Patent Armory Inc v. Drury Hotels Co LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Drury Hotels Company, LLC (Nevada)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00596, W.D. Tex., 08/15/2023
• Venue Allegations: Venue is based on the defendant maintaining an established place of business in Austin, Texas, within the Western District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s hotel business operations, likely its customer service and reservation systems, infringe five patents related to intelligent call routing and auction-based matching of communications to service agents.
• Technical Context: The technology concerns advanced call center management systems that move beyond simple queuing to optimize the matching of incoming communications with available agents using economic and performance-based criteria.
• Key Procedural History: The five asserted patents originate from at least two distinct patent families, with the earliest priority dates extending back to 2002. The complaint does not mention any prior litigation or administrative 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’s background section describes inefficiencies in traditional call centers, such as suboptimal matching of callers to agents, which can lead to problems with under-skilled or over-skilled agents handling a given transaction, and the limitations of static agent groupings (’420 Patent, col. 4:35-56).
• The Patented Solution: The invention proposes a system for matching a "first entity" (e.g., a caller) with a "second entity" (e.g., an agent) by performing an "automated optimization" (’420 Patent, Abstract). This optimization considers not only the characteristics of the entities but also economic factors, such as the "economic surplus" of a potential match and the "opportunity cost" of making one agent unavailable for other potential matches (’420 Patent, Abstract; col. 24:40-50).
• Technical Importance: This economic modeling approach allows call centers to move beyond simple queuing rules to a more dynamic and globally optimized allocation of resources, potentially improving efficiency and customer satisfaction by considering a wider range of variables (’420 Patent, col. 22:4-10).

Key Claims at a Glance

• The complaint asserts "one or more claims" without specification (Compl. ¶15). Independent claim 1 is representative.
• Essential elements of independent claim 1 include:
  • Defining multivalued scalar data for a first entity (inferential targeting parameters).
  • Defining multivalued scalar data for a plurality of second entities (characteristic parameters).
  • Performing an automated optimization with respect to an economic surplus of a match between the first entity and 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 its language is broad enough to encompass them.

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: The patent addresses the same call center management problems as the ’420 Patent, including the challenge of balancing high-quality customer service with the efficient use of call center resources (’748 Patent, col. 2:26-34).
• The Patented Solution: The invention provides a communications routing system that determines an optimal routing path by representing the "predicted characteristics" of both communication sources (e.g., callers) and targets (e.g., agents), each of which has an associated "economic utility." The system seeks to maximize an "aggregate utility" across all potential pairings (’748 Patent, Abstract). This is illustrated in the patent’s description of optimizing a cost-utility function for long-term call center operation (’748 Patent, Fig. 1).
• Technical Importance: The system provides a framework for routing communications based on a holistic, utility-driven model rather than discrete, pre-programmed rules, enabling more flexible and intelligent resource allocation in a dynamic environment (’748 Patent, col. 18:9-24).

Key Claims at a Glance

• The complaint asserts "one or more claims" without specification (Compl. ¶21). Independent claim 1 is representative.
• Essential elements of independent claim 1 include:
  • Representing a plurality of predicted characteristics of communications sources, each having an economic utility.
  • Representing a plurality of predicted characteristics of communications targets, each having an economic utility.
  • Determining an optimal routing between the sources and targets.
  • The determination is made by maximizing an aggregate utility with respect to the predicted characteristics.
• The complaint does not explicitly reserve the right to assert dependent claims.

Multi-Patent Capsule: U.S. Patent No. 7,023,979

• Patent Identification: U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing", issued April 4, 2006.
• Technology Synopsis: The patent describes a communications management system that receives a classification for an incoming communication and consults a database of agent skills and skill weights. It then computes an optimum agent selection and directly controls the routing of the call to that agent ('979 Patent, Abstract).
• Asserted Claims: "one or more claims" (Compl. ¶30).
• Accused Features: The complaint accuses "at least the Defendant products identified in the charts incorporated into this Count" of infringement (Compl. ¶30).

