DCT

3:25-cv-00375

Honeywell Intl Inc v. Patent Armory Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 3:25-cv-00375, W.D.N.C., 06/05/2025
  • Venue Allegations: Plaintiff Honeywell, a North Carolina-based company, alleges that venue is proper in the Western District of North Carolina because Defendant Patent Armory is subject to personal jurisdiction in the district due to its prior patent infringement lawsuit filed against Honeywell and its history of filing lawsuits against other companies with facilities in North Carolina.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its customer service systems do not infringe five of Defendant’s patents related to intelligent call routing and resource matching, which Defendant previously asserted against Plaintiff in a separate lawsuit in the Eastern District of Texas.
  • Technical Context: The technology concerns automated call distribution (ACD) systems for call centers, which use algorithms to match incoming communications with available resources, such as customer service agents, based on various characteristics to optimize for economic value or efficiency.
  • Key Procedural History: This declaratory judgment action was filed by Honeywell in response to a patent infringement lawsuit brought by Patent Armory in the Eastern District of Texas on April 2, 2025. Honeywell alleges that several of the asserted patents expired prior to the filing of the Texas lawsuit. The complaint also references a prosecution history disclaimer made during the prosecution of the ’086 Patent, where the patentee allegedly distinguished the claimed invention from prior art based on the calculation of an "opportunity cost," potentially narrowing the scope of that term.

Case Timeline

Date Event
2003-03-07 Earliest Priority Date for ’420, ’979, and ’086 Patents
2005-09-12 Earliest Priority Date for ’253 Patent
2006-04-03 Earliest Priority Date for ’748 Patent
2006-04-04 ’979 Patent Issued
2007-09-11 ’253 Patent Issued
2016-09-27 ’086 Patent Issued
2019-03-19 ’420 Patent Issued
2019-10-14 ’253 Patent Expired
2019-11-26 ’748 Patent Issued
2023-11-13 ’979 Patent Expired
2024-03-05 ’420 Patent Expired
2025-04-02 Patent Armory files Texas Lawsuit against Honeywell
2025-06-05 Complaint for Declaratory Judgment Filed

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 section describes inefficiencies in traditional call center management, where simple routing rules like first-come-first-served fail to account for the varying skills of agents or the specific needs of callers, leading to suboptimal resource allocation (’420 Patent, col. 1:26-2:24).
  • The Patented Solution: The invention proposes a method for matching a “first entity” (e.g., a caller) with a “second entity” (e.g., an agent) by performing an automated, multifactorial optimization. This optimization considers not only the characteristics of the caller and the skills of the agent but also calculates an "economic surplus" for a potential match and the "opportunity cost" of making that agent unavailable for other potential calls (’420 Patent, Abstract; col. 6:30-45). The system uses data vectors to represent call and agent characteristics to facilitate this complex matching process (’420 Patent, Fig. 3).
  • Technical Importance: This approach represented a move beyond simple skills-based routing toward a more holistic, economic-based optimization of call center resources, aiming to maximize overall value rather than just handling the next call in queue (’420 Patent, col. 2:25-34).

Key Claims at a Glance

  • The complaint identifies independent method claim 20 as being asserted (Compl. ¶ 37).
  • Essential elements of claim 20 include:
    • estimating at least one content-specific or requestor-specific characteristic associated with each received request;
    • determining availability of a plurality of alternate target resources, each having at least one respective target characteristic;
    • evaluating, with at least one automated processor, a plurality of alternate allocations of the request with different targets, according to a ranking dependent on a probabilistic predictive multivariate evaluator; and
    • generating a control signal to control the allocations of the request with the different targets.
  • The complaint suggests Patent Armory has not asserted other claims of the ’420 patent (Compl. ¶ 37).

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

The Invention Explained

  • Problem Addressed: The patent addresses the challenge of intelligently routing communications in a resource-constrained environment, such as a call center, where assigning a resource to one communication makes it unavailable for others (’748 Patent, col. 23:46-51).
  • The Patented Solution: The invention claims a method for assigning communications by calculating an "expected economic value" for each potential pairing of a communication with a resource. This calculation is based on both a "score" associated with the resource's availability and a "communication-content dependent value function" that estimates the outcome's value (’748 Patent, Abstract). The system then assigns the communication based on this estimated economic value, aiming for a globally optimal routing decision (’748 Patent, col. 11:51-56).
  • Technical Importance: The technology provides a framework for making routing decisions based on quantifiable economic predictions, allowing a call center to prioritize assignments that are expected to generate the most value, rather than simply matching skills or clearing a queue (’748 Patent, col. 24:26-43).

Key Claims at a Glance

  • The complaint identifies independent method claim 11 as being asserted (Compl. ¶ 53).
  • Essential elements of claim 11 include:
    • receiving a plurality of respective communications for association with a respective resource;
    • identifying a plurality of available resources, each having a limited quantitative capacity and an availability state;
    • calculating a respective score associated with each available resource dependent on its availability state;
    • estimating an expected economic value for associating each communication with each resource, dependent on the score and a communication-content dependent value function; and
    • assigning each communication to a resource based on the estimated expected economic value.
  • The complaint does not mention any assertion of dependent claims (Compl. ¶ 53).

