DCT

1:16-cv-02062

Interactive Intelligence Inc v. Avaya Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:16-cv-02062, S.D. Ind., 08/01/2016
  • Venue Allegations: Plaintiff alleges venue is proper in the Southern District of Indiana because a substantial part of the events giving rise to the claims occurred in Indianapolis and because Defendant Avaya regularly conducts business in the district, maintaining relationships with at least thirty authorized "Partners" in the area.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its contact center products do not infringe Defendant's patents, that the patents are invalid, and that Defendant has engaged in patent misuse by demanding royalties based on an overbroad definition of "global sales" under a now-terminated license agreement.
  • Technical Context: The dispute concerns technology for call centers and unified business communications, a field critical for managing enterprise-level customer interactions and operational efficiency.
  • Key Procedural History: The parties operated under a Patent License Agreement (PLA) executed in 2002 and amended in 2006. Plaintiff alleges that Defendant engaged in patent misuse by requiring royalty payments on products and services not covered by the licensed patents. Defendant unilaterally terminated the PLA on July 29, 2016, shortly before this complaint was filed.

Case Timeline

Date Event
1996-06-03 Priority Date for U.S. Patent No. 5,802,058
1997-03-07 Priority Date for U.S. Patent No. 5,982,873
1998-09-01 Issue Date for U.S. Patent No. 5,802,058
1999-11-09 Issue Date for U.S. Patent No. 5,982,873
2002-01-01 Patent License Agreement (PLA) effective between Interactive Intelligence and Avaya.
2006-01-01 Amended PLA becomes effective, expanding the scope of licensed patents.
2011-07 Avaya demands royalties on revenue from Latitude Software, acquired by Interactive Intelligence.
2015-11-25 Interactive Intelligence notifies Avaya of its belief that the PLA is unenforceable.
2016-07-29 Avaya unilaterally terminates the PLA.
2016-08-01 Complaint for Declaratory Judgment filed.

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

U.S. Patent No. 5,802,058, "NETWORK-INDEPENDENT CONNECTION MANAGEMENT," Issued September 1, 1998

The Invention Explained

  • Problem Addressed: The patent background describes that in conventional client-server telecommunication systems, the central call-control server must be specifically designed for the network fabric it manages (e.g., LAN, WAN, or a telephony switching network), making it difficult to provide centralized control over diverse network types ( Compl. ¶20; ’058 Patent, col. 1:21-36).
  • The Patented Solution: The invention proposes a system where a central "media manager" on a server acts as a broker for connections rather than directly controlling the network fabric. A first endpoint sends a connection "offer" to the manager, which forwards it to a second endpoint. Upon receiving an "acceptance," the manager determines what, if any, resources (like protocol converters) are needed to bridge differences between the endpoints. The manager then sends instructions back to the endpoints and any marshaled resources, telling them what network addresses to connect to, leaving the final connection setup to the endpoints themselves ('058 Patent, Abstract; col. 2:30-56).
  • Technical Importance: This approach decouples centralized call-control logic from network-specific implementation details, enabling the creation of advanced, feature-rich telephony services that can operate transparently over different and potentially less-sophisticated underlying networks ('058 Patent, col. 2:9-22).

Key Claims at a Glance

  • The complaint seeks a declaration of non-infringement for the entirety of the Asserted Patents without specifying claims (Compl. ¶ 28). Independent Claim 1 is representative of the invention's core.
  • Independent Claim 1 requires, in essence:
    • A system with communications endpoints, a connection manager, resources, and a medium.
    • A first endpoint sending an "offer" of communication to the manager.
    • The manager sending the offer to a second endpoint.
    • The second endpoint sending an "acceptance" to the manager.
    • The manager determining and marshaling any needed resources to bridge differences between the offer and acceptance.
    • The manager sending instructions to an endpoint on how to set up the communication through any marshaled resource.
    • The endpoint setting up the communication according to the instructions.

