Patent Armory Inc. v. General Electric Company

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: General Electric Company (New York)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:24-cv-10014, S.D.N.Y., 12/30/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the district, has committed acts of patent infringement in the district, and Plaintiff has suffered harm there.
• Core Dispute: Plaintiff alleges that Defendant infringes five patents related to intelligent call routing and auction-based systems for matching entities, such as callers with call-center agents.
• Technical Context: The technology at issue addresses methods for optimizing resource allocation in telecommunications, particularly in call centers, a domain where efficiency directly impacts operational costs and customer satisfaction.
• Key Procedural History: The complaint does not allege any significant procedural history, such as prior litigation between the parties or administrative challenges to the patents-in-suit.

Case Timeline

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

No probative visual evidence provided in complaint.

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 "'420 Patent"). (Compl. ¶9).

The Invention Explained

• Problem Addressed: The patent's background describes inefficiencies in traditional call centers that use simple routing methods like "first-come-first-served" or static, skills-based groupings, which can lead to mismatches between callers and agents (e.g., under-skilled or over-skilled agents) and reduce transactional throughput. (’420 Patent, col. 3:1-4:52).
• The Patented Solution: The invention proposes a method for matching a first entity (e.g., a caller) with a second entity (e.g., a call center agent) by treating the matching process as a type of auction. It defines parameters for both entities and performs an "automated optimization" that considers not only the quality of the 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. 20:5-65). This approach aims to move beyond simple queuing to a more dynamic, globally optimized allocation of resources.
• Technical Importance: This technology represents a shift from static, rule-based call distribution to a dynamic, economically-driven optimization model intended to improve overall call center efficiency. (’420 Patent, col. 18:8-24).

Key Claims at a Glance

• The complaint asserts infringement of at least one independent claim. (Compl. ¶15).
• Independent Claim 1 includes the following essential elements:
  • A method for matching a first entity with at least one second entity selected from a plurality of second entities.
  • 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 the plurality of second entities, representing characteristic parameters.
  • 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.
  • The optimization also considers an opportunity cost of the unavailability of the at least one of the plurality of second entities for matching with an alternate first entity. (’420 Patent, col. 20:5-21).
• The complaint does not explicitly reserve the right to assert dependent claims but refers generally to "one or more 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 "'748 Patent"). (Compl. ¶10).

The Invention Explained

• Problem Addressed: The patent addresses the same general problem space as the ’420 Patent: the limitations and inefficiencies of traditional, non-deterministic call center management systems which struggle to balance customer service quality with resource efficiency. (’748 Patent, col. 1:25-2:67).
• The Patented Solution: The ’748 Patent describes a system architecture for intelligent call routing. It claims a system with a communications router that defines concurrent communication paths and conducts a series of "auctions" to select the optimal path. The auction's valuation function is sensitive to both economic factors (e.g., cost) and non-economic factors (e.g., the optimality of matching user profiles). (’748 Patent, Abstract; col. 39:7-40:4). This solution formalizes the auction concept within a defined system comprising channels and a router.
• Technical Importance: This patented system provides a concrete architecture for implementing auction-based routing, aiming to optimize call distribution based on a holistic view of both economic and non-economic parameters. (’748 Patent, col. 18:8-24).

Key Claims at a Glance

• The complaint asserts infringement of at least one independent claim. (Compl. ¶21).
• Independent Claim 1 includes the following essential elements:
  • A communications matching system comprising a plurality of communications channels and a communications router.
  • The router defines a plurality of concurrent communications paths between sets of entities.
  • The router conducts a series of auctions to select respective communications paths from available competing paths.
  • The auctions determine winners based on a valuation function which is sensitive to both economic factors and non-economic factors.
  • The non-economic factors have an effect on the auction outcome which changes over time. (’748 Patent, col. 39:7-21).
• The complaint refers generally to "one or more claims" of the patent. (Compl. ¶21).

Multi-Patent Capsule: U.S. Patent No. 7,023,979

• Patent Identification: U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing," issued April 4, 2006 (the "'979 Patent"). (Compl. ¶11).
• Technology Synopsis: The ’979 Patent addresses call routing in telephony systems. It describes a system that receives a communication classification, accesses databases of agent skills and skill weights, and uses a processor to compute an optimal agent selection, thereby controlling the call routing directly. (’979 Patent, Abstract).
• Asserted Claims: At least one independent claim is asserted. (Compl. ¶30).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" practice the claimed technology but does not specify features. (Compl. ¶30).

Multi-Patent Capsule: U.S. Patent No. 7,269,253

• Patent Identification: U.S. Patent No. 7,269,253, "Telephony control system with intelligent call routing," issued September 11, 2007 (the "'253 Patent"). (Compl. ¶12).
• Technology Synopsis: The ’253 Patent is directed to a communications system that determines an optimal target for a communication through a combinatorial optimization. The system considers characteristics of the communication and at least three potential targets to determine the routing, with the determining and routing steps performed within a common operating environment. (’253 Patent, Abstract).
• Asserted Claims: At least one independent claim is asserted. (Compl. ¶36).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" practice the claimed technology without identifying specific features. (Compl. ¶36).

