Patent Armory Inc v. Deli Management Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Deli Management, Inc. (Texas)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-00025, E.D. Tex., 01/19/2024
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant has an established place of business in the District and has committed alleged acts of infringement there.
• Core Dispute: Plaintiff alleges that Defendant infringes five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents address technologies for optimizing resource allocation in communications systems, such as call centers, by using economic and performance-based criteria to match incoming requests with available service agents.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history 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" (Issued 03/19/2019)

The Invention Explained

• Problem Addressed: The patent’s background section describes the inherent challenges in managing call centers, which must balance providing high-quality customer service with the efficient use of resources like call agents (’420 Patent, col. 2:26-34). Traditional Automatic Call Distribution (ACD) systems are often too rigid to handle these competing goals optimally (’420 Patent, col. 2:43-52).
• 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 defining "multivalued scalar data" representing parameters for both parties (’420 Patent, Abstract). The system then performs an "automated optimization" that considers not only the quality of the match but also the "economic surplus" of making that match and the "opportunity cost" of making one agent unavailable for other potential matches (’420 Patent, Abstract; Fig. 1).
• Technical Importance: This approach moves beyond simple first-in, first-out or longest-idle-agent routing by incorporating economic principles into the real-time, low-level logic of a communications switch, allowing for more dynamic and globally optimized resource allocation (’420 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint asserts infringement of at least one claim of the ’420 Patent but does not specify which claims will be asserted (Compl. ¶15). The following analysis focuses on the first independent claim, Claim 1.
• Claim 1 of the ’420 Patent recites the essential elements of a method comprising:
  • Defining multivalued scalar data for a first entity representing "inferential targeting parameters."
  • Defining multivalued scalar data for each of a plurality of second entities representing "characteristic parameters."
  • Performing an automated optimization of a match between the first entity and one of the second entities with respect to an "economic surplus" and an "opportunity cost."

U.S. Patent No. 10,491,748 - "Intelligent communication routing system and method" (Issued 11/26/2019)

The Invention Explained

• Problem Addressed: The patent addresses the same technical problem as the ’420 Patent: the inefficient handling of electronic customer contact in call centers due to the need to balance competing goals of service quality and resource efficiency (’748 Patent, col. 2:25-34).
• The Patented Solution: The invention is a communications routing system that represents both communications sources (e.g., callers) and communications targets (e.g., agents) using predicted characteristics, each associated with an "economic utility" (’748 Patent, Abstract). The system determines an optimal routing by performing a linkage that maximizes the "aggregate utility" between the sources and targets (’748 Patent, Abstract; Fig. 1).
• Technical Importance: By assigning economic utility values to both sides of a communication and optimizing for the aggregate result, the system provides a framework for making routing decisions that are globally beneficial to the system's objectives rather than being based on isolated, sequential pairings (’748 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint asserts infringement of at least one claim of the ’748 Patent but does not specify which claims will be asserted (Compl. ¶21). The following analysis focuses on the first independent claim, Claim 1.
• Claim 1 of the ’748 Patent recites the essential elements of a system comprising a processor and memory for:
  • Representing a plurality of communications sources with predicted characteristics and an economic utility.
  • Representing a plurality of communications targets with predicted characteristics and an economic utility.
  • Determining an optimal routing between the sources and targets by maximizing an "aggregate utility" with respect to their characteristics, represented by "linkages."

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 04/04/2006.
• Technology Synopsis: Based on its title and the context of the complaint, this patent appears to relate to the intelligent routing of telephone calls. The technology likely involves a control system that uses specific criteria to direct calls within a telephony network, such as a call center, to solve problems of resource allocation outlined in the related patents.
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶30).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" practice the technology claimed in the ’979 Patent (Compl. ¶35).

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 09/11/2007.
• Technology Synopsis: Similar to the ’979 Patent, this patent’s title suggests it covers a telephony control system with intelligent call routing capabilities. It likely discloses methods and systems for applying logic or rules to route calls in a manner that improves efficiency or achieves specific business objectives.
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶39).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" practice the technology claimed in the ’253 Patent (Compl. ¶41).

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 09/27/2016.
• Technology Synopsis: The title suggests this patent relates to systems that match different entities using an auction-based mechanism. In the context of the other patents-in-suit, this could involve call agents "bidding" for incoming calls based on commission or other incentives, with the system acting as the auctioneer to determine the optimal match.
• Asserted Claims: The complaint alleges infringement of one or more unspecified claims (Compl. ¶45).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" practice the technology claimed in the ’086 Patent (Compl. ¶50).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific accused products, methods, or services by name (Compl. ¶¶15, 21, 30, 39, 45). Instead, it refers generally to "Exemplary Defendant Products" and states that infringement is detailed in claim charts provided as Exhibits 6, 7, 8, 9, and 10 (Compl. ¶¶17-18, 26-27, 35-36, 41-42, 50-51). These exhibits were not filed with the complaint. No probative visual evidence provided in complaint.
• Functionality and Market Context: The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities.

