Patent Armory Inc v. Digital Federal Credit Union

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Digital Federal Credit Union (Massachusetts)
  • Plaintiff’s Counsel: Dickinson Wright PLLC
• Case Identification: 4:24-cv-40161, D. Mass., 12/19/2024
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business in the District of Massachusetts and having committed alleged acts of infringement within the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer communication systems infringe five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents relate to optimizing the routing of communications, such as in a call center, by using economic and skill-based models to match an incoming communication with the most appropriate agent.
• Key Procedural History: No significant procedural history is mentioned in the complaint.

Case Timeline

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

U.S. Patent No. 10,237,420 - Method and system for matching entities in an auction

The Invention Explained

• Problem Addressed: The patent’s background describes inefficiencies in traditional call center management, such as routing calls to under-skilled or over-skilled agents, and the negative effects of static agent groupings, all of which reduce a call center's transactional throughput (ʼ420 Patent, col. 4:35-51).
• The Patented Solution: The invention proposes a system that treats call routing as a matching problem solved by an auction. It defines characteristics for both the incoming communication (the "first entity") and the available agents (the "second entities") and then performs an "automated optimization" that considers not only the "economic surplus" of a potential match but also the "opportunity cost" of making a particular agent unavailable for other potential matches (’420 Patent, Abstract; col. 2:26-34). This moves beyond simple skill-based matching to a more dynamic, economic model of resource allocation.
• Technical Importance: This approach sought to apply principles of economic optimization and auction theory to the technical problem of call routing, creating a more dynamic and potentially more efficient alternative to static, rule-based systems (’420 Patent, col. 18:9-22).

Key Claims at a Glance

• The complaint asserts unspecified "exemplary method claims" (’420 Patent, Compl. ¶15). Independent claim 1 is representative:
  • estimating at least one content-specific or requestor-specific characteristic associated with a request;
  • determining a set of available partners, each having at least one respective partner characteristic;
  • evaluating, with at least one automated processor, a plurality of pairings of the request with a plurality of different available partners, according to an evaluator for valuing pairings of the request with respective available partners; and
  • generating a control signal, by the at least one automated processor, selectively dependent on the evaluating.
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

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

The Invention Explained

• Problem Addressed: The patent addresses the same call center inefficiencies described in the ’420 Patent, including the "under-skilled agent," "over-skilled agent," and "static grouping" problems that impair transactional throughput (ʼ748 Patent, col. 4:35-51).
• The Patented Solution: The invention is a communications routing system that represents predicted characteristics for both communication sources (e.g., callers) and targets (e.g., agents), with each having an associated "economic utility." The system determines an optimal routing by "maximizing an aggregate utility" with respect to the predicted characteristics of the potential pairings (’748 Patent, Abstract). The system is designed to integrate this intelligent analysis at a low level within the communications management architecture, rather than as a separate high-level process (’748 Patent, col. 18:9-22).
• Technical Importance: This technology represents a system-level architecture for implementing the economic optimization concepts for call routing, aiming to improve efficiency by integrating the decision-making logic directly into the communications server.

Key Claims at a Glance

• The complaint asserts unspecified claims (Compl. ¶21). Independent claim 1 is representative of a system claim:
  • A system comprising a processor and memory configured to:
  • receive a plurality of respective communications;
  • identify a plurality of resources available for association with a respective communication;
  • calculate a respective score associated with each available resource dependent on the availability state;
  • estimate an expected economic value to be obtained by associating each communication with each available resource; and
  • assign each communication to one of the resources based on at least the estimated economic value.
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 7,023,979 - Telephony control system with intelligent call routing

• Technology Synopsis: The patent describes a communications management system that receives a communication classification, accesses a database of agent skills, and uses a processor to compute an optimum agent selection. The system then directly controls the routing of the call to the selected agent (’979 Patent, Abstract).
• Asserted Claims: Unspecified "exemplary method claims" (Compl. ¶30).
• Accused Features: The "Exemplary Defendant Products" are alleged to infringe (Compl. ¶30).

U.S. Patent No. 7,269,253 - Telephony control system with intelligent call routing

• Technology Synopsis: The patent describes a communications system and method where characteristics of communications and at least three potential targets are stored. An optimum target is determined through a combinatorial optimization, which may include a cost-benefit analysis (’253 Patent, Abstract).
• Asserted Claims: Unspecified "exemplary method claims" (Compl. ¶36).
• Accused Features: The "Exemplary Defendant Products" are alleged to infringe (Compl. ¶36).

U.S. Patent No. 9,456,086 - Method and system for matching entities in an auction

• Technology Synopsis: This patent, a parent to the ’420 Patent, describes a method for matching entities by defining their characteristics using "multivalued scalar data" and performing an "automated optimization" based on the "economic surplus" of a match and the "opportunity cost" of making a resource unavailable for other matches (’086 Patent, Abstract).
• Asserted Claims: Unspecified "exemplary claims" (Compl. ¶42).
• Accused Features: The "Exemplary Defendant Products" are alleged to infringe (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentalities as "Exemplary Defendant Products" without naming specific products, services, or systems operated by Digital Federal Credit Union (Compl. ¶15, ¶21).

