Patent Armory Inc v. Liberty Sport Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Liberty Sport, Inc. (New Jersey)
  • Plaintiff’s Counsel: Garibian Law; Rabicoff Law LLC
• Case Identification: 1:24-cv-09762, D.N.J., 10/13/2024
• Venue Allegations: Venue is alleged to be proper in the District of New Jersey based on Defendant maintaining an established place of business in the district, committing acts of infringement in the district, and causing harm to the Plaintiff in the district.
• Core Dispute: Plaintiff alleges that Defendant infringes five patents related to intelligent call routing and auction-based systems for matching entities in telecommunications environments.
• Technical Context: The technology concerns advanced methods for routing communications, such as telephone calls in a call center, to the most appropriate agent by using complex optimizations rather than simple queuing rules.
• Key Procedural History: The five patents-in-suit belong to two distinct but related families. U.S. Patent Nos. 7,023,979 and 7,269,253 share a common priority date and subject matter related to intelligent call routing. U.S. Patent Nos. 10,237,420, 9,456,086, and 10,491,748 appear to stem from a common provisional application and relate to auction-based matching and intelligent routing systems. The overlapping subject matter and prosecution history across these families may be relevant for claim construction.

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 (Issued Mar. 19, 2019)

The Invention Explained

• Problem Addressed: The patent's background describes the inefficiency of traditional call center routing systems that rely on simple rules like first-in, first-out queues or longest-idle-agent assignments. These methods fail to account for the varying skills of agents and the specific needs of callers, leading to suboptimal pairings, such as routing a customer to an under-skilled agent or assigning a highly-skilled specialist to a routine inquiry (’420 Patent, col. 4:11-34).
• The Patented Solution: The invention proposes a system that treats call routing as an economic auction. It matches a "first entity" (e.g., a caller) with an optimal "second entity" (e.g., an agent) from a pool of available agents by performing an "automated optimization" (’420 Patent, Abstract). This optimization is not just based on skill matching; it explicitly considers the "economic surplus" of a successful match and the "opportunity cost" of making that specific agent unavailable for other potential calls that may be more valuable (’420 Patent, Abstract; col. 21:4-16). Figure 8 illustrates this process as a multifactorial optimization to determine an "optimum set of concurrent mutually exclusive associations" between calls and agents (’420 Patent, Fig. 8).
• Technical Importance: This approach introduced a more sophisticated, economic-based model for resource allocation in real-time communications, aiming to maximize the overall value generated by a call center rather than just minimizing wait times (’420 Patent, col. 2:35-39).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the patent, including "exemplary method claims" (Compl. ¶15). The first independent method claim is Claim 1.
• Independent Claim 1:
  • Defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity;
  • Defining a plurality of multivalued scalar data for each of a plurality of second entities, representing their characteristic parameters; and
  • Performing an automated optimization with respect to an economic surplus of a match and an opportunity cost of the unavailability of the second entity for an alternate match.
• 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 (Issued Nov. 26, 2019)

The Invention Explained

• Problem Addressed: Like its related patents, the ’748 Patent addresses the inefficiencies in conventional call centers, where routing decisions are not optimized based on agent skills, caller needs, and broader business goals (’748 Patent, col. 2:44–col. 4:34).
• The Patented Solution: The patent describes a routing system that determines an optimal routing by maximizing an "aggregate utility" (’748 Patent, Abstract). The system represents callers ("communications sources") and agents ("communications targets") by their "predicted characteristics," each associated with an "economic utility." It then performs an optimization to find the best pairings. A key aspect is the integration of this intelligent routing logic into a "low-level communication server system," which reduces latency compared to systems that rely on external, high-level management software for routing decisions (’748 Patent, col. 18:9-24). Figure 1 illustrates a decision path where the system uses either simple skill-based routing or a more complex "cost-utility function" optimization depending on whether the call center is near capacity (’748 Patent, Fig. 1).
• Technical Importance: The invention's focus on integrating the optimization logic at a low level within the communication architecture itself aimed to make sophisticated, real-time routing decisions more feasible and efficient (’748 Patent, col. 18:55-62).

