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 as proper in the District of Massachusetts on the basis that Defendant maintains an established place of business within the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer communication and call routing systems infringe five patents related to intelligent call routing and auction-based entity matching technologies.
• Technical Context: The technology at issue involves methods for optimizing the operation of communications systems, such as call centers, by using algorithms to intelligently match incoming communications with available agents or resources.
• Key Procedural History: The complaint does not specify any prior litigation, licensing history, or post-grant proceedings for the patents-in-suit. U.S. Patent No. 10,237,420 is a continuation of the application family that includes U.S. Patent No. 9,456,086, and its prosecution history includes a terminal disclaimer, which may align its expiration date with that of the earlier patent and suggests that issues of obviousness-type double patenting were addressed.

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"

• Patent Identification: U.S. Patent No. 10,237,420, "Method and system for matching entities in an auction", issued March 19, 2019.

The Invention Explained

• Problem Addressed: The patent describes the inefficiency of traditional call centers that use simple routing logic, such as first-come-first-served, which fails to optimally match callers with appropriately skilled agents ('420 Patent, col. 2:26-54). This can result in mismatches where over-skilled agents handle simple tasks or under-skilled agents handle complex ones, reducing overall throughput ('420 Patent, col. 4:35-62).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., a caller) with a "second entity" (e.g., a call center agent) as a dynamic, auction-like process ('420 Patent, col. 1:57-2:4). Rather than using static rules, the system performs an "automated optimization" that considers not only the characteristics of the caller and agent but also the "economic surplus" of a potential match and the "opportunity cost" of making a particular agent unavailable for other potential calls ('420 Patent, Abstract). This is intended to create a more globally efficient allocation of resources.
• Technical Importance: This approach represents a shift from static, rule-based call distribution to a dynamic, economic model for real-time resource allocation within a telecommunications network ('420 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint asserts exemplary method claims, and independent Claim 1 is representative ('420 Patent, col. 31:3-28; Compl. ¶15).
• Essential elements of Claim 1 include:
  • Receiving call classification information for a plurality of calls.
  • Representing a plurality of agent characteristics for a plurality of agents.
  • Determining an optimum set of concurrent mutually exclusive associations of agents with calls.
  • The determination must be dependent on a "multifactorial optimization" of the weighted correspondence between call characteristics and agent characteristics.
  • Controlling the concurrent call routing based on the determination.
• The complaint reserves the right to assert additional claims (Compl. ¶15).

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

• Patent Identification: U.S. Patent No. 10,491,748, "Intelligent communication routing system and method", issued November 26, 2019.

The Invention Explained

• Problem Addressed: The patent addresses the same technical problem as the '420 Patent: the inefficiency inherent in traditional, non-optimized call center routing systems ('748 Patent, col. 2:26-54).
• The Patented Solution: The invention is a communications routing system that formalizes the matching process as a "series of auctions" ('748 Patent, col. 39:13-21). A router selects communication paths between sources and targets based on a "valuation function" that is sensitive to both "economic factors" (e.g., efficiency, cost) and "non-economic factors" (e.g., quality of skill match), with the value of non-economic factors changing over time ('748 Patent, Abstract). This allows the system to make routing decisions that balance multiple, sometimes competing, objectives.
• Technical Importance: The technology provides a formal auction-based framework for resolving communications routing, allowing for the integration of complex economic and non-economic variables into real-time decision-making ('748 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint asserts exemplary claims, and independent Claim 1 is representative ('748 Patent, col. 39:3-21; Compl. ¶21).
• Essential elements of Claim 1 include:
  • A communications router that defines concurrent communication paths.
  • The router "conducts a series of auctions" to select paths.
  • The auctions determine winners based on a "valuation function" sensitive to both "economic factors and non-economic factors."
  • The non-economic factors have a time-variable effect on the auction outcome and are valued at the time of the auction.
• The complaint reserves the right to assert additional claims (Compl. ¶21).

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

• Patent Identification: U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing", issued April 4, 2006.
• Technology Synopsis: This patent addresses inefficient call routing by disclosing a system that computes a "cost-utility function" to select an optimal agent for a call (Compl. ¶11; '979 Patent, Abstract). The system considers factors such as caller and agent characteristics, call center capacity, and the value of potential training opportunities to make a routing decision that aims to optimize long-term call center operation ('979 Patent, Fig. 1).
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶30).
• Accused Features: Defendant's communication systems that route customers to agents are accused of infringement (Compl. ¶30).

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

• Patent Identification: U.S. Patent No. 7,269,253, "Telephony control system with intelligent call routing", issued September 11, 2007.
• Technology Synopsis: As a continuation of the '979 patent family, this patent similarly describes an intelligent call routing system for a telephony environment (Compl. ¶12; '253 Patent, col. 1:12-20). The invention focuses on using a processor to perform a combinatorial optimization based on call classifications and agent skill scores to determine an optimal agent selection, which then directly controls the routing of the call ('253 Patent, Abstract).
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶36).
• Accused Features: Defendant's communication systems that perform call routing are accused of infringement (Compl. ¶36).

