Patent Armory Inc v. Booking Holdings Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Booking Holdings Inc. (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00540, W.D. Tex., 07/27/2023
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business in Austin, Texas, within the Western District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s online travel and booking platforms infringe five patents related to intelligent communication routing and auction-based entity matching.
• Technical Context: The technology at issue concerns systems for optimizing connections between entities, primarily described in the context of routing telephone calls to the most suitable agents in a call center based on skills and economic factors.
• Key Procedural History: The asserted U.S. Patent No. 10,237,420 is a continuation of the application that matured into the asserted U.S. Patent No. 9,456,086. The complaint does not mention any prior litigation, licensing history, or post-grant proceedings involving 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.

The Invention Explained

• Problem Addressed: The patent background describes the inefficiency of traditional call center systems that use simple rules, such as first-come-first-served, for routing calls (Compl. ¶ 8; ’420 Patent, col. 3:1-12). These systems fail to account for the varying skills of agents, leading to suboptimal matches, such as routing a call to an agent who is under-skilled or over-skilled for the specific task (’420 Patent, col. 4:35-61).
• The Patented Solution: The invention proposes a method to match a "first entity" (e.g., a caller) with a "second entity" (e.g., an agent) through an "automated optimization." This optimization considers not only the quality of the match but also the "economic surplus" it generates and the "opportunity cost" of making that specific second entity unavailable for other potential matches (’420 Patent, Abstract). This process is facilitated by defining parameters for both entities using "multivalued scalar data" and using a processor and call router to execute the matching logic (’420 Patent, Abstract; Fig. 3).
• Technical Importance: This approach provided a framework for moving beyond simple skill-based routing to a more sophisticated, economically-driven model for managing resources in complex communication environments like call centers (’420 Patent, col. 21:4-22:42).

Key Claims at a Glance

• The complaint asserts infringement of one or more claims of the ’420 Patent without specifying which claims are asserted (Compl. ¶15). Independent claim 1 is representative.
• Independent Claim 1:
  • 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 for each of the plurality of second entities, representing their respective characteristic parameters;
  • performing an automated optimization with respect to an economic surplus of a respective match of the first entity with one of the second entities;
  • and an opportunity cost of the unavailability of that second entity for matching with an alternate first entity.

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.

The Invention Explained

• Problem Addressed: Similar to the ’420 patent, the ’748 patent addresses the shortcomings of conventional call distribution systems that do not intelligently factor in agent skills and other variables, leading to inefficient transactional throughput (’748 Patent, col. 3:45-4:34).
• The Patented Solution: The invention is a communications routing system that represents both "communications sources" and "communications targets" with predicted characteristics, each having an "economic utility." The system then determines an optimal routing between them by "maximizing an aggregate utility" with respect to their predicted characteristics (’748 Patent, Abstract). The specification describes this as optimizing a "cost-utility function for long term call center operation" rather than just short-term efficiency (’748 Patent, Fig. 1, element 312; col. 27:8-21).
• Technical Importance: The system enables communication routing based on a holistic, utility-maximization framework, aiming for long-term operational efficiency rather than simple, immediate transactional throughput (’748 Patent, col. 27:8-21).

Key Claims at a Glance

• The complaint asserts infringement of one or more claims of the ’748 Patent without specifying particular claims (Compl. ¶21). Independent claim 1 is representative.
• Independent Claim 1:
  • A communications routing method, comprising:
  • representing, using a computer, a plurality of predicted characteristics of a plurality of communications sources, each having an economic utility;
  • representing, using a computer, a plurality of predicted characteristics of a plurality of communications targets, each having an economic utility; and
  • determining, by a computer, 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.

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.
• Technology Synopsis: This patent describes a communications management system for intelligently routing calls. The system uses a database of agent skills and a processor to compute an optimal agent selection based on a received communication's classification, and then directly controls the routing of the call (’979 Patent, Abstract).
• Asserted Claims: The complaint asserts infringement of one or more claims (Compl. ¶30).
• Accused Features: The complaint alleges that Defendant's products practice the claimed technology (Compl. ¶35).

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.
• Technology Synopsis: This patent, related to the ’979 patent, discloses a system for optimizing communications routing. It determines an optimal target for a communication based on a combinatorial optimization of characteristics of the communication and potential targets, and then controls the routing based on that determination (’253 Patent, Abstract).
• Asserted Claims: The complaint asserts infringement of one or more claims (Compl. ¶39).
• Accused Features: The complaint alleges that Defendant's products practice the claimed technology (Compl. ¶41).

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.
• Technology Synopsis: This patent, a parent to the ’420 patent, describes a method for matching a first entity with a second entity. The matching is performed via an automated optimization that considers the economic surplus of a potential match and the opportunity cost of making the second entity unavailable for other potential matches (’086 Patent, Abstract).
• Asserted Claims: The complaint asserts infringement of one or more claims (Compl. ¶45).
• Accused Features: The complaint alleges that Defendant's products practice the claimed technology (Compl. ¶50).

