Patent Armory Inc v. Costco Wholesale Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Costco Wholesale Corporation (Washington)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00595, W.D. Tex., 08/15/2023
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the Western District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services infringe five U.S. patents related to intelligent call routing for telephony systems and auction-based methods for matching entities.
• Technical Context: The patents address technologies for optimizing resource allocation in communications, particularly in call centers, by using algorithms to match callers with agents based on skills, costs, and other factors, a critical function in large-scale customer service operations.
• Key Procedural History: The asserted patents claim priority to applications filed between 2002 and 2006, creating a lengthy time span for the relevant prior art. The complaint itself serves as the initial notice to the Defendant for three of the five asserted patents.

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, titled “Method and system for matching entities in an auction,” issued March 19, 2019.

The Invention Explained

• Problem Addressed: The patent’s background describes inefficiencies in traditional call center management, where systems like Automatic Call Distributors (ACDs) use simplistic routing (e.g., first-come-first-served) that fails to optimally match callers with appropriately skilled agents, leading to poor resource utilization (’420 Patent, col. 2:26-50).
• The Patented Solution: The invention proposes a system that matches a first entity (e.g., a caller) with a second entity (e.g., an agent) by performing an automated optimization. This optimization considers the "economic surplus" of a potential match and the "opportunity cost" of making that agent unavailable for other potential matches, moving beyond simple queuing to a more dynamic, economic-based model (’420 Patent, Abstract; col. 24:43-50).
• Technical Importance: This approach represents a shift from static, rule-based call distribution to dynamic, utility-based optimization, aiming to improve overall call center efficiency by treating each routing decision as a microeconomic transaction (’420 Patent, col. 4:5-9).

Key Claims at a Glance

• The complaint does not identify specific asserted claims, instead referring to charts in an exhibit not provided with the complaint (Compl. ¶15, ¶17).

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

• Patent Identification: U.S. Patent No. 10,491,748, titled “Intelligent communication routing system and method,” issued November 26, 2019.

The Invention Explained

• Problem Addressed: The patent identifies the same problem as the ’420 Patent: the limitations of conventional call centers that struggle to balance customer service quality with efficient use of agent resources, particularly when agents and calls have diverse characteristics (’748 Patent, col. 2:25-34).
• The Patented Solution: The invention describes a routing system that determines an optimal routing path by maximizing an "aggregate utility." This utility is calculated based on the predicted characteristics of both the communication sources (e.g., callers) and the communication targets (e.g., agents), allowing for a holistic optimization of all concurrent routing decisions (’748 Patent, Abstract). The system explicitly values factors like agent training as a utility, enabling long-term optimization over short-term efficiency (’748 Patent, col. 35:30-41).
• Technical Importance: The technology aims to create a more intelligent and adaptive routing system by quantifying and balancing numerous competing factors, such as agent cost, training value, and anticipated call outcomes, within a unified optimization framework (’748 Patent, col. 4:5-9).

Key Claims at a Glance

• The complaint does not identify specific asserted claims, instead referring to charts in an exhibit not provided with the complaint (Compl. ¶21, ¶26).

U.S. Patent No. 7,023,979 - Telephony control system with intelligent call routing

• Patent Identification: U.S. Patent No. 7,023,979, titled “Telephony control system with intelligent call routing,” issued April 4, 2006 (Compl. ¶11).

Technology Synopsis

• This patent describes a communications management system that uses a database of agent skills and a processor to compute an optimal agent selection based on a received communication's classification. The system is designed to directly control the routing of the communication based on this optimization (’979 Patent, Abstract).

Asserted Claims

• The complaint does not identify specific asserted claims, instead referring to charts in an exhibit not provided with the complaint (Compl. ¶30, ¶35).

Accused Features

• The complaint accuses unspecified features of the "Exemplary Defendant Products" of infringement (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, titled “Telephony control system with intelligent call routing,” issued September 11, 2007 (Compl. ¶12).

Technology Synopsis

• This patent, a continuation of the '979 patent family, discloses a similar telephony control system. It determines an optimum target for a communication by performing a combinatorial optimization based on the communication's characteristics and the targets' attributes, and then controls routing based on the outcome (’253 Patent, Abstract).

Asserted Claims

• The complaint does not identify specific asserted claims, instead referring to charts in an exhibit not provided with the complaint (Compl. ¶39, ¶41).

Accused Features

• The complaint accuses unspecified features of the "Exemplary Defendant Products" of infringement (Compl. ¶39).

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, titled “Method and system for matching entities in an auction,” issued September 27, 2016 (Compl. ¶13).

Technology Synopsis

• This patent, from the same family as the ’420 patent, describes a method for matching entities by defining their characteristics as multivalued scalar data. It then performs an automated optimization that considers the economic surplus of a match and the opportunity cost of making a resource unavailable for other potential matches (’086 Patent, Abstract).

Asserted Claims

• The complaint does not identify specific asserted claims, instead referring to charts in an exhibit not provided with the complaint (Compl. ¶45, ¶50).

Accused Features

• The complaint accuses unspecified features of the "Exemplary Defendant Products" of infringement (Compl. ¶45).

III. The Accused Instrumentality

Product Identification

The complaint does not name any specific accused products, methods, or services in its narrative text. It refers generally to "Exemplary Defendant Products" that are allegedly identified in claim chart exhibits (Compl. ¶15, ¶17, ¶21). These exhibits were not provided with the complaint.

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that the "Exemplary Defendant Products" practice the technology claimed by the patents-in-suit and satisfy all elements of the "Exemplary" patent claims (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). However, the complaint defers all specific infringement allegations, including the identification of asserted claims and the mapping of claim elements to product features, to external exhibits that were not provided. The complaint does not contain a narrative infringement theory or claim charts in its body.

Consequently, a detailed analysis of the infringement allegations is not possible based on the provided document.

V. Key Claim Terms for Construction

The complaint does not provide sufficient detail for analysis, as it fails to identify the specific independent claims asserted from any of the five patents-in-suit. Without the asserted claim language, no analysis of key terms for construction can be performed.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’748, ’979, and ’086 patents. The allegations are based on Defendant selling the accused products to customers for infringing uses and distributing "product literature and website materials" that allegedly instruct users on how to infringe (Compl. ¶24-25, ¶33-34, ¶48-49).
• Willful Infringement: The complaint does not use the term "willful." However, for the ’748, ’979, and ’086 patents, it pleads that the service of the complaint and its attached claim charts constitutes "actual knowledge" of infringement (Compl. ¶23, ¶32, ¶47). This allegation establishes a basis for potential post-suit enhancement of damages.

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

• A core procedural question will be one of foundation and notice: The complaint defers all substantive allegations—including the identity of the accused products and the asserted patent claims—to external exhibits. A primary issue for the court and the Defendant will be to establish these foundational facts, without which the case cannot meaningfully proceed.
• A key technical question will be one of temporal and technological scope: The asserted patents claim priority from 2002 to 2006 and cover related but distinct concepts in call routing and auction-based matching. A central dispute will likely involve mapping the specific functionality of the yet-to-be-identified products onto the claims of five different patents with varying priority dates, technological focuses, and prior art landscapes.
• A central legal question will be one of inducement: For three of the patents, the case may turn on whether Plaintiff can show that Defendant’s product literature and user instructions actively encouraged customers to use the accused products in a manner that directly infringes the specific steps recited in the patent claims.