Patent Armory Inc v. U Haul Intl Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: U-Haul International, Inc. (Nevada)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00588, W.D. Tex., 08/12/2023
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business within the Western District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s customer contact and communication routing systems infringe five patents related to intelligent call routing and auction-based matching of entities.
• Technical Context: The technology relates to automated call distribution (ACD) systems used in call centers to route incoming communications to appropriate agents based on various factors.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history concerning the patents-in-suit. U.S. Patent No. 10,237,420 is a continuation of the application that led to U.S. Patent No. 9,456,086, indicating a shared specification and prosecution history between these two 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"

The Invention Explained

• Problem Addressed: The patent's background describes inefficiencies in traditional call centers that use static agent groupings, which can result in routing callers to either under-skilled or over-skilled agents, reducing transactional throughput and customer satisfaction (’420 Patent, col. 4:35-5:20).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., a caller) with a "second entity" (e.g., a call center agent) as an auction. The system defines profiles for each entity using "multivalued scalar data" and performs an "automated optimization" that considers the "economic surplus" of a potential match and the "opportunity cost" of making an agent unavailable for other potential matches (’420 Patent, Abstract; col. 18:5-22). This allows for dynamic, economically-driven matching instead of static, rule-based routing.
• Technical Importance: This approach applies principles of auction theory and economic optimization to the technical problem of call center resource allocation, aiming to create more efficient and globally optimal matches than prior art systems that relied on simpler, sequential logic (’420 Patent, col. 21:3-22:2).

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" without specifying them (Compl. ¶15). Independent claim 1 is representative.
• Essential elements of Claim 1 include:
  • Defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity and characteristic parameters for each of a plurality of second entities.
  • Performing an automated optimization with respect to an economic surplus of a respective match of the first entity with one of the second entities.
  • The optimization also considers an opportunity cost of 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, but the language is broad enough to encompass them.

U.S. Patent No. 10,491,748 - "Intelligent communication routing system and method"

The Invention Explained

• Problem Addressed: The patent addresses the same technical problems as the ’420 Patent, namely the inefficiencies of conventional Automatic Call Distributor (ACD) systems that lead to mismatches between caller needs and agent skills (’748 Patent, col. 2:27-3:20).
• The Patented Solution: The invention is a communications routing system that models communication "sources" (e.g., callers) and "targets" (e.g., agents) using predicted characteristics, each having an "economic utility." The system determines an "optimal routing" between them by "maximizing an aggregate utility" across the available linkages (’748 Patent, Abstract). Figure 1 illustrates a decision process that routes calls based on either short-term efficiency or long-term considerations like agent training, depending on the call center's capacity (’748 Patent, Fig. 1).
• Technical Importance: The technology aims to provide a more holistic and economically-grounded approach to call routing by maximizing a global utility function rather than relying on simple, sequential matching rules.

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" without specifying them (Compl. ¶21). Independent claim 1 is representative.
• Essential elements of Claim 1 include:
  • A communications routing system with at least one processor configured to:
  • Represent a plurality of predicted characteristics of communications sources, each having an economic utility.
  • Represent a plurality of predicted characteristics of communications targets, each having an economic utility.
  • Determine an optimal routing by maximizing an aggregate utility with respect to the predicted characteristics of the source and destination 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: The patent addresses inefficient call routing in traditional call centers (’979 Patent, col. 2:48-3:44). The invention provides a system for routing calls based on an intelligent, multifactorial analysis of agent skills and call characteristics, moving beyond simple first-in-first-out queues to optimize agent selection based on factors like skill level, training value, and cost-utility functions (’979 Patent, col. 18:8-18:41).
• Asserted Claims: "one or more claims" (Compl. ¶30).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" related to Defendant's customer communication systems (Compl. ¶30).

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

• Technology Synopsis: This patent addresses the same technical challenges of call center inefficiency as the ’979 patent (’253 Patent, col. 2:48-3:44). The solution involves an intelligent control system that performs a cost-utility optimization for matching callers to agents, considering not only agent skills but also factors such as the value of training a less-skilled agent on a particular call, especially during non-peak hours (’253 Patent, col. 23:23-24:42).
• Asserted Claims: "one or more claims" (Compl. ¶39).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" related to Defendant's customer communication systems (Compl. ¶39).

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

• Technology Synopsis: As the parent of the ’420 patent, this invention addresses the problem of inefficiently matching entities in communications systems (’086 Patent, col. 4:35-5:20). It proposes treating the matching process as an auction, where an automated optimization is performed based on the "economic surplus" of a match and the "opportunity cost" of making one entity unavailable for other potential matches, thereby moving beyond simple rule-based routing to a more dynamic, economic model (’086 Patent, Abstract).
• Asserted Claims: "one or more claims" (Compl. ¶45).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" related to Defendant's customer communication systems (Compl. ¶45).

