Patent Armory Inc v. LEDO Pizza System Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory, Inc. (Canada)
  • Defendant: Ledo Pizza System, Inc. (Maryland)
  • Plaintiff’s Counsel: DNL ZITO CASTELLANO; Rabicoff Law LLC
• Case Identification: 8:24-cv-01496, D. Md., 05/22/2024
• Venue Allegations: Venue is alleged to be proper as Defendant maintains an established place of business within the District of Maryland.
• Core Dispute: Plaintiff alleges that Defendant’s customer communication and ordering systems infringe five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents relate to optimizing the allocation of incoming communications (e.g., customer calls) to available resources (e.g., call center agents) by using multi-factorial, utility-based, or economic models instead of simple, sequential routing rules.
• Key Procedural History: The complaint does not allege any significant prior litigation, licensing history, or other procedural events related to the patents-in-suit.

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's background describes the inefficiencies of traditional call center management, which often uses simple first-come-first-served or longest-idle-agent rules for call distribution, leading to suboptimal use of resources, especially when agents have varying skills. (ʼ420 Patent, col. 1:26–2:67).
• The Patented Solution: The invention proposes a system that treats the matching of an incoming communication (a "first entity") to an available agent (a "second entity") as a type of auction. It defines data profiles for both the caller and the available agents and then performs an "automated optimization" that considers not only the best match but also the "economic surplus" of that match and the "opportunity cost" of making that agent unavailable for other potential matches. (’420 Patent, Abstract; col. 21:5–22:42). This allows for a more dynamic and globally efficient allocation of resources than static routing rules.
• Technical Importance: The technology represents a move toward applying economic and optimization theories to telecommunications routing, aiming to improve overall system efficiency beyond simple queue management. (’420 Patent, col. 4:1–9).

Key Claims at a Glance

• The complaint alleges infringement of "one or more claims" without specifying which ones, instead incorporating by reference unprovided claim charts (Compl. ¶¶15, 17). Claim 1, as the first independent method claim, is representative:
  • A method for matching a first entity with at least one second entity selected from a plurality of second entities, comprising:
  • defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity and a plurality of multivalued scalar data of each of the plurality of second entities, representing respective characteristic parameters for each respective second entity; and
  • performing an automated optimization with respect to an economic surplus of a respective match of the first entity with the at least one of the plurality of second entities, and an opportunity cost of the unavailability of the at least one of the plurality of second entities for matching with an alternate first entity.
• The complaint does not explicitly reserve the right to assert dependent claims.

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: Similar to the ’420 Patent, the background addresses the shortcomings of conventional call centers that struggle to balance customer service quality with the efficient use of resources, particularly in environments with high call volumes and agents with diverse skill sets. (ʼ748 Patent, col. 1:19–2:61).
• The Patented Solution: The invention describes an "intelligent" routing system that determines an optimal routing path by maximizing an "aggregate utility." (’748 Patent, Abstract). The system considers predicted characteristics of both the communication source (e.g., caller) and potential targets (e.g., agents). As illustrated in Figure 1, this can involve optimizing a cost-utility function for either short-term efficiency or long-term call center operation, which may include factors like agent training. (ʼ748 Patent, col. 23:23–24:46; Fig. 1).
• Technical Importance: This approach allows a routing system to make decisions based on a holistic, long-term view of a call center's operational goals, such as developing agent skills, rather than solely on immediate call-handling metrics. (’748 Patent, col. 27:8–14).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the ’748 Patent without specification, relying on unprovided claim charts (Compl. ¶¶21, 26). Independent method claim 1 is representative:
  • A communications routing system, comprising:
  • representing a plurality of predicted characteristics of a plurality of communications sources, each having an economic utility;
  • representing a plurality of predicted characteristics of a plurality of communications targets each having an economic utility; and
  • determining an optimal routing between the plurality of communications sources and the plurality of communications targets, by maximizing an aggregate utility with respect to the respective predicted characteristics of communications source and communications destination represented by linkages.
• The complaint does not explicitly reserve the right to assert dependent claims.

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

• Patent Identification (Multi-Patent Capsule): U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing," issued April 4, 2006.

Technology Synopsis

This patent describes a communications management system that uses a database of agent skills and a database of skill weights corresponding to a communication's classification to compute an optimal agent selection. The system is designed to directly control the routing of the communication based on this computation. (’979 Patent, Abstract).

Asserted Claims

The complaint asserts unspecified claims from the ’979 Patent (Compl. ¶30).

Accused Features

The complaint alleges that unspecified "Exemplary Defendant Products" infringe the patent but provides no details, instead incorporating by reference an unprovided exhibit (Compl. ¶¶30, 32).

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

• Patent Identification (Multi-Patent Capsule): U.S. Patent No. 7,269,253, "Telephony control system with intelligent call routing," issued September 11, 2007.

Technology Synopsis

This patent, related to the ’979 Patent, discloses a system where characteristics of communications and at least three potential targets are stored, and an optimal target is determined for each communication through a combinatorial optimization. The optimization considers a cost-benefit analysis and may factor in the predicted availability of a target. (’253 Patent, Abstract).

Asserted Claims

The complaint asserts unspecified claims from the ’253 Patent (Compl. ¶36).

Accused Features

The complaint alleges that unspecified "Exemplary Defendant Products" infringe the patent but provides no details, instead incorporating by reference an unprovided exhibit (Compl. ¶¶36, 38).