Key Claims at a Glance

• The complaint asserts "one or more claims" (Compl. ¶21). The first independent claim is Claim 1, a system claim.
• Independent Claim 1:
  • A communications server for receiving a communication;
  • A database storing a profile for each of a plurality of agents;
  • A processor configured to determine a relevant skill set, an associated cost, and a utility for assigning an agent; select an "optimal agent" based on a "cost-utility function"; and route the communication to that agent.
• 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 (Issued Apr. 4, 2006)

• Technology Synopsis: This patent describes a system to improve call center efficiency by moving beyond simple queuing. The invention involves a telephony control system that receives a communication, classifies it, and accesses databases of agent skills and corresponding skill weights. A processor then computes an "optimum agent selection" and directly controls the routing of the call to that agent, integrating the intelligent decision-making into the core telephony system (’979 Patent, Abstract; col. 2:45-3:34).
• Asserted Claims: The complaint asserts "one or more claims," including "exemplary method claims" (Compl. ¶30). The independent claims are 1 and 11.
• Accused Features: The complaint alleges that Defendant’s systems use an integrated processor to determine an optimal agent for a communication based on skill correspondence and then control the routing accordingly (Compl. ¶¶30, 32).

U.S. Patent No. 7,269,253 - Telephony control system with intelligent call routing (Issued Sep. 11, 2007)

• Technology Synopsis: As a continuation of the application leading to the '979 patent, this patent covers similar technological ground. It discloses a method for processing communications by estimating characteristics of the request, determining the availability of target resources (e.g., agents), and evaluating alternate allocations of the request to different targets based on a "probabilistic predictive multivariate evaluator." The system then generates a control signal to implement the optimal allocation (’253 Patent, Abstract; col. 2:45-3:34).
• Asserted Claims: The complaint asserts "one or more claims," including "exemplary method claims" (Compl. ¶36). The independent claims are 1 and 10.
• Accused Features: The complaint alleges infringement by Defendant's systems that use a predictive, multivariate evaluation to determine optimal routing for communications (Compl. ¶¶36, 38).

U.S. Patent No. 9,456,086 - Method and system for matching entities in an auction (Issued Sep. 27, 2016)

• Technology Synopsis: This patent is part of the same family as the '420 patent and describes a similar auction-based routing method. The invention involves defining "inferential targeting parameters" for a first entity (caller) and "characteristic parameters" for a plurality of second entities (agents). An automated optimization is then performed that considers the "economic surplus" of a potential match and the "opportunity cost" of making an agent unavailable for other matches, thereby determining the optimal pairing (’086 Patent, Abstract; col. 2:44-65).
• Asserted Claims: The complaint asserts "one or more claims" (Compl. ¶42). The independent claims are 1, 11, and 18.
• Accused Features: The complaint accuses Defendant's systems that match communications to agents by performing an optimization that accounts for economic factors like surplus and opportunity cost (Compl. ¶¶42, 47).

III. The Accused Instrumentality

Product Identification

• The complaint refers to the accused instrumentalities as the "Exemplary Defendant Products" (Compl. ¶15).

Functionality and Market Context

• The complaint does not identify the specific accused products by name or describe their specific functionality in the body of the complaint. This information is incorporated by reference to Exhibits 6, 7, 8, 9, and 10, which are claim charts that were not filed as part of the public complaint document (Compl. ¶¶17, 26, 32, 38, 47). The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific features, operation, or market context.

IV. Analysis of Infringement Allegations

The complaint references but does not include claim-chart exhibits that detail the infringement allegations. The analysis below summarizes the narrative infringement theory for the lead patents.

• ’420 Patent and ’086 Patent Infringement Allegations
  The complaint alleges that Defendant's products directly infringe by practicing the claimed auction-based matching method (Compl. ¶¶15, 42). The narrative infringement theory suggests that when routing communications (first entities) to available personnel (second entities), Defendant's systems perform an "automated optimization" that assesses the value of a given match ("economic surplus") and considers the impact of assigning a particular agent on overall system efficiency ("opportunity cost"). Proving that the accused systems calculate or otherwise account for these specific economic concepts will be central to Plaintiff's case.

• ’748 Patent, ’979 Patent, and ’253 Patent Infringement Allegations
  The complaint alleges that Defendant's products directly infringe by practicing the claimed intelligent routing methods (Compl. ¶¶21, 30, 36). The narrative theory suggests that Defendant's systems employ a processor to analyze incoming communications, determine the required skills, and evaluate a "cost-utility function" to select an "optimal agent" from those available. The system then controls the routing of the communication to the selected agent. The core of this allegation is that the accused systems go beyond simple rule-based routing and instead perform a multifactorial optimization to maximize value.

