DCT

1:26-cv-00203

Patent Armory Inc v. Fourleaf Federal Credit Union

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: Patent Armory Inc. v. Fourleaf Federal Credit Union, 1:26-cv-00203, E.D.N.Y., 01/14/2026
  • Venue Allegations: Venue is alleged to be proper because the Defendant maintains an established place of business within the district and has purportedly committed acts of patent infringement in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s unidentified products and services infringe patents related to intelligent call routing for telephony systems and auction-based methods for matching entities.
  • Technical Context: The technology at issue pertains to optimizing the operation of call centers by using algorithms to intelligently match incoming communications with the most appropriate service agent.
  • Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.

Case Timeline

Date Event
2002-03-07 ’979 Patent - Earliest Priority Date
2003-03-07 ’086 Patent - Earliest Priority Date
2006-04-04 ’979 Patent - Issue Date
2016-09-27 ’086 Patent - Issue Date
2026-01-14 Complaint Filing Date

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

U.S. Patent No. 7,023,979, *“Telephony control system with intelligent call routing,”* issued April 4, 2006

The Invention Explained

  • Problem Addressed: The patent’s background section describes the inefficiencies of conventional call center management, which often relies on simple routing rules like "first-come-first-served" or static agent groupings. These approaches can lead to mismatches, such as routing a call to an "under-skilled agent" who cannot handle the issue or an "over-skilled agent" whose expertise is wasted on a simple task, reducing the call center's overall transactional throughput (’979 Patent, col. 4:25-56).
  • The Patented Solution: The invention proposes a communications management system that integrates the "intelligent" routing logic directly into the low-level telephony switching architecture (’979 Patent, col. 59:8-23). Instead of relying on an external management system, an internal processor receives a "communications classification" for an incoming call and uses a database of agent skill scores and skill weights to compute an "optimum agent selection" in real time, directly controlling how the call is routed (’979 Patent, Abstract; Fig. 1). This solution aims to reduce latency and more effectively optimize agent selection based on a multivariate analysis of skills, costs, and other factors (’979 Patent, col. 60:30-41).
  • Technical Importance: This approach sought to improve call center efficiency by making the routing decision process more dynamic and sophisticated, moving beyond simple queuing to a model where agents are selected based on a cost-utility optimization performed within the core communications system (’979 Patent, col. 60:8-23).

Key Claims at a Glance

  • The complaint asserts unspecified "exemplary method claims" of the patent (Compl. ¶12). Independent claim 10 is a representative method claim.
  • Essential elements of Independent Claim 10 include:
    • Receiving a plurality of communications, each having associated classification information.
    • Storing information representing characteristics of a plurality of potential targets.
    • Determining an optimum target for each communication based on the classification and target characteristics "using a multivariate cost function" comparing at least three potential targets.
    • Routing the communication to the optimum target, with the determining and routing steps being performed "within a common operating environment."

U.S. Patent No. 9,456,086, *“Method and system for matching entities in an auction,”* issued September 27, 2016

The Invention Explained

  • Problem Addressed: The patent addresses the challenge of optimally matching a first entity (e.g., a customer call) with a second entity (e.g., a service agent) from a pool of available options. The background suggests that simple selection methods fail to account for complex variables that affect the overall value of a match (’086 Patent, col. 3:5-13).
  • The Patented Solution: The invention describes a method for matching entities using an "auction" framework. It involves defining "inferential targeting parameters" for the first entity and "characteristic parameters" for the second entities (’086 Patent, Abstract). An automated processor then performs an optimization that considers not only the direct value of a potential match (termed "economic surplus") but also the "opportunity cost" of using a particular second entity, which makes it unavailable for other potential matches (’086 Patent, Abstract; col. 63:1-4). This allows the system to make a globally optimized decision rather than a locally optimal one.
  • Technical Importance: The invention applies principles from economic and auction theory to the technical problem of resource allocation in a communications system, creating a more sophisticated framework for matching that accounts for system-wide costs and benefits (’086 Patent, col. 49:1-50:4).

Key Claims at a Glance

  • The complaint asserts unspecified "Exemplary '086 Patent Claims" (Compl. ¶18). Independent claim 1 is a representative method claim.
  • Essential elements of Independent Claim 1 include:
    • Matching a "first subset" of entities with a "second subset."
    • Storing "inferential targeting parameters" for the first subset.
    • Storing "characteristic parameters" for the second subset.
    • Performing an optimization with an automated processor based on at least an "economic surplus" of a match and an "opportunity cost" of the unavailability of the second subset for an alternate match.
    • Outputting a signal based on the optimization.

III. The Accused Instrumentality

The complaint does not identify any specific accused products, methods, or services by name. It refers generally to "Defendant products" and "Exemplary Defendant Products" that are purportedly identified in claim charts attached as Exhibits 3 and 4 (Compl. ¶¶12, 18). As these exhibits were not provided with the complaint, the identity and specific functionality of the accused instrumentality cannot be determined from the filing. The complaint does not provide sufficient detail for analysis of the accused instrumentality.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references claim-chart exhibits that are not provided. The narrative infringement theory is summarized below in prose.