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

• Patent Identification: U.S. Patent No. 9,456,086, "Method and system for matching entities in an auction", issued September 27, 2016.
• Technology Synopsis: This patent, related to the '420 Patent, describes a method for matching entities using an auction framework (Compl. ¶13; '086 Patent, Abstract). The system defines targeting parameters for a first entity (e.g., a caller) and characteristic parameters for a plurality of second entities (e.g., agents) and performs an automated optimization considering the economic surplus of a match and the opportunity cost of that resource's unavailability ('086 Patent, Abstract).
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶42).
• Accused Features: Defendant's systems that match customers with service agents are accused of infringement (Compl. ¶42).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any of Defendant’s products or services by name. It refers to them generally as the "Exemplary Defendant Products" (Compl. ¶15). Given that Defendant is a credit union, the accused instrumentalities are presumably its customer service platforms, such as its telephone call centers or online chat systems.
• Functionality and Market Context: The complaint alleges that the accused products perform intelligent routing of customer communications to service agents (Compl. ¶15, ¶21). The infringement allegations, which incorporate by reference claim charts that were not provided with the complaint, suggest that these systems use algorithmic methods to determine the optimal pairing of a customer with an agent based on various factors (Compl. ¶17, ¶26). No probative visual evidence provided in complaint. The complaint does not provide sufficient detail for analysis of the products' commercial importance or market positioning.

IV. Analysis of Infringement Allegations

The complaint incorporates by reference claim chart exhibits for each asserted patent; however, these exhibits were not filed with the complaint (Compl. ¶18, ¶27, ¶33, ¶39, ¶48). The infringement theory is therefore summarized in prose based on the complaint's narrative allegations.

'420 Patent Infringement Allegations
The complaint alleges that Defendant's products practice the claimed method by receiving and classifying incoming calls, representing the characteristics of its available agents, and using a "multifactorial optimization" to determine the "optimum set of concurrent mutually exclusive associations" between callers and agents, thereby controlling how calls are routed (Compl. ¶17; '420 Patent, col. 31:3-28).

'748 Patent Infringement Allegations
The complaint alleges that Defendant’s routing systems function as a communications router that "conducts a series of auctions" to select communication paths (Compl. ¶26; '748 Patent, col. 39:3-21). This process allegedly uses a "valuation function" that considers both economic and non-economic factors to determine the winning, or optimal, agent for a given customer communication (Compl. ¶26).

• Identified Points of Contention:
  • Technical Questions: A central question will be whether Defendant's routing systems perform the specific functions claimed. For the '420 Patent, this raises the question of what evidence demonstrates a "multifactorial optimization" that considers "economic surplus" and "opportunity cost." For the '748 Patent, this raises the question of what evidence shows the system "conducts a series of auctions" based on a "valuation function" as distinct from a more conventional rules-based routing engine.
  • Scope Questions: The dispute may turn on the scope of the claim terms. For instance, with respect to the '748 Patent, a key question is whether Defendant's process of scoring and assigning agents to callers legally constitutes "conduct[ing] a series of auctions," a term with a specific technical and legal meaning.

V. Key Claim Terms for Construction

• Term 1: "multifactorial optimization" ('420 Patent, Claim 1)
  • Context and Importance: This term is the central algorithmic step in Claim 1 of the '420 Patent. The outcome of the infringement analysis may depend on whether Defendant's system performs a process that meets this definition, as opposed to a simpler matching or sorting process.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes various optimization goals, such as for a "cost-utility function," which could support a broad interpretation covering any algorithm that seeks to optimize an outcome based on multiple variables ('420 Patent, col. 24:30-41).
    • Evidence for a Narrower Interpretation: The abstract and detailed description frame the optimization in specific economic terms, such as maximizing "economic surplus" and considering "opportunity cost," which may support a narrower construction requiring a specific type of economic calculation rather than a generic multi-variable analysis ('420 Patent, Abstract; col. 24:50-65).
• Term 2: "conducts a series of auctions" ('748 Patent, Claim 1)
  • Context and Importance: This term defines the core functionality of the claimed router. Infringement will likely depend on whether Defendant’s system, which is unlikely to be explicitly labeled an "auction" system, can be shown to operate in a manner that meets the legal construction of this term.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent uses the term "auction" in the context of a system that selects winners based on a valuation function, which could be argued to broadly cover any competitive selection process where potential targets are scored and ranked ('748 Patent, col. 39:13-21).
    • Evidence for a Narrower Interpretation: The term "auction" typically implies a formal process of bidding or competitive valuation. Language in the specification referring to determining "winners based on a valuation function" may suggest a more structured process is required than simply routing to the highest-scoring agent in a list ('748 Patent, col. 39:13-17).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the '748 and '086 Patents. The basis for inducement is Defendant's alleged distribution of "product literature and website materials" that instruct end users on how to use the accused systems in a manner that allegedly infringes (Compl. ¶24, ¶45).
• Willful Infringement: While the complaint does not contain an explicit count for willful infringement, it alleges that Defendant has "Actual Knowledge of Infringement" for the '748 and '086 Patents "at least since being served by this Complaint" (Compl. ¶23-25, ¶44-46). This allegation forms a basis for potential claims of post-filing willful infringement and enhanced damages.

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

• A core issue will be one of technical implementation: Does the defendant's customer service platform perform the specific, economically-defined "multifactorial optimization" or "auction" processes as claimed in the patents, or does it operate on a simpler, non-infringing rules-based or best-match logic? The complaint's lack of specific factual allegations regarding the accused systems' operations makes this a central evidentiary hurdle.
• The case will also turn on a question of definitional scope: How broadly will the court construe key claim terms such as "multifactorial optimization," "economic surplus," and "conducts a series of auctions"? A broad, functional interpretation may favor the plaintiff's infringement theories, while a narrower construction tied to the specific economic models detailed in the patent specifications could present a significant challenge.