Patent Armory Inc v. Barclays Capital Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Barclays Capital Inc. (Connecticut)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 4:24-cv-01282, S.D. Tex., 04/08/2024
• Venue Allegations: Venue is alleged to be proper because Defendant maintains an established place of business in the Southern District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s financial and communication systems infringe five patents related to intelligent call routing and auction-based methods for matching entities.
• Technical Context: The patents relate to optimizing communications in environments like call centers by using economic principles and multi-factor analysis to route incoming requests (e.g., calls) to the best-suited available resource (e.g., agents), a technology critical for efficiency in large-scale service operations.
• Key Procedural History: The asserted patents claim priority back to a provisional application filed in 2003, suggesting a long history of development and prosecution for this technology portfolio. U.S. Patent No. 10,237,420 is subject to a terminal disclaimer, which may limit its enforceable term to that of an earlier-expiring patent in the family.

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

The Invention Explained

• Problem Addressed: The patent's background describes the inefficiency of traditional Automatic Call Distribution (ACD) systems in call centers, which often use simple "first-come-first-served" or "longest-idle-agent" logic for routing calls (US10237420B1, col. 2:44-52; col. 4:10-14). These methods fail to optimally match a caller's specific needs with an agent's particular skills, leading to problems like connecting callers to under-skilled or over-skilled agents (US10237420B1, col. 4:35-50).
• 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 performing an "automated optimization" that considers not just skill matching but also economic factors (US10237420B1, Abstract). This optimization is conducted with respect to the "economic surplus" of a potential match and the "opportunity cost" of making an agent unavailable for other potential matches, effectively creating an auction-like mechanism for routing communications (US10237420B1, Abstract; Fig. 7).
• Technical Importance: This approach seeks to move beyond simple queuing logic to a more dynamic, value-based system for allocating communication resources in real time, aiming to improve overall call center efficiency and outcomes (US10237420B1, col. 21:1-8).

Key Claims at a Glance

• The complaint asserts infringement of one or more unspecified claims of the ’420 Patent (Compl. ¶15). Claim 1 is the first independent method claim.
• Claim 1 Elements:
  • A method for matching a first entity with at least one second entity selected from a plurality of second entities, comprising:
  • defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity and a plurality of multivalued scalar data of each of the plurality of second entities, representing respective characteristic parameters for each respective second entity; and
  • 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, and an opportunity cost of the unavailability of the at least one of the plurality of second entities 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

The Invention Explained

• Problem Addressed: As with the related ’420 patent, this patent addresses the challenge of efficiently routing communications in a complex environment where sources (e.g., callers) and targets (e.g., agents) have varying characteristics and value (US10491748B1, col. 1:20-24). The problem is to move beyond static routing rules to a dynamic system that maximizes overall value.
• The Patented Solution: The invention provides a system for determining an "optimal routing" between communication sources and targets by "maximizing an aggregate utility" (US10491748B1, Abstract). This involves representing the predicted characteristics of both sources and targets, each having an "economic utility," and then calculating the best routing scheme based on these utility values (US10491748B1, Abstract). Figure 2 illustrates the consideration of factors like "expected incremental utility of agent" (416) and "expected incremental training utility" (418) in the optimization process.
• Technical Importance: The technology provides a framework for intelligent, utility-driven resource allocation in communications, allowing for factors like agent training or long-term customer value to be incorporated into real-time routing decisions (US10491748B1, col. 23:29-41).

Key Claims at a Glance

• The complaint asserts infringement of one or more unspecified claims of the ’748 Patent (Compl. ¶21). Claim 1 is the first independent system claim.
• Claim 1 Elements:
  • A communications routing system, comprising a processor and a memory, the memory storing instructions, which when executed by the processor, perform a method for:
  • representing a plurality of predicted characteristics of a plurality of communications sources, each having an economic utility;
  • representing a plurality of predicted characteristics of a plurality of communications targets each having an economic utility; and
  • determining an optimal routing between the plurality of communications sources and the plurality of communications targets, by maximizing an aggregate utility with respect to the respective predicted characteristics of communications source and communications destination represented by linkages.
• 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

• Technology Synopsis: This patent describes a telephony control system that provides for intelligent call routing (Compl. ¶11). The system appears to involve receiving a communication classification, accessing a database of agent skills, and using a processor to compute an optimal agent selection based on the classification and skills (US7023979B1, Abstract).
• Asserted Claims: One or more unspecified claims (Compl. ¶30).
• Accused Features: Unspecified features of "Exemplary Defendant Products" are accused of infringement, with details purportedly provided in an unattached exhibit to the complaint (Compl. ¶30, ¶32).

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

• Technology Synopsis: This patent, similar to the ’979 patent, concerns a telephony control system that performs intelligent call routing (Compl. ¶12). The invention involves a combinatorial optimization of communications sources and at least three potential targets to determine an optimal routing based on their respective characteristics (US7269253B1, Abstract).
• Asserted Claims: One or more unspecified claims (Compl. ¶36).
• Accused Features: Unspecified features of "Exemplary Defendant Products" are accused of infringement, with details purportedly provided in an unattached exhibit to the complaint (Compl. ¶36, ¶38).

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

• Technology Synopsis: This patent, a direct ancestor of the ’420 patent, describes a method for matching entities by defining their parameters and performing an automated optimization based on economic surplus and opportunity cost (Compl. ¶13). It frames the matching process as a form of auction to achieve an optimal pairing (US9456086B1, Abstract).
• Asserted Claims: One or more unspecified claims (Compl. ¶42).
• Accused Features: Unspecified features of "Exemplary Defendant Products" are accused of infringement, with details purportedly provided in an unattached exhibit to the complaint (Compl. ¶42, ¶47).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused products, methods, or services by name in the body of the pleading (Compl. ¶¶1-50). It refers generally to "Exemplary Defendant Products" that are identified in claim chart exhibits (Exhibits 6-10) which were not attached to the publicly filed complaint (Compl. ¶15, ¶21, ¶30, ¶36, ¶42).