III. The Accused Instrumentality

Product Identification

• The complaint does not identify any accused products, methods, or services by name. It refers generally to "Exemplary Defendant Products" that are identified in claim charts incorporated by reference as exhibits (Compl. ¶15).

Functionality and Market Context

• The complaint does not describe the specific functionality of the accused instrumentalities. Based on the asserted patents' focus on call center technology and Defendant's business as a moving and storage company, the accused instrumentalities are presumably Defendant's customer service and reservation systems, which may include telephone call centers, online chat platforms, or other communication routing infrastructures (Compl. ¶¶15, 21, 30, 39, 45). The complaint alleges that Defendant makes, uses, sells, and imports these products and that its employees internally test and use them (Compl. ¶¶15-16). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges infringement of all five patents-in-suit and states that it incorporates claim charts by reference in Exhibits 6, 7, 8, 9, and 10 (Compl. ¶¶17, 26, 35, 41, 50). These exhibits were not provided with the complaint. Therefore, the specific mapping of claim elements to the accused functionality cannot be presented.

• Identified Points of Contention:
  • Scope Questions: A central question for the '420 and '086 patents will be whether the terms "auction," "economic surplus," and "opportunity cost," which are rooted in formal economic theory, can be construed to read on the likely business-rule-based logic of Defendant's customer routing system. For the '748, '979, and '253 patents, a similar question arises as to whether Defendant's system performs a mathematical "maximization of an aggregate utility" or a "cost-utility function," or if it employs a simpler, non-infringing matching process.
  • Technical Questions: A key evidentiary question will be what proof exists that Defendant's systems perform the specific, multi-factorial, and often global optimizations required by the asserted claims. The complaint does not provide detail on whether the accused systems use "multivalued scalar data" for both callers and agents or how they might calculate concepts like "training value" or "opportunity cost" as described in the patents.

V. Key Claim Terms for Construction

"automated optimization with respect to an economic surplus" (from ’420 Patent, Claim 1)

• Context and Importance: This term is central to the novelty described in the '420 and '086 patents. The outcome of the case may depend on whether this term is construed narrowly to require a formal auction-based economic calculation or more broadly to cover any system that considers costs and benefits in routing.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification's discussion of a "cost-utility function" that can be modified with various factors, including non-economic ones like training value or customer satisfaction, may support a broader interpretation that does not require a strict market-based auction (’420 Patent, col. 24:1-50).
  • Evidence for a Narrower Interpretation: The patent’s title ("...matching entities in an auction"), abstract, and repeated use of terms like "economic surplus" and "opportunity cost" could support a narrower construction limited to systems that explicitly model the matching problem as a formal economic auction (’420 Patent, Abstract; col. 21:3-22:2).

"maximizing an aggregate utility" (from ’748 Patent, Claim 1)

• Context and Importance: This term suggests a global optimization across all potential pairings of sources and targets, rather than a simple sequential search for the first available or best-skilled agent for a single incoming call. Infringement may turn on whether Defendant's system performs this type of holistic, aggregate calculation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes optimizing a "cost-utility function" in general terms, which a defendant might argue is met by any system that improves efficiency, even without a formal aggregate maximization (’748 Patent, col. 23:41-24:42).
  • Evidence for a Narrower Interpretation: The specification explicitly discusses comparing "all of the cost functions for the matters in the queue with respect to each permissible pairing of agent and matter" to select an "optimal pairing of respective multiple agents with multiple matters," which supports a construction requiring a combinatorial, aggregate optimization (’748 Patent, col. 24:58-67).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 patents. The basis for inducement is the allegation that Defendant distributes "product literature and website materials" that instruct end users and others to use the accused products in an infringing manner (Compl. ¶¶24, 33, 48).
• Willful Infringement: The complaint does not use the term "willful." However, for the ’748, ’979, and ’086 patents, it alleges that service of the complaint constitutes "Actual Knowledge of Infringement" and that Defendant's infringement has continued post-filing, which could form the basis for a claim of post-suit willful infringement (Compl. ¶¶23, 32, 47).

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

• A core issue will be one of definitional scope: can the patents' claims, which use precise language from economic and optimization theory such as "auction," "economic surplus," and "maximizing an aggregate utility," be construed broadly enough to cover the functionality of a commercial customer service routing system that likely operates on a set of business rules rather than formal economic models?
• A key evidentiary question will be one of operational proof: in the absence of technical details in the complaint, the case will likely depend on discovery to reveal whether Defendant’s systems actually perform the specific, multi-factorial, and holistic computations required by the claims, or if there is a fundamental mismatch in their technical operation compared to the patented methods.