Patent Armory Inc v. Prada Spa

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Prada S.p.A. (Italy)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:25-cv-00813, E.D. Tex., 08/19/2025
• Venue Allegations: Venue is alleged to be proper on the basis that the defendant is a foreign corporation.
• Core Dispute: Plaintiff alleges that Defendant infringes two patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents address technologies for optimizing resource allocation, one in the context of telephony call centers and the other using a more generalized auction-based framework.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history involving the patents-in-suit.

Case Timeline

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

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.

The Invention Explained

• Problem Addressed: The patent’s background section describes inefficiencies in traditional call centers that use simple routing logic like first-in, first-out. These systems can lead to mismatches where calls are routed to agents who are either under-skilled, resulting in poor service, or over-skilled, representing an inefficient use of expert resources (’979 Patent, col. 3:25-4:40).
• The Patented Solution: The invention proposes a communications management system that intelligently routes calls by matching the needs of the caller with the specific skills of available agents. The system receives a classification for an incoming call, accesses a database of agent skill scores, and uses a processor to compute an "optimum agent selection" based on a cost-utility function, which can balance short-term efficiency with long-term goals like agent training (’979 Patent, Abstract; Fig. 1). This intelligent decision-making is integrated into the low-level communications server to reduce latency (’979 Patent, col. 59:10-22).
• Technical Importance: This approach represented a shift from static, queue-based call distribution to dynamic, data-driven resource optimization in call centers (’979 Patent, col. 3:1-4).

Key Claims at a Glance

The complaint does not identify specific asserted claims, instead referring to an unprovided exhibit (Compl. ¶14). Independent claim 1 is representative of the system-level invention:

• A communications control system, having a common operating environment, comprising:
• an input for receiving call classification information;
• a data structure representing agent characteristics; and
• a processor for determining an optimum agent based on a multivariate cost function comparing at least three agents, and for controlling call routing based on that determination, with the determining and routing functions performed within the common operating environment.

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.

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’979 Patent, this patent shares an identical background section focused on call center inefficiencies (’086 Patent, col. 2:21-4:50). The claims, however, frame the resource allocation problem more abstractly as one of matching entities in a competitive environment.
• The Patented Solution: The invention claims a method for matching a "first entity" (e.g., a task or caller) with one of a plurality of "second entities" (e.g., agents or service providers). The matching is performed via an "automated optimization" that considers not only the quality of the match but also its "economic surplus" and the "opportunity cost"—the value lost by making a particular entity unavailable for other potential matches (’086 Patent, Abstract). This reframes the skill-based routing problem in the language of auction theory to account for broader system-level economic consequences of each individual match.
• Technical Importance: The claimed method provides a more sophisticated economic framework for resource allocation than simple skill matching by incorporating the concept of opportunity cost into the optimization process.

Key Claims at a Glance

The complaint does not identify specific asserted claims, instead referring to an unprovided exhibit (Compl. ¶23). Independent claim 1 is representative of the method-level invention:

• A method for matching a first subset of entities with a second subset of entities, comprising:
• storing data representing inferential targeting parameters for the first subset and characteristic parameters for the second subset;
• performing an optimization using an automated processor with respect to an economic surplus and an opportunity cost of a mutually exclusive match; and
• outputting a signal based on the optimization.

III. The Accused Instrumentality

The complaint does not identify the accused instrumentality by name or function. It refers generally to "Exemplary Defendant Products" that are detailed in Exhibits 3 and 4, which were not provided with the complaint (Compl. ¶¶12, 18). Consequently, the complaint provides no specific details regarding the functionality or market context of the accused products or services.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint’s infringement allegations are made entirely by incorporating by reference claim charts in Exhibits 3 and 4, which were not provided (Compl. ¶¶15, 24). The complaint offers no narrative description of Defendant's alleged infringement beyond conclusory statements that the "Exemplary Defendant Products practice the technology claimed" and "satisfy all elements" of the asserted claims (Compl. ¶¶14, 23).