Functionality and Market Context

• The complaint does not provide sufficient detail for analysis of the functionality of the accused products. It alleges in a conclusory manner that the accused products "practice the technology claimed" by the patents-in-suit and states that infringement details are provided in claim-chart exhibits (Compl. ¶17, ¶26). These exhibits were not included with the complaint document provided for analysis.
• No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint incorporates its infringement allegations by reference to Exhibits 6, 7, 8, 9, and 10, which allegedly contain claim charts comparing the asserted claims to the "Exemplary Defendant Products" (Compl. ¶17, ¶26, ¶32, ¶38, ¶47). As these exhibits were not provided, a detailed analysis of the infringement theory for any of the asserted patents is not possible from the complaint itself. The pleading asserts direct infringement for all five patents, alleging Defendant infringes by "making, using, offering to sell, selling and/or importing" the accused products (Compl. ¶15, ¶21, ¶30, ¶36, ¶42).

Identified Points of Contention

• Scope Questions: The patents-in-suit are heavily grounded in the context of call centers, skill-based agent routing, and economic auctions. A central question may be whether the terminology used in the claims, such as "auction," "economic surplus," and "cost-utility function," can be construed to read on the customer communication and transaction-handling systems of a financial institution like a credit union.
• Technical Questions: The asserted claims generally require a multi-step optimization process that involves evaluating characteristics, calculating values (e.g., economic surplus or utility), and routing based on that complex calculation. A key factual question will be whether the accused systems perform these specific, claimed optimization steps, or if they employ more conventional routing logic that does not map onto the claim elements.

V. Key Claim Terms for Construction

Term: "economic surplus" (’420 Patent, Claim 1)

Context and Importance

• This term is central to the patent's proposed solution, which moves beyond simple skill-matching to an economic optimization model. The scope of infringement may depend on whether this term is construed narrowly to require a specific financial calculation (e.g., profit minus cost) or broadly to cover any abstract valuation or scoring metric.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The specification does not appear to provide an explicit definition, which may support an argument for giving the term its plain and ordinary meaning, potentially encompassing any calculation of net benefit or value.
• Evidence for a Narrower Interpretation: The detailed description discusses optimizing call center outcomes in terms of "achieving business goals," such as "sales volume, profit, or the like," which may be "directly computed within a cost function normalized in economic units" (’420 Patent, col. 24:30-40). This language may support an interpretation that ties "economic surplus" to tangible business and financial metrics.

Term: "economic utility" / "expected economic value" (’748 Patent)

Context and Importance

• The term "economic utility" appears in the Abstract, while "expected economic value" is in Claim 1. Similar to "economic surplus" in the ’420 Patent, this concept defines the invention's economic optimization framework. The viability of the infringement claim may turn on whether the accused system's routing logic can be characterized as calculating an "expected economic value." Practitioners may focus on this term because it appears to be the core technical distinction over prior art routing systems.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The claims themselves do not define how the "economic value" must be estimated, leaving open the possibility that any predictive scoring or ranking system could be argued to meet this limitation.
• Evidence for a Narrower Interpretation: The patent repeatedly discusses optimizing "long term call center operations" and monetizing factors like agent training (’748 Patent, col. 26:59-65; col. 27:59-62). This context could support a narrower construction requiring the "economic value" to be tied to concrete, long-term operational costs and benefits of a call center.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 Patents. It asserts that Defendant distributes "product literature and website materials" that induce end users to use the accused products in an infringing manner (Compl. ¶24, ¶45).
• Willful Infringement: Willfulness is not pleaded as a separate count. However, the complaint alleges that service of the complaint itself provides Defendant with "actual knowledge of infringement" for the ’748 and ’086 Patents (Compl. ¶23, ¶44). The prayer for relief seeks a judgment that the case is "exceptional" and an award of attorneys' fees, which is the relief associated with findings of willful infringement (Compl. p. 10). The allegations are based entirely on alleged post-suit knowledge.

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

• A core issue will be one of definitional scope: Can terms rooted in auction theory and complex economic modeling, such as "economic surplus" and "optimizing an aggregate utility," be construed to cover the functionalities of a credit union's member service and communication systems? The patent specifications are heavily focused on the particular problems of large-scale, multi-skilled call centers, raising the question of whether the claimed solutions apply to the accused environment.
• A second key issue will be evidentiary: The complaint makes only high-level, conclusory allegations of infringement, deferring all technical specifics to non-provided exhibits. A central question for the litigation will be whether Plaintiff can produce concrete evidence demonstrating that the accused systems actually perform the multi-step, combinatorial, and economic-based optimization methods required by the asserted claims, as distinguished from more conventional, rule-based routing systems.