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

• Patent Identification (Multi-Patent Capsule): 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 a first entity with a second entity by defining multivalued scalar data representing their respective parameters. It then performs an automated optimization based on the economic surplus of a potential match and the opportunity cost of making that second entity unavailable for other matches. (’086 Patent, Abstract).

Asserted Claims

The complaint asserts unspecified claims from the ’086 Patent (Compl. ¶42).

Accused Features

The complaint alleges that unspecified "Exemplary Defendant Products" infringe the patent but provides no details, instead incorporating by reference an unprovided exhibit (Compl. ¶¶42, 47).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused products, methods, or services by name. It refers generically to "Exemplary Defendant Products" throughout the infringement counts (Compl. ¶¶15, 21, 30, 36, 42).

Functionality and Market Context

The complaint alleges that the accused products "practice the technology claimed" by the patents-in-suit but provides no specific details regarding their technical functionality (Compl. ¶¶17, 26, 32, 38, 47). Given that the Defendant is a pizza franchise system, the accused instrumentalities are presumably its customer-facing telephone and online ordering systems, which route customer communications to appropriate franchise locations or employees. The complaint makes no allegations regarding the products' commercial importance or market positioning.

IV. Analysis of Infringement Allegations

No probative visual evidence provided in complaint.

The complaint does not contain narrative infringement allegations or claim charts mapping claim elements to accused functionalities. Instead, it incorporates by reference Exhibits 6, 7, 8, 9, and 10, which are described as containing claim charts but are not included with the complaint (Compl. ¶¶17-18, 26-27, 32-33, 38-39, 47-48). Therefore, a claim chart summary cannot be constructed from the provided documents.

• Identified Points of Contention: Based on the abstract nature of the patent claims and the context of the Defendant's business, the central infringement disputes may revolve around the following questions:
  • Scope Questions: Can the claims, which use terms like "auction," "economic surplus," and "optimizing an aggregate utility," be construed to cover the process of routing a customer's pizza order to a local franchise? The case may question whether a conventional commercial transaction system performs the complex, economic-based optimization required by the claims.
  • Technical Questions: What evidence does the complaint provide that the Defendant's systems perform the specific steps of defining "multivalued scalar data" for callers and service agents, and then executing an "automated optimization" based on "opportunity cost," as recited in the claims of the ’420 Patent? The complaint's lack of factual detail on the technical operation of the accused systems suggests that demonstrating a functional match will be a key point of contention.

V. Key Claim Terms for Construction

• The Term: "automated optimization with respect to an economic surplus ... and an opportunity cost" (from ’420 Patent, Claim 1).
• Context and Importance: This phrase encapsulates the core inventive concept of the ’420 Patent. Practitioners may focus on this term because its construction will determine whether the claim reads on conventional routing systems or is limited to systems performing specific, complex economic calculations. The dispute will likely center on whether the Defendant's system performs a simple "best match" routing or a true "optimization" that weighs the economic value and opportunity cost of each potential match.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the goal of call centers in general terms, such as to "make efficient use of call center resources," which may support a broader view of what constitutes an "economic" optimization (’420 Patent, col. 1:33-35).
  • Evidence for a Narrower Interpretation: The specification provides detailed examples of cost-utility functions that include specific inputs like agent salary, training costs, anticipated sales volume, and profit, suggesting a narrower interpretation tied to explicit financial calculations (’420 Patent, col. 23:53–24:67).
• The Term: "maximizing an aggregate utility" (from ’748 Patent, Claim 1).
• Context and Importance: This term is central to the infringement analysis for the ’748 Patent. The case may turn on whether the accused system performs a function that can be characterized as "maximizing utility." A defendant would likely argue its system follows simple rules, while the plaintiff would argue those rules inherently, if not explicitly, serve to maximize a utility function.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes "business goals" that contribute to utility, including non-monetary factors like "customer satisfaction," which could support a broader definition of utility beyond a strict mathematical value (’748 Patent, col. 24:37-41).
  • Evidence for a Narrower Interpretation: The specification provides a specific mathematical formula for calculating utility, An=Max({[Acn1Σ(rs₁ans₁)+Acn2]+Bcn}+Ccn)+Dcn>, which includes terms for agent cost, anticipated value of the transaction, and opportunity cost. This detailed formula could support a narrower construction limited to systems that implement such multi-part calculations (’748 Patent, col. 24:47–67).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 Patents. It claims Defendant distributes "product literature and website materials" that instruct and encourage infringement and sells products to customers for infringing uses (Compl. ¶¶24, 25, 45, 46). The complaint states that Exhibits 7 and 10 provide extensive references to these materials, but these exhibits are not provided.
• Willful Infringement: Willfulness allegations for the ’748 and ’086 Patents are based on "Actual Knowledge of Infringement" allegedly established by the service of the complaint and its attached (but unprovided) claim charts (Compl. ¶¶23, 44). This suggests a theory of post-suit willfulness.

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

• A central evidentiary question will be one of technical implementation: what evidence will be produced to show that the Defendant's customer ordering system, which connects customers to pizza stores, performs the complex "automated optimization" based on "economic surplus" and "opportunity cost" as recited in the asserted claims, rather than a conventional routing logic?
• A core issue will be one of definitional scope: can terms like "auction" and "maximizing an aggregate utility," which are described in the patents with detailed economic and mathematical context, be construed broadly enough to read on the processes of a commercial food ordering and delivery system?
• Given the complaint's reliance on unprovided exhibits for identifying the accused products and mapping infringement, a preliminary question may be the sufficiency of the pleadings under federal rules, and whether the allegations provide plausible, non-conclusory facts to support the claims of infringement.