IV. Analysis of Infringement Allegations

The complaint’s infringement allegations are made entirely by reference to claim chart exhibits that were not provided with the public filing (Compl. ¶¶17-18, 26-27, 35-36, 41-42, 50-51). The complaint alleges that these charts compare "Exemplary" patent claims to "Exemplary Defendant Products" and that the products "satisfy all elements" of those claims (Compl. ¶17). Without the charts, it is not possible to analyze the specific infringement theory for any asserted patent.

• Identified Points of Contention:
  • Evidentiary Questions: A primary question will be what specific products, features, or functionalities Plaintiff intends to accuse. The complaint’s reliance on unprovided exhibits creates an immediate factual ambiguity regarding the basis of the lawsuit.
  • Scope Questions: For the ’420 and ’086 Patents, a potential issue is whether Defendant's systems perform an "auction" as that term is used in the patents. For the ’420 and ’748 Patents, a question will be whether any accused system performs an "optimization" based on abstract concepts like "economic surplus," "opportunity cost," or "aggregate utility," or if its routing is based on more conventional, predefined rules.
  • Technical Questions: A key technical question will be what evidence demonstrates that any accused system calculates and uses "multivalued scalar data" representing "inferential targeting parameters" or "predicted characteristics" to make routing decisions, as opposed to using static or directly provided information.

V. Key Claim Terms for Construction

’420 Patent

• The Term: "economic surplus"

• Context and Importance: This term appears in the optimization step of independent Claim 1 and is central to defining the patented method. The scope of "economic surplus" will be critical for determining whether a defendant's routing algorithm, which may optimize for factors like wait time or agent availability, infringes a claim requiring optimization of this specific economic concept.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent specification does not use the exact phrase "economic surplus," but it describes optimizing a "cost-utility function" that can include both "economic and non-economic factors" (’420 Patent, col. 22:64-65). This language may support a construction that encompasses non-monetary benefits like customer satisfaction.
  • Evidence for a Narrower Interpretation: The specification provides examples of economic parameters such as "sales volume, profit, or the like" (’420 Patent, col. 24:34-36). This may support a narrower construction limited to direct financial or business metrics.

• The Term: "opportunity cost"

• Context and Importance: This term is the second component of the optimization required by Claim 1. Its definition will determine what kind of forward-looking or system-wide calculation an accused method must perform to infringe.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The term itself is not used, but the concept is explained broadly as considering "the availability of agents for other calls, predicted or actual," noting that an agent who is optimal for one call "might be more valuable for another matter" (’420 Patent, col. 24:42-49). This suggests the term covers any consideration of an agent's future value to the system.
  • Evidence for a Narrower Interpretation: The patent presents a formula where "Dcn represents the opportunity cost for allocating agent n to the particular call" (’420 Patent, col. 24:59-61). A defendant may argue this ties the term to the specific mathematical framework disclosed, potentially narrowing its scope to methods that use a similar quantitative calculation.

’748 Patent

• The Term: "aggregate utility"
• Context and Importance: Claim 1 requires determining an optimal routing by "maximizing an aggregate utility." The construction of this term will be pivotal, as it defines the objective of the claimed optimization. Practitioners may focus on this term because it appears to be the central inventive concept distinguishing the system from prior art routing methods.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes a "cost-utility function" that normalizes "disparate factors" into a common metric, including agent costs, training value, and anticipated outcomes like sales volume or customer satisfaction (’748 Patent, col. 24:19-41). This may support a broad construction that includes any combination of performance, cost, or quality metrics.
  • Evidence for a Narrower Interpretation: The abstract frames the invention in terms of "economic utility" for both sources and targets (’748 Patent, Abstract). This may support a narrower construction that requires the "aggregate utility" to be primarily or exclusively based on economic factors.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 Patents (Compl. ¶¶25, 34, 49). The allegations are based on Defendant's alleged continued distribution of "product literature and website materials" after receiving notice of infringement via the complaint, which allegedly instruct or encourage end users to use the accused products in an infringing manner (Compl. ¶¶24, 33, 48).
• Willful Infringement: The complaint does not use the word "willful." However, it alleges "Actual Knowledge of Infringement" for the ’748, ’979, and ’086 Patents, asserting that service of the complaint and its (unprovided) claim charts constitutes such knowledge (Compl. ¶¶23, 32, 47). It further alleges that Defendant continues to infringe despite this knowledge, which could form the basis for a claim of post-suit willful infringement.

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

• A central threshold question will be one of factual sufficiency: can the Plaintiff cure the complaint's failure to identify any accused product or provide any factual basis for infringement beyond conclusory allegations that incorporate unprovided exhibits? The initial phase of the case may focus on whether the complaint meets federal pleading standards.
• A core issue will be one of definitional scope: can abstract, economics-derived claim terms such as "economic surplus," "opportunity cost," and "aggregate utility" be construed to cover the algorithms used in modern communications routing systems, which may optimize for technical performance metrics rather than explicitly calculated economic values?
• A key evidentiary question will be one of technical implementation: assuming the Plaintiff identifies an accused product, what evidence will show that it actually performs a "combinatorial optimization" or "multifactorial optimization" in real-time as required by the claims, rather than applying a set of predefined, sequential routing rules?