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 alleges direct infringement of all five patents-in-suit. For each asserted patent, the complaint states that infringement is detailed in a corresponding claim chart exhibit (Exhibits 6-10) (Compl. ¶17, ¶26, ¶32, ¶38, ¶47). As these exhibits were not provided with the filed complaint, the infringement allegations are summarized below in narrative form based on the complaint's text.

No probative visual evidence provided in complaint.

• ’420 Patent Infringement Allegations: The complaint alleges that Defendant directly infringes one or more claims of the ’420 patent by "making, using, offering to sell, selling and/or importing" the "Exemplary Defendant Products" (Compl. ¶15). It further alleges that these products "practice the technology claimed by the '420 Patent" and "satisfy all elements" of the asserted claims (Compl. ¶17). The complaint does not specify which products are accused or how they meet the claim limitations of performing an automated optimization based on economic surplus and opportunity cost.
• ’748 Patent Infringement Allegations: The complaint alleges that Defendant directly infringes one or more claims of the ’748 patent through its "Exemplary Defendant Products" (Compl. ¶21). The pleading asserts that these products "practice the technology claimed by the '748 Patent" and "satisfy all elements" of the asserted claims (Compl. ¶26). No specific facts are provided in the complaint to support the allegation that the accused products determine an optimal routing by maximizing an aggregate utility as claimed.

Identified Points of Contention

• Pleading Sufficiency Question: The primary point of contention will be procedural: do the complaint's conclusory allegations, which rely entirely on unattached exhibits to provide factual support for infringement, satisfy the plausibility pleading standards required by Federal Rule of Civil Procedure 8 and the Twombly/Iqbal line of cases?
• Scope Questions: Assuming the case proceeds, a central issue will be one of definitional scope. For the ’420 and ’086 patents, the question may be whether Defendant's systems perform an "automated optimization" that calculates "economic surplus" and "opportunity cost" as those terms are understood in the context of the patents, or if they perform a more generic form of rules-based routing. For the ’748, ’979, and ’253 patents, a similar question arises regarding whether Defendant's systems "maximize an aggregate utility" or perform "intelligent call routing" in the specific manner claimed.
• Technical Questions: A key evidentiary question will be whether the accused systems actually operate as alleged. What evidence exists that Defendant's systems define "multivalued scalar data" for entities and then perform the specific multi-factor optimizations required by the claims, rather than using a different technical approach to achieve a similar commercial outcome?

V. Key Claim Terms for Construction

The complaint does not provide sufficient detail for analysis of specific claim terms that may be in dispute. However, based on the technology of the lead patents, the following terms from their independent claims may become central to the case.

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

• Context and Importance: This phrase contains the core technical and economic concepts of the invention. Practitioners may focus on this term because the entire infringement case for the auction-based patents likely depends on whether the accused systems perform an analysis that can be properly characterized by these specific economic principles, as opposed to a more general algorithm.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the optimization in functional terms, stating that the goal is to "optimally schedule agents for greatest efficiency, lowest cost, or other optimized variable" (US10237420B1, col. 4:8-10). This could support a construction that covers any algorithm achieving an economically efficient outcome.
  • Evidence for a Narrower Interpretation: The specification provides detailed formulae for calculating cost-utility functions, including terms for agent cost, anticipated change in agent value, transaction value, and opportunity cost (US10237420B1, col. 24:50-65). This may support a narrower construction requiring an optimization that explicitly calculates and balances these specific factors.

The Term: "maximizing an aggregate utility" (’748 Patent, Claim 1)

• Context and Importance: This term is the functional heart of the ’748 patent's claims. The dispute will likely focus on whether the accused routing systems are merely efficient or if they are specifically designed to calculate and "maximize" a quantitative "utility" value across the entire system.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The abstract broadly describes "maximizing an aggregate utility with respect to the respective predicted characteristics," which could be argued to cover any system that routes communications to achieve the best overall system-wide result based on predictions (US10491748B1, Abstract).
  • Evidence for a Narrower Interpretation: The detailed description discusses specific components of utility, such as "expected incremental utility of agent" and "expected incremental training utility" (US10491748B1, Fig. 2). This may support a construction requiring the explicit calculation and aggregation of these or similar quantitative utility metrics.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748 and ’086 patents. The basis for inducement is the allegation that Defendant distributes "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes" the patents (Compl. ¶24, ¶45).
• Willful Infringement: The complaint alleges that Defendant has "actual knowledge" of the ’748 and ’086 patents at least as of the service of the complaint and the corresponding (unattached) claim charts (Compl. ¶23, ¶44). This allegation appears intended to lay the groundwork for post-suit willful infringement or a claim for enhanced damages, as no pre-suit knowledge is alleged.

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

1. A threshold issue will be one of pleading sufficiency: Can a complaint that makes only conclusory allegations of infringement, while relegating all underlying factual support to unattached exhibits, survive a motion to dismiss for failure to state a plausible claim?
2. A central question will be one of definitional scope: Will the court construe terms rooted in economic theory, such as "economic surplus," "opportunity cost," and "aggregate utility," broadly to cover general-purpose efficient routing systems, or narrowly to require the performance of specific, quantitative economic calculations as described in the patent specifications?
3. A key evidentiary question will be one of technical operation: Assuming the case proceeds, what evidence will demonstrate that the accused systems actually perform the multi-factor, auction-like optimizations required by the claims, as opposed to employing alternative, non-infringing methods to manage communications traffic?