  • Infringement Allegations for the ’979 Patent:
    The complaint alleges that Fourleaf Federal Credit Union directly infringes one or more method claims of the ’979 Patent, either literally or under the doctrine of equivalents (Compl. ¶12). Infringement is alleged to occur through the Defendant’s acts of "making, using, offering to sell, selling and/or importing" the accused products, as well as through internal testing and use by employees (Compl. ¶¶12-13). The complaint states that Exhibit 3 contains claim charts that compare the asserted claims to the accused products and demonstrate that the products "satisfy all elements" of the claims (Compl. ¶14).

  • Infringement Allegations for the ’086 Patent:
    The complaint alleges that the Defendant "has been and continues to directly infringe" one or more claims of the ’086 Patent through its making, using, and selling of the accused products (Compl. ¶18). Infringement is also alleged based on internal testing and use (Compl. ¶19). The complaint incorporates by reference Exhibit 4, which it states includes claim charts detailing how the accused products practice the claimed technology (Compl. ¶23).

  • Identified Points of Contention:

    • Scope Questions: The ’086 Patent claims a method of matching entities in an "auction." A central dispute may be whether the Defendant’s system for routing member service calls, which is not a traditional auction, falls within the scope of this term as used in the patent. The analysis may question what evidence exists to suggest that the accused system calculates "economic surplus" and "opportunity cost" as required by the claims.
    • Technical Questions: For the ’979 Patent, a key technical question will concern the "multivariate cost function" used for determining an "optimum agent." The inquiry may focus on whether the accused system performs a specific, multi-factor optimization as claimed, or if it employs a more conventional routing logic, such as routing to the longest-idle agent, which may not meet the claim limitation.

V. Key Claim Terms for Construction

  • The Term: "multivariate cost function" (’979 Patent, Claim 10)

    • Context and Importance: This term is central to the inventive concept of "intelligent" routing. The outcome of the infringement analysis for the ’979 Patent will hinge on whether the accused system’s routing algorithm can be characterized as a "multivariate cost function." Practitioners may focus on this term because it distinguishes the claimed invention from simpler, pre-existing routing methods.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification describes the cost function as potentially including a wide variety of "disparate factors" normalized into a common metric, such as training cost, rewards/punishments, anticipated outcome, and business goals, which could support a broad definition encompassing any system that weighs multiple variables (’979 Patent, col. 65:4-53).
      • Evidence for a Narrower Interpretation: The specification provides an exemplary, complex mathematical formula to represent the cost function: "An=Max({[Acn1∑(rs ians i)+Acn2]+Bcn}+Ccn)+Dcn" (’979 Patent, col. 66:35-40). This explicit formula could be used to argue for a narrower construction that requires a specific type of multi-part mathematical optimization.

  • The Term: "auction" (’086 Patent, Claim 1)

    • Context and Importance: Plaintiff’s infringement theory for the ’086 Patent appears to depend on classifying Defendant’s call-routing or entity-matching process as an "auction." As the Defendant is a credit union, not an auctioneer, the construction of this term will be critical.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification suggests the term can be applied metaphorically to a call center context, where agents might "engage in an auction; that is, agents bid for a caller" based on factors like commission rates or competency (’086 Patent, col. 62:52-63:4). This supports construing "auction" as any competitive selection process.
      • Evidence for a Narrower Interpretation: The background section discusses internet auctions in their conventional sense, referencing concepts like proxy bidding and declining price auctions (’086 Patent, col. 37:50-38:51). This context could support a narrower definition requiring an actual competitive bidding mechanism rather than just an algorithmic selection.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement of the ’086 Patent. The allegation is based on the claim that Defendant distributes "product literature and website materials" that instruct end users on how to use the accused products in a manner that infringes the patent (Compl. ¶21). This inducement is alleged to have occurred at least since the Defendant was served with the complaint (Compl. ¶22).
  • Willful Infringement: The complaint alleges that Defendant gained "actual knowledge" of the ’086 Patent upon service of the complaint and has continued its infringing activities despite this knowledge (Compl. ¶¶20-21). While the word "willful" is not used in the infringement counts, these allegations provide a basis for a claim of post-suit willful infringement. The prayer for relief requests a finding that the case is "exceptional" under 35 U.S.C. § 285 (Compl. p. 6, ¶ H.i.).

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

  1. A central issue will be one of definitional scope: can the term "auction," as claimed in the ’086 Patent, be construed broadly enough to cover a credit union's automated system for routing member service calls, a process not conventionally understood as an auction?
  2. A key evidentiary question will be one of functional specificity: what evidence does the complaint, or will discovery, provide to demonstrate that the accused system performs the specific "multivariate cost function" required by the ’979 Patent, as opposed to a more conventional and technologically distinct routing method?
  3. An underlying procedural question will be one of pleading sufficiency: given the complete absence of factual detail identifying the accused products or describing their operation, the initial phase of the case may focus on whether the complaint’s conclusory allegations meet the plausibility standard for pleading patent infringement.