• Identified Points of Contention: Due to the absence of a specific infringement theory, potential points of contention must be inferred from the patent and claim language itself.
  • Scope Questions (’979 Patent): A likely dispute will concern the meaning of "optimum agent selection" based on a "multivariate cost function." A central question may be whether the accused system performs a specific, mathematically-defined optimization as described in the patent, or if it uses a more general set of rules that Plaintiff alleges meets this limitation.
  • Technical and Definitional Questions (’086 Patent): For the ’086 Patent, the dispute may center on whether the accused system performs an "auction" that calculates an "economic surplus" and an "opportunity cost." A key question will be whether the system's allocation logic can be technically and legally characterized as performing the specific economic optimization required by the claims, especially given the patent specification's focus on call-center routing rather than formal auction mechanics.

V. Key Claim Terms for Construction

'979 Patent: "multivariate cost function" (from Claim 1)

• The Term: "multivariate cost function"
• Context and Importance: This term is the technological core of the "intelligent" aspect of claim 1. Its construction will determine the type and complexity of the algorithm required to infringe. Practitioners may focus on this term because it distinguishes the claimed invention from simpler, rule-based routing systems.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification discusses optimizing for various goals, including "greatest efficiency, lowest cost, or other optimized variable," which may support a broad reading of what the function can represent (’979 Patent, col. 4:1-3).
  • Evidence for a Narrower Interpretation: The specification provides a specific formula: An=Max({[Acn1∑(rs₁ans₁)+Acn2]+Bcn}+Ccn)+Dcn), which includes terms for agent cost, anticipated value, and opportunity cost (’979 Patent, col. 65:50-66:48). A party could argue that this detailed embodiment narrows the scope of "multivariate cost function" to a formal economic calculation, not just any process considering multiple factors.

'086 Patent: "optimization with respect to at least an economic surplus ... and an opportunity cost" (from Claim 1)

• The Term: "optimization with respect to at least an economic surplus ... and an opportunity cost"
• Context and Importance: This phrase is central to the patent's auction-based framework. The entire infringement case for the ’086 Patent may depend on whether the accused system's functionality can be shown to meet these specific economic criteria.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent does not provide an explicit definition for "economic surplus" or "opportunity cost" in the specification, potentially allowing for a functional interpretation where any system that weighs the benefit of a match against the cost of forgoing other matches could be argued to meet the limitation.
  • Evidence for a Narrower Interpretation: These are established terms of art in economics and auction theory. A party could argue that the absence of any detailed discussion of auction mechanics, surplus calculation, or opportunity cost analysis in the shared specification—which is focused on call-center skills—limits these terms to a narrow, technical meaning that requires an explicit calculation of such values, not just a generalized selection process.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’086 Patent. This allegation is based on Defendant's distribution of "product literature and website materials" that allegedly instruct users on how to use the accused products in an infringing manner (Compl. ¶21). Knowledge and intent are alleged to exist at least from the date the complaint was served (Compl. ¶22).
• Willful Infringement: The complaint does not contain an explicit count for willful infringement. However, for the ’086 Patent, it alleges that Defendant has "actual knowledge of infringement" from the service of the complaint and "continues to make, use, test, sell, offer for sale, market, and/or import" the accused products, which may form the basis for a claim of post-suit willfulness (Compl. ¶¶20-21). No allegations of pre-suit knowledge are made.

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

• Evidentiary Sufficiency: A primary threshold issue will be whether the complaint’s purely conclusory allegations, which rely entirely on unprovided exhibits, can survive a motion to dismiss. A key question is what factual support Plaintiff will ultimately provide to connect the accused products to the specific limitations of the asserted patent claims.
• Definitional Scope: For the ’979 Patent, a core issue will be whether the term "multivariate cost function" requires a formal, formulaic economic optimization or can be construed more broadly to cover any multi-factor agent routing system. For the ’086 Patent, a critical question will be whether its auction-based claim terms, such as "economic surplus" and "opportunity cost", can be read onto the accused system, particularly when the patent's own specification lacks a detailed disclosure of such auction mechanics.