Patent Armory Inc v. Lubys Restaurant Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Luby's Restaurant Corporation (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-00166, E.D. Tex., 03/09/2024
• Venue Allegations: Venue is alleged to be proper because the Defendant maintains an established place of business within the Eastern District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services infringe five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents relate to sophisticated call center management technologies that use economic principles and multi-factor analysis to route communications and match callers with agents.
• 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

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

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

• Patent Identification: U.S. Patent No. 10,237,420, titled "Method and system for matching entities in an auction," issued March 19, 2019 (Compl. ¶9; ’420 Patent, cover).
• The Invention Explained:
  • Problem Addressed: The patent’s background section describes the inherent inefficiencies of traditional call center management, where simple rules like "first-come-first-served" fail to account for agent skills, call complexity, or economic considerations, leading to suboptimal resource allocation (’420 Patent, col. 2:26-50).
  • The Patented Solution: The invention proposes treating the matching of a caller (a "first entity") with a call center agent (a "second entity") as an auction. The system defines parameters for both the caller and the available agents using "multivalued scalar data" and then performs an "automated optimization" to find the best match. This optimization considers not just skill correspondence but also the "economic surplus" of a successful match and the "opportunity cost" of making an agent unavailable for other potential calls (’420 Patent, Abstract; col. 3:1-col. 4:34).
  • Technical Importance: This approach reframes call routing from a simple queuing task into a dynamic, multi-variable economic optimization problem, intended to enhance efficiency in complex call centers (’420 Patent, col. 2:26-34).
• Key Claims at a Glance:
  • The complaint alleges infringement of one or more claims, including "exemplary method claims," but does not specify them (Compl. ¶15). Independent claim 1 is representative.
  • Essential elements of Independent Claim 1 include:
    • Defining a plurality of multivalued scalar data representing inferential targeting parameters for a first entity.
    • Defining a plurality of multivalued scalar data for each of a plurality of second entities, representing their respective characteristic parameters.
    • 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 states infringement is literal or by the doctrine of equivalents and notes that numerous other devices may infringe (Compl. ¶15).

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

• Patent Identification: U.S. Patent No. 10,491,748, titled "Intelligent communication routing system and method," issued November 26, 2019 (Compl. ¶10; ’748 Patent, cover).
• The Invention Explained:
  • Problem Addressed: The patent addresses the limitations of conventional call distribution systems that do not intelligently factor in the specific needs of a caller or the unique skills of an agent, leading to inefficient pairings (’748 Patent, col. 2:25-47).
  • The Patented Solution: The invention describes a routing system that models both "communications sources" (e.g., callers) and "communications targets" (e.g., agents) using "predicted characteristics," each with an associated "economic utility." The system then determines an "optimal routing" by maximizing an "aggregate utility" across all possible pairings, taking these characteristics into account (’748 Patent, Abstract; col. 5:1-19).
  • Technical Importance: The technology aims to improve call center throughput by making routing decisions based on a holistic calculation of overall economic utility, rather than on simple, sequential queuing rules (’748 Patent, col. 4:1-9).
• Key Claims at a Glance:
  • The complaint asserts infringement of one or more unspecified claims (Compl. ¶21). Independent claim 1 is representative.
  • Essential elements of Independent Claim 1 include:
    • Representing a plurality of predicted characteristics of communications sources, each having an economic utility.
    • Representing a plurality of predicted characteristics of communications targets, each having an economic utility.
    • Determining an optimal routing between the sources and targets by maximizing an aggregate utility based on their respective predicted characteristics.
  • The complaint alleges direct and induced infringement, literally or by the doctrine of equivalents (Compl. ¶21, 25).

No probative visual evidence provided in complaint.

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

• Patent Identification: U.S. Patent No. 7,023,979, titled "Telephony control system with intelligent call routing," issued April 4, 2006 (Compl. ¶11).
• Technology Synopsis: This patent describes a foundational intelligent routing system. It addresses inefficient call handling by disclosing a method that receives a "communications classification" for an incoming call, accesses a database of agent "skill scores," and uses a processor to compute an "optimum agent selection" to control the call's routing (’979 Patent, Abstract).
• Asserted Claims: The complaint asserts one or more claims; independent claim 1 is representative (Compl. ¶30).
• Accused Features: The complaint alleges infringement by "Defendant products identified in the charts incorporated into this Count" but does not describe the features or provide the charts (Compl. ¶30).

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

• Patent Identification: U.S. Patent No. 7,269,253, titled "Telephony control system with intelligent call routing," issued September 11, 2007 (Compl. ¶12).
• Technology Synopsis: This patent builds on intelligent routing concepts by introducing a "combinatorial optimization." The system determines an optimal target for a communication by evaluating characteristics of both the communication itself and a plurality of potential targets, allowing for a more complex, multi-factor matching decision than a simple one-to-one comparison (’253 Patent, Abstract).
• Asserted Claims: The complaint asserts one or more claims; independent claim 1 is representative (Compl. ¶36).
• Accused Features: The complaint alleges infringement by unspecified "Defendant products identified in the charts" but does not describe the features or provide the charts (Compl. ¶36).

