Patent Armory Inc v. Dick's Sporting Goods Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Dick's Sporting Goods, Inc. (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-01061, E.D. Tex., 12/18/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business within the Eastern District of Texas.
• 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 patents address technologies for optimizing the allocation of communication resources in environments like call centers, moving beyond simple queuing to complex, factor-based decision-making.
• 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 - "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. (Compl. ¶9; ’420 Patent, cover).

The Invention Explained

• Problem Addressed: The patent’s background describes inefficiencies in traditional call center management, such as routing calls based on simple first-in-first-out queues or longest-idle-agent rules, which fail to account for the complex, overlapping skill sets of agents and the specific needs of callers. (Compl. ¶9; ’420 Patent, col. 3:35-4:34).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., an incoming call) with a "second entity" (e.g., a call center agent) as an auction. The system performs an "automated optimization" to find the best match, considering not only the fit between the entities but also the "economic surplus" of a potential match and the "opportunity cost" of making a particular agent unavailable for other potential calls. (’420 Patent, Abstract; col. 18:9-24).
• Technical Importance: This approach recasts communication routing from a simple queuing problem into a dynamic economic optimization, potentially allowing for more efficient resource allocation in complex, multi-skilled environments. (’420 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint alleges infringement of "one or more claims" and references "exemplary method claims" but does not identify specific claims. (Compl. ¶15). Independent claim 1 is representative.
• Independent Claim 1 of the ’420 Patent includes the following essential elements:
  • 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 their "characteristic parameters."
  • Performing an automated optimization of a match between the first entity and a second entity with respect to an "economic surplus."
  • The optimization also considers an "opportunity cost" related to the unavailability of the selected second entity for matching with an alternate first entity.
• 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"

• Patent Identification: U.S. Patent No. 10,491,748, "Intelligent communication routing system and method," issued November 26, 2019. (Compl. ¶10; ’748 Patent, cover).

The Invention Explained

• Problem Addressed: The patent addresses the general problem of balancing competing goals in a call center: providing high-quality service to customers while making efficient use of call center resources. (Compl. ¶10; ’748 Patent, col. 1:25-34).
• The Patented Solution: The invention is a routing system that determines an optimal path between communication "sources" and "targets" by "maximizing an aggregate utility." This is achieved by representing both sources and targets using "predicted characteristics," each associated with an "economic utility," and then calculating the best pairing based on these factors. (’748 Patent, Abstract; Fig. 1).
• Technical Importance: The technology provides a framework for routing communications based on a predictive, utility-maximizing model, allowing for more dynamic resource allocation than static, rule-based systems. (’748 Patent, col. 2:48-60).

Key Claims at a Glance

• The complaint alleges infringement of "one or more claims" but does not identify specific claims. (Compl. ¶21). Independent claim 1 is representative.
• Independent Claim 1 of the ’748 Patent includes the following essential elements:
  • Representing predicted characteristics of communication sources, each having an "economic utility."
  • Representing predicted characteristics of communication targets, each having an "economic utility."
  • Determining an optimal routing between sources and targets by "maximizing an aggregate utility" with respect to the predicted characteristics.
• 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”

• Patent Identification: U.S. Patent No. 7,023,979, “Telephony control system with intelligent call routing,” issued April 4, 2006. (Compl. ¶11).
• Technology Synopsis: The patent describes a communications management system for a call center. The system computes an optimal agent selection based on a received communication classification and a database of agent skills, and then directly controls the routing of the call. (’979 Patent, Abstract).
• Asserted Claims: The complaint alleges infringement of "one or more claims" without further specification. (Compl. ¶30).
• Accused Features: The complaint accuses "Defendant Products" generally but does not identify specific products or describe the functionality alleged to infringe this patent. (Compl. ¶30).

U.S. Patent No. 7,269,253 - “Telephony control system with intelligent call routing”

• Patent Identification: U.S. Patent No. 7,269,253, “Telephony control system with intelligent call routing,” issued September 11, 2007. (Compl. ¶12).
• Technology Synopsis: The patent describes a communications control system that performs a combinatorial optimization to determine an optimal target for a communication. The system evaluates characteristics of the communication and potential targets to make a routing decision. (’253 Patent, Abstract).
• Asserted Claims: The complaint alleges infringement of "one or more claims" without further specification. (Compl. ¶36).
• Accused Features: The complaint accuses "Defendant Products" generally but does not identify specific products or describe the functionality alleged to infringe this patent. (Compl. ¶36).