Multi-Patent Capsule: U.S. Patent No. 9,456,086

• Patent Identification: U.S. Patent No. 9,456,086, "Method and system for matching entities in an auction," issued September 27, 2016 (the "'086 Patent"). (Compl. ¶13).
• Technology Synopsis: Similar to the ’420 Patent, the ’086 Patent describes a method for matching entities by defining targeting and characteristic parameters for each. It then performs an automated optimization considering the economic surplus of a match and the opportunity cost of making a resource unavailable for other potential matches. (’086 Patent, Abstract).
• Asserted Claims: At least one independent claim is asserted. (Compl. ¶42).
• Accused Features: The complaint accuses the "Exemplary Defendant Products" of infringement without specifying particular functionalities. (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

• The complaint does not identify any specific accused products by name. Instead, it refers to them generically as the "Exemplary Defendant Products." (Compl. ¶15).

Functionality and Market Context

• The complaint does not provide sufficient detail for analysis of the accused instrumentality's functionality. It alleges that infringement details are provided in claim charts attached as exhibits. (Compl. ¶¶17, 26, 32, 38, 47). However, these exhibits were not provided with the complaint, and there is no narrative description of the accused products' operation in the body of the complaint.

IV. Analysis of Infringement Allegations

The complaint's infringement allegations are made by incorporating by reference external claim chart exhibits (Exhibits 6-10), which were not provided with the complaint. (Compl. ¶¶17-18, 26-27, 32-33, 38-39, 47-48). The complaint does not contain a narrative theory of infringement explaining how the accused products meet the specific limitations of the asserted claims.

• Identified Points of Contention:
  • Scope Questions: Based on the asserted claims, a central dispute may concern the interpretation of economic concepts within a technical system. A question for the court could be whether the accused products' routing logic performs an "automated optimization" that accounts for "economic surplus" and "opportunity cost" as those terms are understood in the context of the ’420 and ’086 Patents, or if it uses a simpler, non-economic heuristic.
  • Technical Questions: A key factual question will be what evidence demonstrates that the accused products' functionality maps to the specific elements of the asserted claims. For example, regarding the ’748 Patent, it will be necessary to determine if the accused system conducts a series of "auctions" based on a "valuation function" sensitive to both economic and non-economic factors, or if it employs a different technical method for selecting communication paths.

V. Key Claim Terms for Construction

• The Term: "automated optimization with respect to an economic surplus" (’420 Patent, Claim 1)

• Context and Importance: This term is the core of the inventive concept. Its construction will be critical because it requires mapping a specific economic principle ("economic surplus") onto the technical operation of a software system. Practitioners may focus on this term because the defendant may argue its system uses a technical, rule-based algorithm that does not calculate or consider an "economic surplus."

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification does not define "economic surplus" with a rigid mathematical formula, which could support an argument that any optimization that considers overall value or utility beyond simple cost meets the limitation. The detailed description refers to business goals like "sales volume, profit, or the like" and "customer satisfaction" as factors in a cost function. (’420 Patent, col. 24:30-40).
  • Evidence for a Narrower Interpretation: The use of specific economic terminology ("surplus," "opportunity cost") may support a narrower construction requiring a more formal calculation consistent with economic theory. The patent's abstract explicitly links the optimization to both "economic surplus" and "opportunity cost," suggesting they are distinct and necessary components of the claimed optimization. (’420 Patent, Abstract).

• The Term: "conducts series of auctions" (’748 Patent, Claim 1)

• Context and Importance: This term defines the primary mechanism of the claimed communications router. The dispute will likely center on whether the accused system's process for selecting a communication path qualifies as an "auction." The defendant may argue its system uses a selection or sorting algorithm, not an auction.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent uses the term broadly, stating the router "conducts series of auctions an auction to determine the select respective communications path paths." (’748 Patent, Fig. 6). This could be interpreted to cover any competitive selection process, not just a formal bidding procedure.
  • Evidence for a Narrower Interpretation: The specification describes the auction as being "sensitive to both economic factors and non-economic factors," and the economic factors may "compensate for a suboptimality of a matching of profiles." (’748 Patent, Fig. 7). This language could support a narrower reading that requires a process involving compensatory bids or valuation adjustments, rather than a simple ranking of options.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 Patents. The allegations state that the Defendant distributes "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes." (Compl. ¶¶24, 45).
• Willful Infringement: The complaint alleges "Actual Knowledge of Infringement" for the ’748 and ’086 Patents based on "service of this Complaint, in conjunction with the attached claim charts." (Compl. ¶¶23, 44). This grounds the allegation in post-suit knowledge.

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

1. A core issue will be one of definitional scope: can abstract economic terms such as "economic surplus" and "opportunity cost," as claimed in the patents, be construed to read on the specific, concrete software logic and routing algorithms implemented in the accused products?
2. A key evidentiary question will be one of technical operation: what factual evidence will emerge from discovery to show that the accused systems perform the specific "automated optimization" or conduct the "series of auctions" required by the claims, as opposed to employing more conventional, non-infringing heuristic or rule-based methods?
3. An initial procedural question will be one of pleading sufficiency: does the complaint's reliance on incorporating non-provided exhibits, without a narrative explanation of infringement, provide sufficient factual allegations to state a plausible claim for relief against a motion to dismiss?