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

  • Technology Synopsis: The patent describes a communications method that receives communications with associated classification information and determines an "optimum target" from at least three potential targets. The determination is made using "combinatorial optimization" based on the communication's classification and the targets' characteristics (’253 Patent, Abstract).
  • Asserted Claims: Independent method claim 10 (Compl. ¶ 66).
  • Accused Features: The complaint alleges that Patent Armory accuses Honeywell’s customer service system of infringing the ’253 patent by using the NICE CXone platform to perform skill-based routing of calls (Compl. ¶¶ 76-79).

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

  • Technology Synopsis: The patent discloses a method for determining an "optimum target" for a communication by using a "multivariate cost function" that compares at least three potential targets. The selection is based on the communication's classification and the characteristics of the targets, with the determination and routing steps performed in a "common operating environment" (’979 Patent, Abstract).
  • Asserted Claims: Independent method claim 10 (Compl. ¶ 85).
  • Accused Features: The complaint alleges that Patent Armory accuses Honeywell's customer service system of infringing the ’979 patent by using the NICE CXone platform, which runs on Amazon Web Services, to perform skill-based routing (Compl. ¶¶ 96-98).

U.S. Patent No. 9,456,086 - "Intelligent communication routing system and method"

  • Technology Synopsis: The patent claims a method for matching a first entity with a second entity by performing an "economic optimization" that seeks to maximize a "normalized economic surplus." A key aspect of this optimization is the consideration of an "opportunity cost" related to the unavailability of the second entity as a result of the match (’086 Patent, Abstract).
  • Asserted Claims: Independent method claim 11 and dependent claim 18 (Compl. ¶ 103).
  • Accused Features: The complaint alleges that Patent Armory accuses Honeywell of performing a cost-benefit analysis that accounts for an agent being unable to handle other calls, which Honeywell argues is not the same as the claimed "opportunity cost" that was distinguished over the prior art during prosecution (Compl. ¶¶ 108-109).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are Honeywell's Customer Service system and its use of the CXone Solution offered by NICE (Compl. ¶ 9).

Functionality and Market Context

The complaint alleges that the accused functionality involves intelligent, data-driven routing of customer communications to customer service agents (Compl. pp. 10, 15). The complaint contends that this functionality is provided by the "CXone intelligent routing engine," which is part of the NICE CXone platform, a third-party product used by Honeywell (Compl. ¶¶ 46-47, 76-79). The complaint provides a network diagram from a NICE datasheet, which shows that customer calls are managed by a "Traffic Monitoring and Queuing Platform" and routed by "CXone Platform Media Servers," allegedly operated by NICE, not Honeywell (Compl. p. 10). Honeywell’s central allegation is that the technology and services accused of infringement are provided and controlled by NICE (Compl. ¶¶ 47, 77, 97, 110).

IV. Analysis of Infringement Allegations

U.S. Patent No. 10,237,420 Infringement Allegations

Claim Element (from Independent Claim 20) Alleged Infringing Functionality Complaint Citation Patent Citation
estimating at least one content-specific or requestor-specific characteristic associated with each received request; Allegedly using the nature of a call to determine characteristics for routing. ¶44 col. 6:21-25
determining availability of a plurality of alternate target resources, each respective target resource having at least one respective target characteristic; Allegedly performed by the NICE CXone software, which identifies available agents and their skill sets. The complaint includes a diagram from a NICE datasheet illustrating this process, showing patrons' calls being routed to agents via the CXone platform (Compl. p. 10). ¶¶46-48 col. 7:42-50
evaluating, with at least one automated processor, a plurality of alternate allocations of the respective received request with different available targets, according to a ranking dependent on a probabilistic predictive multivariate evaluator...; and Allegedly using the nature of the call and agent availability/skill to determine an allocation. The complaint asserts that Patent Armory has failed to identify any "probabilistic predictive multivariate evaluator" in Honeywell's system. ¶44 col. 6:30-45
generating a control signal, by the at least one automated processor, selectively dependent on the evaluating, to control the allocations of the respective received request... Allegedly routing the call to the selected agent. The complaint alleges this is performed by NICE’s CXone platform hosted on NICE’s servers. ¶47 col. 8:1-5
  • Identified Points of Contention:
    • Divided Infringement: A central question is whether Honeywell performs all steps of the claimed method. The complaint alleges that key steps, such as determining resource availability and routing communications, are performed by NICE's software on NICE's servers, raising the issue of whether infringement can be attributed to Honeywell (Compl. ¶¶ 46-48).
    • Technical Scope: The analysis may turn on whether the accused system's logic for matching calls to agents based on skills and availability meets the specific claim requirement of a "probabilistic predictive multivariate evaluator." The complaint suggests a potential mismatch by questioning the existence of such an evaluator in the accused system (Compl. ¶ 44).

