset of nodes (questions) and a second subset (standards).
  • "Using a message received subsequent... to progress the respective subject to another node in the node graph."
  • Repeating the "using" step until the subject progresses to a node in the second subset and is "deemed to satisfy" requirements for a benefit.
  • Generating a report with the "expected availability of the corresponding benefit."
  • Communicating the corresponding report for review by the subject.

III. The Accused Instrumentality

Product Identification

The accused instrumentality is identified as the "OneLeave Explorer software" Compl. ¶14

Functionality and Market Context

The complaint does not provide specific details regarding the technical functionality, architecture, or operation of the OneLeave Explorer software. The allegations are conclusory, stating that claim charts attached as exhibits (but not provided with the complaint document) show infringement Compl. ¶14, ¶17, ¶26 No information is provided regarding the product's market positioning.

IV. Analysis of Infringement Allegations

The complaint alleges that infringement of both the ’706 and ’343 patents is demonstrated in claim charts attached as Exhibits C and D, respectively Compl. ¶14 As these exhibits were not provided, the following analysis is based on the narrative infringement allegations in the complaint.

'706 Patent Infringement Allegations

The complaint alleges that Penguin directly infringes one or more claims of the ’706 Patent, including claim 1, by making, using, selling, or importing the OneLeave Explorer software Compl. ¶17 The infringement theory appears to be that the accused software constitutes the system claimed in the patent, embodying each of the claim's required elements, such as the automated human interface module and the node graph structure for progressing a user through compliance questions Compl. ¶17

'343 Patent Infringement Allegations

The complaint alleges that Penguin directly infringes one or more claims of the ’343 Patent, including the method of claim 1, through its activities related to the OneLeave Explorer software Compl. ¶26 The infringement theory is that the operation of the accused software performs the steps recited in the method claim, including engaging the user, progressing them through a series of questions, generating a report, and communicating it Compl. ¶26

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Evidentiary Questions: A primary point of contention will be evidentiary. The complaint does not offer public factual allegations detailing how the accused software operates. The case will depend on evidence produced during discovery that demonstrates whether the OneLeave Explorer software's architecture and functionality align with the claimed "node graph" structure and "automated human interface module."
  • Divided Infringement Questions (for '343 Patent): For the '343 Patent's method claims, a key issue may be divided infringement. The court may need to determine if all steps of the claimed method are performed by a single actor (e.g., Defendant's system) or if the steps are split between the system and the end-user. If the latter, the plaintiff's inducement theory may become central to its case.

V. Key Claim Terms for Construction

• The Term: "node graph"

• Context and Importance: This term describes the core logical and data structure of the claimed invention. The outcome of the infringement analysis will heavily depend on whether the architecture of the accused software is found to be a "node graph." Practitioners may focus on this term because its scope will determine if it covers a broad range of guided conversational flows or is limited to a more specific implementation.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: Claim 1 defines it broadly as "a plurality of nodes, each respective node... is connected to at least one other node" '706 Patent, col. 47:43-46 The specification also refers to it generally as a "hierarchical data structure" '706 Patent, col. 9:8-9, which could support a construction covering various tree-like or connected data structures.
  • Evidence for a Narrower Interpretation: The specification consistently illustrates the node graph as a specific structure that conversationally guides a user from questions to final "compliance standard" nodes (e.g., '706 Patent, Fig. 2B). A defendant may argue that the term is limited by these embodiments and does not read on other logical structures like a simple state machine or a basic rules engine.

• The Term: "automated human interface module"

• Context and Importance: This term defines the active component that interacts with the user. Its construction is critical for determining what types of automated systems (e.g., simple scripted bots vs. more advanced conversational AI) are covered by the claims.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claims require this module to perform certain functions (e.g., "engages an automated human interface module with the respective subject through the text-based conversation") but do not specify its internal workings '706 Patent, col. 47:38-40 This could support a broad interpretation covering any software module that performs the recited functions.
  • Evidence for a Narrower Interpretation: The patent’s background distinguishes the invention from "conventional solutions that make use of bots" which "failed to satisfactorily address employee management issues" '706 Patent, col. 1:43-45 A party could argue this context implies the term should be construed to require a level of conversational or analytical capability beyond that of a simple, conventional bot.

VI. Other Allegations

• Indirect Infringement: The complaint alleges active inducement of infringement for both patents. The factual basis asserted is that Penguin "understands, intends, and encourages end users to use the Infringing Software Tool in the United States" Compl. ¶18, ¶27 The complaint does not allege more specific facts, such as references to user manuals or marketing materials that instruct users on infringing uses.
• Willful Infringement: While not using the term "willful," the complaint seeks enhanced damages and requests the case be adjudged "exceptional" Compl. ¶1, ¶20, ¶29 The alleged basis for this is pre-suit knowledge, stemming from a letter plaintiffs’ counsel allegedly sent to Penguin on October 8, 2025, which identified the asserted patents Compl. ¶13

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

• A central issue will be evidentiary: given the absence of detailed technical allegations in the public complaint, the case will likely turn on what discovery reveals about the internal architecture and operation of the "OneLeave Explorer" software. The plaintiff will need to produce evidence demonstrating a direct mapping between the accused software's functionality and claimed elements like the "node graph" and "automated human interface module."
• A key legal question will be one of definitional scope: can the term "node graph," described in the patent as a specific structure for navigating compliance questions, be construed broadly enough to cover the logical flow and data structure of the accused software, or will it be limited to the patent’s specific embodiments?
• For the '343 method patent, a critical question will be the locus of infringement: are all steps of the claimed method performed by the defendant's system, constituting direct infringement, or are the actions of the end-user required to complete the method, shifting the focus to whether the defendant induced its users to infringe?