III. The Accused Instrumentality

Product Identification

• The complaint refers generally to "Exemplary Defendant Products" without identifying any specific product or service by name (Compl. ¶15, ¶21, ¶30, ¶39, ¶45).

Functionality and Market Context

• The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific functionality. It alleges that the unspecified products practice the technology claimed by the patents-in-suit (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). Given that the Defendant is Booking Holdings Inc., the accused products are presumably related to its online travel and booking platforms. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits for each asserted patent (Exhibits 6-10), but these exhibits were not filed with the complaint (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). The narrative infringement theory is summarized below.

• ’420 Patent Narrative Theory: The complaint alleges that Defendant’s products infringe by matching entities (e.g., users and travel providers) through an automated process that satisfies all elements of the asserted claims (Compl. ¶15-17). The theory suggests this matching process inherently performs an optimization considering economic factors analogous to the claimed "economic surplus" and "opportunity cost."
• ’748 Patent Narrative Theory: The complaint alleges that Defendant’s products infringe by representing characteristics of communication sources (users) and targets (providers), each with an economic utility, and then determining an optimal routing or matching between them by maximizing an "aggregate utility" (Compl. ¶21-26).
• Identified Points of Contention:
  • Scope Questions: A central question may be whether the patent claims, which are described primarily in the context of real-time telephonic call routing, can be construed to cover the operations of an online e-commerce platform. Does a user selecting a hotel from a list of search results constitute an "intelligent communication routing system" or "matching entities in an auction" as those terms are used in the patents?
  • Technical Questions: The complaint makes conclusory allegations of infringement without providing technical details of the accused products' operation. A key question will be what evidence, if any, demonstrates that Defendant’s systems perform the specific multi-factor economic calculations required by the claims, such as determining an "opportunity cost" (’420 Patent) or "maximizing an aggregate utility" (’748 Patent).

V. Key Claim Terms for Construction

’420 Patent

• The Term: "automated optimization with respect to an economic surplus ... and an opportunity cost"
• Context and Importance: This phrase constitutes the core functional limitation of the independent claims. The definition of each component—"automated optimization," "economic surplus," and "opportunity cost"—will be critical to the infringement analysis. Practitioners may focus on whether Defendant's standard e-commerce ranking and recommendation algorithms perform this specific, multi-part economic calculation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification discusses optimizing a "cost-utility function for long term call center operation," which could be argued to support a broad interpretation of economic optimization beyond a rigid formula (’420 Patent, col. 24:37-41).
  • Evidence for a Narrower Interpretation: The specification provides a specific formulaic representation of the optimization, which includes distinct terms for the value of the agent, the value of the transaction, and the opportunity cost of allocating that agent, potentially limiting the scope to systems that perform a similar, explicit calculation (’420 Patent, col. 24:51-62).

’748 Patent

• The Term: "maximizing an aggregate utility"
• Context and Importance: This term defines the central goal of the claimed routing method. The dispute may turn on what constitutes "aggregate utility" and what it means to "maximize" it in the context of the patent. Defendant may argue its systems optimize for user-selected criteria (e.g., lowest price) rather than a patent-defined "aggregate utility."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent abstract describes the concept at a high level, referring to maximizing utility with respect to "predicted characteristics," which could support a broad definition not tied to a specific formula (’748 Patent, Abstract).
  • Evidence for a Narrower Interpretation: The detailed description grounds the concept of utility in a specific "cost-utility function" that includes factors such as agent cost, training costs, and business goals like customer satisfaction, suggesting a narrower, more complex calculation is required (’748 Patent, col. 23:20-24:41).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 patents. The allegations are based on Defendant distributing "product literature and website materials inducing end users" to use the accused products in an infringing manner (Compl. ¶24, ¶33, ¶48). Knowledge is alleged to exist at least from the date the complaint was served (Compl. ¶25, ¶34, ¶49).
• Willful Infringement: The complaint alleges "Actual Knowledge of Infringement" for the ’748, ’979, and ’086 patents, but bases this knowledge solely on the service of the complaint and its attached (but unfiled) claim charts (Compl. ¶23, ¶32, ¶47). This asserts only post-suit knowledge and does not allege pre-suit willfulness.

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

• A core issue will be one of definitional scope: can the claims of the patents-in-suit, rooted in the technological context of real-time call center management and agent-based routing, be construed broadly enough to read on the fundamentally different user-driven interactions of an online travel booking platform?
• A key evidentiary question will be one of operational proof: what factual evidence can Plaintiff produce to demonstrate that Defendant's commercial systems actually perform the specific, multi-factor economic and utility-based optimizations recited in the claims, such as calculating "opportunity cost" or "maximizing an aggregate utility," beyond conclusory allegations?