U.S. Patent No. 10,491,748 Infringement Allegations

Claim Element (from Independent Claim 11) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving a plurality of respective communications for association with a respective resource...; Allegedly receiving customer calls for routing to available agents. ¶117 col. 6:21-23
identifying a plurality of resources available for association with a respective communication...each available resource having a limited quantitative capacity for association with multiple communications and an availability state; Allegedly determining the group of available agents. The complaint cites NICE documentation stating the "CXone intelligent routing engine matches customer requests based on skills" (Compl. p. 10). ¶¶60-61, 117 col. 7:42-50
calculating a respective score associated with each available resource dependent on the availability state...; The complaint does not provide sufficient detail for analysis of this element. ¶117 col. 7:51-54
estimating an expected economic value to be obtained by associating each respective communication with each respective available resource...; and Allegedly determining an appropriate agent for handling a call. The complaint argues that Patent Armory has provided no evidence for an "economic value." ¶61, 117 col. 8:1-13
assigning each of the plurality of respective communications to one of the plurality of resources based on at least the estimated expected economic value... Allegedly routing the call to the determined agent. ¶117 col. 8:14-17
  • Identified Points of Contention:
    • Evidentiary Basis: A key factual question will be what evidence exists to show that the accused system performs the step of "estimating an expected economic value." The complaint alleges that Patent Armory’s infringement analysis is "wholly deficient" on this point and points to no evidence of an economic calculation (Compl. ¶ 61).
    • Definitional Scope: The dispute may hinge on whether the accused system's method of determining an "appropriate agent" can be construed as "estimating an expected economic value" as required by the claim.

V. Key Claim Terms for Construction

For the ’420 Patent:

  • The Term: "probabilistic predictive multivariate evaluator" (Claim 20)
  • Context and Importance: This term appears to define the core computational engine of the claimed invention. The infringement analysis will likely depend on whether the accused system's routing logic, which the complaint characterizes as skills-based, falls within the scope of this term. Practitioners may focus on this term because the complaint alleges a failure by Patent Armory to identify any such component in the accused system (Compl. ¶ 44).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification of the related ’979 Patent states that the evaluator may comprise "at least one of a probabilistic function, a hierarchical Markov model, Bayesian logic, and a neural network," suggesting the term is not limited to a single algorithm (’979 Patent, col. 13:3-7).
    • Evidence for a Narrower Interpretation: The prosecution history of the ’420 Patent, as cited in the complaint, notes that allowability was based on limitations including a "probabilistic function," which may suggest that the probabilistic nature is a mandatory, not optional, feature (Compl. ¶ 43).

For the ’748 Patent:

  • The Term: "expected economic value" (Claim 11)
  • Context and Importance: This term is central to the final two steps of the claim and distinguishes the invention from simple resource matching. Whether the accused system calculates anything that can be defined as an "economic value" is a critical point of contention. Practitioners may focus on this term as the complaint alleges a complete lack of evidentiary support for it in Patent Armory's infringement contentions (Compl. ¶ 61).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the "economic value" in terms of achieving "business goals," which can include not only direct profit but also metrics like "customer satisfaction" that can be "converted and normalized into economic terms," potentially supporting a broad definition (’748 Patent, col. 24:34-40).
    • Evidence for a Narrower Interpretation: The claim language links the "economic value" to a "communication-content dependent value function of an outcome," suggesting it must be tied to a specific, calculated prediction of the outcome of the communication itself, not just a general business goal (’748 Patent, col. 12:5-9).

VI. Other Allegations

  • Indirect Infringement: The complaint states that Patent Armory has alleged induced infringement of the ’748, ’979, and ’086 Patents (Compl. ¶¶ 55, 95, 105). Honeywell argues that there can be no inducement because there is no underlying direct infringement (Compl. ¶ 57). For the expired ’979 Patent, Honeywell specifically argues it could not possess the requisite knowledge for inducement, as it was only notified of the alleged infringement in April 2025, years after the patent expired in 2023 (Compl. ¶ 95).
  • Willful Infringement: The complaint does not allege that Patent Armory has made a claim of willful infringement. However, the allegations regarding Patent Armory asserting expired patents could be used by Honeywell to support a claim for attorneys' fees under 35 U.S.C. § 285 (Prayer for Relief ¶F).

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

  • A central issue will be one of divided infringement: can Patent Armory establish that Honeywell directs or controls the NICE CXone platform to the extent that all steps of the asserted method claims are attributable to a single actor, or does the use of a third-party vendor defeat the claim of direct infringement as a matter of law?
  • A key evidentiary question will be one of technical operation: what evidence demonstrates that the accused skills-based routing system performs the specific functions required by the claims, such as calculating an "expected economic value" or employing a "probabilistic predictive multivariate evaluator," versus simply matching predefined skills to available agents?
  • A threshold legal issue will be the temporal scope of liability: can Patent Armory maintain infringement claims, particularly for ongoing infringement or inducement, for patents that expired before the original Texas lawsuit was filed, raising questions about the viability of those claims and the good faith basis for their assertion?