U.S. Patent No. 9,456,086 - “Method and system for matching entities in an auction”

• Patent Identification: U.S. Patent No. 9,456,086, “Method and system for matching entities in an auction,” issued September 27, 2016. (Compl. ¶13).
• Technology Synopsis: The technology is substantially similar to that of the ’420 Patent, describing a method for matching a first entity with a second entity selected from a plurality of options. The matching is performed via an automated optimization that considers the economic surplus of the match and the opportunity cost of making the selected entity unavailable for other matches. (’086 Patent, Abstract).
• Asserted Claims: The complaint alleges infringement of "one or more claims" without further specification. (Compl. ¶42).
• Accused Features: The complaint accuses "Defendant Products" generally but does not identify specific products or describe the functionality alleged to infringe this patent. (Compl. ¶42).

III. The Accused Instrumentality

• Product Identification: The complaint identifies the accused instrumentalities as the "Exemplary Defendant Products." (Compl. ¶15). It does not name any specific product, method, or service.
• Functionality and Market Context: The complaint does not describe the technical functionality or operation of the accused products. It alleges that Defendant makes, uses, sells, offers to sell, and/or imports these products, and that Defendant’s employees internally test and use them. (Compl. ¶¶15, 16). The complaint does not provide sufficient detail for analysis of the products' functionality or market context.
  No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges infringement by incorporating by reference claim charts contained in Exhibits 6 and 7, which were not filed with the complaint. (Compl. ¶¶18, 27). The complaint provides no narrative description of how the accused products allegedly meet the limitations of the asserted patents. Therefore, a claim chart summary cannot be constructed.

• Identified Points of Contention: Lacking specific infringement allegations, any analysis must be framed at a high level based on the patent claims.
  • Scope Questions: The infringement analysis for the ’420 and ’086 Patents will raise the question of whether the accused systems perform a true "auction" that optimizes for "economic surplus" and "opportunity cost," as those terms are defined in the patents. For the ’748, ’979, and ’253 Patents, a central question will be whether the accused systems perform the specific "intelligent call routing" required, or a more conventional form of routing.
  • Technical Questions: A primary technical question will be what evidence exists that the accused products perform the specific multi-factorial optimizations required by the claims. The complaint does not provide any facts regarding the operational logic or algorithms of the accused products that would satisfy claim elements such as "performing an automated optimization" (’420 Patent) or "maximizing an aggregate utility" (’748 Patent).

V. Key Claim Terms for Construction

• For the ’420 Patent:
  • The Term: "economic surplus"
  • Context and Importance: This term is central to the optimization required by claim 1. Its construction will determine whether the claim requires a formal, quantitative economic calculation or if it can be read more broadly to cover general cost-benefit balancing. Practitioners may focus on this term because it appears to be a defining limitation of the claimed optimization process.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The background section discusses balancing competing goals, such as providing high-quality service while making "efficient use of call center resources," which could support a broader, less-quantitative interpretation. (’420 Patent, col. 1:29-34).
    • Evidence for a Narrower Interpretation: The detailed description provides specific, multi-part cost-utility functions and references concrete economic parameters like "sales volume, profit, or the like," suggesting "economic surplus" requires a more rigorous, quantifiable analysis. (’420 Patent, col. 24:35-40).
• For the ’748 Patent:
  • The Term: "maximizing an aggregate utility"
  • Context and Importance: This phrase defines the claimed routing determination. The case may turn on whether "maximizing" requires finding a single mathematically optimal solution or if it can cover heuristic methods that seek a "better" but not necessarily "best" outcome, and what factors constitute the "aggregate utility."
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent abstract describes the determination of an "optimal routing" in general terms, which might support a broader interpretation of the maximization step. (’748 Patent, Abstract).
    • Evidence for a Narrower Interpretation: The patent’s flowcharts reference distinct steps to "optimize cost-utility function" and consider specific inputs like "expected incremental cost of agent" and "expected incremental utility of agent," which may support a narrower construction requiring a specific, multi-factor calculation. (’748 Patent, Fig. 1, 308, 312; Fig. 2, 415-418).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of 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." (Compl. ¶¶24, 25, 45, 46).
• Willful Infringement: The complaint does not contain a formal count for willful infringement. However, for the ’748 and ’086 Patents, it alleges that service of the complaint constitutes "actual knowledge" and that Defendant has continued its allegedly infringing activities despite this knowledge, which could form the basis for a post-suit willfulness claim. (Compl. ¶¶23-24, 44-45).

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

• A central procedural issue will be one of factual sufficiency: can the complaint survive a motion to dismiss when its infringement allegations rely entirely on external exhibits that were not provided, leaving the pleading devoid of specific facts explaining how the accused products operate or infringe?
• A core issue will be one of definitional scope: can abstract, functional claim terms such as "economic surplus" and "maximizing an aggregate utility," which are rooted in complex optimization and economic theory, be construed to cover the functionality of the accused products, whose specific operations are not described in the complaint?
• A key evidentiary question will be one of technical operation: what factual evidence can Plaintiff produce to demonstrate that the accused systems perform the specific, multi-part logical functions required by the patent claims, as opposed to more conventional routing or resource allocation methods that may fall outside their scope?