U.S. Patent No. 5,982,873, "WAITING-CALL SELECTION BASED ON OBJECTIVES," Issued November 9, 1999

The Invention Explained

  • Problem Addressed: The patent's background section notes that conventional Automatic Call Distribution (ACD) systems typically handle waiting calls on a simple "oldest-call-waiting" basis. This method fails to account for the different service needs of various communication types; for example, a video call may require service within seconds, whereas an email inquiry could be handled within hours (’873 Patent, col. 1:25-34).
  • The Patented Solution: The invention describes a method for selecting a waiting item (such as a call) by assigning different "service-time objectives" or "waiting-time limits" to different types of calls or queues. When an agent becomes available, the system determines which waiting call is "farthest along in exceeding its assigned waiting-time limit." This is achieved by calculating a ratio or percentage of the call's current wait time relative to its assigned objective and selecting the call with the highest value ('873 Patent, Abstract; Fig. 2).
  • Technical Importance: This objective-based selection allows call centers to implement more sophisticated, business-driven prioritization strategies, moving beyond simple chronological queuing to better meet varied customer service-level requirements ('873 Patent, col. 1:41-50).

Key Claims at a Glance

  • The complaint seeks a declaration of non-infringement for the entirety of the Asserted Patents without specifying claims (Compl. ¶ 28). Independent Claim 1 is representative.
  • Independent Claim 1 requires a method for selecting a waiting item, comprising the steps of:
    • Assigning different "waiting-time limits" to different items.
    • Determining which one of the items is "farthest along in exceeding its assigned waiting-time limit."
    • Selecting the determined item.

Multi-Patent Capsule Analysis

  • U.S. Patent No. 6,009,386, "SPEECH PLAYBACK SPEED CHANGE USING WAVELET CODING, PREFERABLY SUB-BAND CODING," Issued December 28, 1999

    • Technology Synopsis: The patent describes a method for changing the playback speed of a digitized audio signal without altering its pitch. The method involves using sub-band coding to create data frames, and then periodically dropping or replicating pairs of adjacent frames to speed up or slow down playback, respectively (Compl. ¶20; ’386 Patent, Abstract).
    • Asserted Claims: The complaint does not specify claims; representative independent claims are 1, 4, 5, 9, and 11.
    • Accused Features: The patent is asserted against Interactive's "call center" products and services (Compl. ¶¶ 9, 20, 28).

  • U.S. Patent No. 6,052,460, "ARRANGEMENT FOR EQUALIZING LEVELS OF SERVICE AMONG SKILLS," Issued April 18, 2000

    • Technology Synopsis: The patent addresses service level disparities between large and small agent skill groups in a call center. It proposes selecting an agent or a call for handling based on which pairing will produce the least deviation from target performance criteria, such as per-skill work time ratios, thereby equalizing service levels without overstaffing smaller skill groups (Compl. ¶20; ’460 Patent, Abstract).
    • Asserted Claims: The complaint does not specify claims; representative independent claims are 1, 6, 11, 14, 19, 21, and 23.
    • Accused Features: The patent is asserted against Interactive's "Customer Interaction Center® product" and other call center solutions (Compl. ¶¶ 20, 28).

  • U.S. Patent No. 6,173,399, "APPARATUS FOR IMPLEMENTING VIRTUAL PRIVATE NETWORKS," Issued January 9, 2001

    • Technology Synopsis: The patent describes a system for secure data communication over a public network, such as the Internet, using a Virtual Private Network (VPN) unit. This unit moderates traffic, determining if the source and destination are members of the same VPN group and, if so, processing the packet according to group-specific compression, encryption, and authentication rules (Compl. ¶20; ’399 Patent, Abstract).
    • Asserted Claims: The complaint does not specify claims; representative independent claims are 1 and 9.
    • Accused Features: The patent is asserted against Interactive's general products and services, particularly those involving networked communications (Compl. ¶¶ 20, 28).

  • U.S. Patent No. 6,192,050, "METHOD AND APPARATUS FOR INQUIRY RESPONSE VIA INTERNET," Issued February 20, 2001

    • Technology Synopsis: The patent describes a system where a user on a data page (e.g., a website) can request a live callback. An automatic call distribution device places the user's request into a customer service queue. The next available representative then initiates an internet-based telephone call back to the user to conduct an interactive session (Compl. ¶20; ’050 Patent, Abstract).
    • Asserted Claims: The complaint does not specify claims; representative independent claims are 1 and 14.
    • Accused Features: The patent is asserted against Interactive's "call center" products and services, likely relating to web-based customer interaction features (Compl. ¶¶ 9, 20, 28).