• Identified Points of Contention:

  • Scope Questions: A primary legal question will concern the construction of economic terms like "auction", "economic surplus", and "opportunity cost" from the ’420 and ’086 Patents. The court will need to determine if these terms require specific, formal economic calculations or if they can be construed more broadly to cover any system that weighs the value of a match against resource availability. A related question for the ’748, ’979, and ’253 Patents is what level of computational complexity is required to meet the "automated optimization" or "cost-utility function" limitations.
  • Technical Questions: A key evidentiary question will be whether Defendant's accused systems actually perform the claimed optimizations. For the ’420 and ’086 Patents, what evidence does the complaint provide that the accused system calculates or considers the "opportunity cost" of assigning an agent, as opposed to simply picking the best available agent for the current task? For the remaining patents, does the accused system's routing logic constitute a "cost-utility function," or is it a simpler, non-infringing rules engine or lookup table?
    No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

• The Term: "automated optimization" (’420 Patent, Claim 1) / "cost-utility function" (’748 Patent, Claim 1)

• Context and Importance: These terms are central to the infringement analysis for all five patents. The dispute will likely focus on whether the accused products' routing logic performs a true optimization that maximizes a defined function, as required by the claims, or uses a simpler, non-infringing heuristic. Practitioners may focus on these terms because they represent the core technical departure from prior art routing systems.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specifications describe the goal of moving beyond simple routing rules to implement "intelligent" features, which "may be, routed or other telecommunications features implemented, inferentially or intelligently, at a relatively low level" (’748 Patent, col. 18:25-29). This suggests the invention is not limited to one specific mathematical formula.
  • Evidence for a Narrower Interpretation: The specifications provide specific examples of cost functions, such as "An=Max([Acn1Σ(rs1ans1)+Acn2])", which involves maximizing a weighted sum of products (’748 Patent, col. 24:65). Defendants may argue that the claims should be limited to systems that perform this type of explicit, multi-variable mathematical optimization.

• The Term: "economic surplus" / "opportunity cost" (’420 Patent, Claim 1; ’086 Patent, Claim 1)

• Context and Importance: These terms impart specific economic concepts into the claims. Plaintiff's ability to prove infringement of the '420 and '086 patents depends on showing that the accused system accounts for these precise factors.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patents frame the overall goal as achieving a "global minimization of the cost function" (’420 Patent, col. 4:10-12) and optimizing a "cost-benefit outcome" (col. 9:66-68). This language could support a view that any system weighing benefits against costs meets the limitation, even if it does not use the formal labels "surplus" or "opportunity cost."
  • Evidence for a Narrower Interpretation: The claim language is specific. "Opportunity cost" is defined in the patent as the cost of "unavailability of the at least one of the plurality of second entities for matching with an alternate first entity" (’420 Patent, Claim 1). Defendants may argue that this requires a forward-looking calculation that considers not just the current call but potential future calls, a complex function that may not be present in the accused system.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748 and ’086 Patents. The allegations are based on Defendant allegedly distributing "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes" the patents (Compl. ¶¶24, 45).
• Willful Infringement: The complaint does not use the word "willful." However, for the ’748 and ’086 Patents, it alleges that service of the complaint constitutes "actual knowledge" and that Defendant "continues to make, use, test, sell, offer for sale, market, and/or import" infringing products despite this knowledge (Compl. ¶¶23-24, 44-45). These allegations could form the basis for a claim of post-filing willful infringement.

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

This case will likely turn on two central questions of claim scope and evidentiary proof:

• A core issue will be one of definitional scope: can the specific economic terms "auction," "economic surplus," and "opportunity cost," as claimed in the '420 and '086 patents, be construed to cover the operations of a general-purpose intelligent routing system, or do they require proof of specific, formal economic calculations that may not be present in the accused products?
• A key evidentiary question will be one of functional proof: what technical evidence can Plaintiff present to demonstrate that the accused systems perform the "automated optimization" or "cost-utility function" required by the asserted claims, as opposed to a less complex, non-infringing heuristic or rule-based method for selecting an agent? The lack of publicly available claim charts in the complaint leaves this question entirely open.