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

• Patent Identification: U.S. Patent No. 9,456,086, titled "Method and system for matching entities in an auction," issued September 27, 2016 (Compl. ¶13).
• Technology Synopsis: This patent, related to the ’420 Patent, describes a system for matching entities by performing a "multifactorial optimization." This optimization is based on the "classification factors" of incoming communications and the "characteristics" of potential targets. The system explicitly uses a cost function to optimize a "cost-benefit outcome" of the routing decision (’086 Patent, Abstract; Fig. 4).
• Asserted Claims: The complaint asserts one or more claims; independent claim 1 is representative (Compl. ¶42).
• Accused Features: The complaint alleges infringement by unspecified "Defendant products" detailed in missing charts and also alleges inducement via product literature (Compl. ¶42, 45).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific accused products, methods, or services by name (Compl. ¶15, 17). It refers generally to "Exemplary Defendant Products" that are purportedly identified in claim chart exhibits, but these exhibits were not filed with the complaint (Compl. ¶17, 26, 32, 38, 47).
• Functionality and Market Context: The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities. It makes only conclusory allegations that the unspecified products "practice the technology claimed" by the patents-in-suit (Compl. ¶17).

IV. Analysis of Infringement Allegations

The complaint does not provide a narrative infringement theory or claim charts for any of the asserted patents. Instead, for each count, it alleges that unspecified "Exemplary Defendant Products" satisfy all elements of the asserted claims and incorporates by reference corresponding claim chart exhibits (Exhibits 6, 7, 8, 9, and 10), which were not filed with the complaint (Compl. ¶17-18, 26-27, 32-33, 38-39, 47-48).

• Identified Points of Contention:
  • Factual Questions: A primary issue will be evidentiary. As the complaint lacks any factual allegations describing how the accused products operate, a central question is what evidence Plaintiff will produce to show that Defendant’s systems perform the specific, multi-part optimization and economic calculations required by the patent claims.
  • Scope Questions: The patents-in-suit are grounded in the technical field of call center management and use terms like "auction," "economic surplus," and "opportunity cost" (’420 Patent, Abstract). A potential point of contention may be whether these terms, as defined and used within the patents, can be construed to read on the systems and operations of a restaurant corporation, the nature of which is not described in the complaint.

V. Key Claim Terms for Construction

The complaint’s lack of a specific infringement theory makes identifying key terms speculative. However, based on the technology, certain terms are foundational to the scope of the patents.

• The Term: "automated optimization" (’420 Patent, Claim 1)

  • Context and Importance: This term defines the core computing process of the invention. Its construction will be critical to determining whether a simple rules-based system could infringe, or if the claim requires a more complex, algorithm-driven process that considers multiple competing variables.
  • Intrinsic Evidence for a Broader Interpretation: The specification describes the goal as balancing "competing goals" such as service quality and resource efficiency, which might support a broader reading that encompasses any automated process for balancing trade-offs (’420 Patent, col. 2:30-34).
  • Intrinsic Evidence for a Narrower Interpretation: The specification describes detailed cost-utility functions that include factors like training costs, anticipated outcomes, and opportunity costs, suggesting the "optimization" is not a simple choice but a complex calculation (’420 Patent, col. 23:41-24:67).

• The Term: "economic surplus" (’420 Patent, Claim 1)

  • Context and Importance: This term anchors the "optimization" in economic principles. The dispute may turn on whether the accused system must perform a formal economic calculation or if a more general value assessment suffices. Practitioners may focus on this term because it appears to require a specific type of quantitative analysis not typically associated with standard business software.
  • Intrinsic Evidence for a Broader Interpretation: The patent background discusses making "efficient use of call center resources," which could be argued to represent a general form of economic surplus not requiring a specific formula (’420 Patent, col. 2:36-39).
  • Intrinsic Evidence for a Narrower Interpretation: The abstract explicitly requires the optimization to be performed "with respect to an economic surplus...and an opportunity cost," suggesting these are distinct, required inputs to the claimed process, not just generalized goals (’420 Patent, Abstract).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748 and ’086 Patents. The allegations are based on Defendant distributing "product literature and website materials inducing end users and others to use its products" in an infringing manner (Compl. ¶24, 45). Knowledge and intent are alleged to exist at least from the date of service of the complaint (Compl. ¶25, 46).
• Willful Infringement: Willfulness is not pleaded as a separate count. However, for the ’748 and ’086 Patents, the complaint alleges "Actual Knowledge of Infringement" based on the "service of this Complaint, in conjunction with the attached claim charts" (Compl. ¶23, 44). These allegations may form the basis for a future claim of post-filing willful infringement.

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

• A threshold procedural question will be one of pleading sufficiency: does a complaint that contains no factual allegations about the accused product’s operation, instead relying entirely on un-filed exhibits, meet the plausibility standard required to survive a motion to dismiss under Federal Rules of Civil Procedure 8 and 12(b)(6)?
• A central substantive issue will be one of technical and definitional scope: can patent claims rooted in the complex, data-driven optimization of call centers—using terms like "auction" and "economic surplus"—be construed to cover the unspecified internal systems of a restaurant corporation? The answer will likely depend heavily on claim construction.
• A key evidentiary question will be one of proof of operation: assuming the case proceeds, what evidence can Plaintiff muster to demonstrate that Defendant’s systems actually perform the specific multi-factor, cost-benefit optimizations recited in the claims, given the absence of any such description in the complaint?