III. The Accused Instrumentality

  • Product Identification: The complaint identifies the accused instrumentalities as Interactive's "various products and services in the United States, including its Customer Interaction Center® product" (Compl. ¶ 28).
  • Functionality and Market Context: The complaint describes Interactive as a "leading software provider in the field of unified business communication solutions for contact centers" (Compl. ¶ 7). Its business includes not only call center software but also "hardware resales, software maintenance and support, training, [and] subscription services for cloud based hosting" (Compl. ¶ 14). The complaint does not provide technical details regarding the specific operation of the accused products' features.

IV. Analysis of Infringement Allegations

The complaint, as an action for declaratory judgment of non-infringement, does not contain specific infringement allegations or a claim chart detailing how the accused products purportedly practice the patent claims. It only states that Defendant Avaya has alleged that its patents were infringed by Interactive's products (Compl. ¶ 20). As such, a claim chart summary cannot be constructed from the provided document.

  • Identified Points of Contention:
    • '058 Patent: A potential point of contention may be whether Interactive's software architecture includes a "communications-connection manager" that performs the claimed function of marshaling resources and sending connection instructions back to endpoints. The analysis may question if Interactive's products function as the claimed brokering server or if they are endpoint applications that rely on different, standard networking protocols.
    • '873 Patent: A likely dispute will concern the specific logic of call queuing. The question may be whether Interactive's product performs the claimed step of "determining which one of the plurality of items is farthest along in exceeding its assigned waiting-time limit." Analysis will focus on whether the accused software contains this specific comparative and calculative function or employs a different, non-infringing prioritization scheme.

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

  • For the ’058 Patent:

    • The Term: "communications-connection manager"
    • Context and Importance: The definition of this term is critical to determining if Interactive's system architecture falls within the scope of the claims. Practitioners may focus on this term because its construction will determine whether the claims read on a distributed software platform or are limited to a centralized server entity as depicted in the patent.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The claim's use of "means-plus-function" language for the manager's actions could support an interpretation covering any component that performs the recited functions, regardless of its specific implementation ('058 Patent, col. 8:1-38).
      • Evidence for a Narrower Interpretation: The specification consistently describes the invention in a client-server context, where the "manager" is part of a "call-control server" distinct from the "client endpoints" ('058 Patent, col. 1:10-12, Fig. 1). This could support a narrower construction requiring a separate server entity.

  • For the ’873 Patent:

    • The Term: "farthest along in exceeding its assigned waiting-time limit"
    • Context and Importance: This phrase is the central novelty of the claimed call-selection method. The infringement analysis will likely depend on whether Interactive's product performs a calculation that maps onto this language.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The patent suggests the determination can be based on a "ratio," "percentage," or simple "difference," which could be argued to encompass a variety of prioritization metrics ('873 Patent, col. 4:13-34).
      • Evidence for a Narrower Interpretation: The claim requires a "determination" of which item is "farthest along in exceeding" a limit, implying a specific calculation rather than a simple priority ranking. The flowchart in Figure 2 explicitly shows the step of calculating an "Expired Service-Time Objective Percentage" by dividing the wait time by the service-time objective, suggesting a specific mathematical operation is contemplated ('873 Patent, Fig. 2, element 210).

VI. Other Allegations

  • Indirect Infringement: The complaint seeks a declaration of non-infringement covering contributory and induced infringement, but as it is not the accusing party, it does not allege facts supporting these theories (Relief ¶ B).
  • Willful Infringement: The complaint does not contain allegations of willful infringement.
  • Patent Misuse: The complaint centrally alleges patent misuse, claiming Avaya improperly attempted to expand the scope of its patent monopoly by demanding royalties on products and services not covered by the patent claims, such as those from the acquired Latitude Software and business conducted outside the United States (Compl. ¶¶ 1, 13-15, 26).

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

  • A threshold issue will be one of patent misuse: Did Avaya's insistence on a "global sales" royalty base, which allegedly captured revenue from unpatented products, constitute an impermissible extension of its patent rights that could render the Asserted Patents unenforceable?
  • A key evidentiary question will be one of functional operation: Do Interactive's accused products, such as the Customer Interaction Center®, actually implement the specific, objective-based call selection method of the ’873 patent by calculating which call is "farthest along in exceeding" a time limit, or is there a fundamental mismatch in the system's underlying logic?
  • A central issue of claim scope will concern the ’058 patent: Can the term "communications-connection manager," described in the patent as a server-side entity, be construed to cover functionalities that may be integrated differently within Interactive's unified software platform, or is the claim limited to the specific client-server architecture disclosed?