Multi-Patent Capsule: U.S. Patent No. 7,269,253

• 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 method for optimizing call routing based on a combinatorial optimization. The system determines an optimal target for a communication based on a multifactorial analysis of the communication's classification factors and the characteristics of potential targets, performing this determination and the routing within a common operating environment ('253 Patent, Abstract).
• Asserted Claims: "one or more claims" (Compl. ¶39).
• Accused Features: The complaint accuses "at least the Defendant products identified in the charts incorporated into this Count" of infringement (Compl. ¶39).

Multi-Patent Capsule: U.S. Patent No. 9,456,086

• 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, related to the ’420 Patent, describes a method for matching entities by defining scalar data parameters for each and performing an automated optimization. The optimization is based on the "economic surplus" of a given match and the "opportunity cost" associated with making a resource unavailable for other potential matches ('086 Patent, Abstract).
• Asserted Claims: "one or more claims" (Compl. ¶45).
• Accused Features: The complaint accuses "at least the Defendant products identified in the charts incorporated into this Count" of infringement (Compl. ¶45).

III. The Accused Instrumentality

Product Identification

• The complaint generically refers to the accused instrumentalities as "Exemplary Defendant Products" (Compl. ¶15, ¶21, ¶30, ¶39, ¶45).

Functionality and Market Context

• The complaint does not describe the functionality of the accused products. It alleges in a conclusory fashion that the products "practice the technology claimed" by the patents-in-suit and incorporates by reference a series of claim chart exhibits that were not filed with the complaint (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). Given that the defendant is a hotel company, the accused products are likely its hotel reservation and customer service call center systems. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges infringement by incorporating claim chart exhibits which were not provided with the pleading (Compl. ¶18, ¶27, ¶36, ¶42, ¶51). The complaint does not contain a narrative infringement theory, stating only in a conclusory manner that the accused products "satisfy all elements" of the asserted claims (Compl. ¶17, ¶26). Therefore, a detailed analysis of the infringement allegations is not possible based on the provided document.

• Identified Points of Contention: Based on the abstract nature of the patent claims and the likely real-world functionality of a hotel reservation system, the central infringement disputes may revolve around questions of claim scope.
  • Scope Questions: Do the abstract economic and optimization terms used in the patents, such as "economic surplus" and "opportunity cost," read on the concrete operational logic of Defendant's customer service or reservation routing system? For example, does a system that routes a caller to the next available agent who speaks the correct language perform an "automated optimization" as that term is used in the patents?
  • Technical Questions: What evidence does the complaint provide that Defendant's systems perform the specific calculations or data representations required by the claims, such as creating "multivalued scalar data" for callers and agents or maximizing an "aggregate utility"?

V. Key Claim Terms for Construction

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

  • Context and Importance: This term is central to the invention, defining the core technical mechanism for matching entities. Its construction will likely determine whether the claim covers a broad range of intelligent routing systems or is limited to systems performing specific, complex economic calculations.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the goal as making "efficient use of call center resources" (’420 Patent, col. 2:34-35), which could support construing the term to cover any automated system that improves economic efficiency.
    • Evidence for a Narrower Interpretation: The specification describes the optimization in terms of specific economic factors, including "anticipated outcome," "agent cost," and "opportunity cost" (’420 Patent, col. 24:28-40), suggesting the term may require the calculation of these specific variables.

• The Term: "economic utility" (’748 Patent, Claim 1)

  • Context and Importance: The definition of this term is critical to establishing the scope of the claimed routing method. Whether a conventional performance metric (e.g., average handle time) qualifies as an "economic utility" will be a key point of dispute.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification notes that the "utility of caller satisfaction is also weighted," suggesting "utility" could encompass non-monetary or qualitative factors that have an indirect economic impact (’748 Patent, col. 36:11-12).
    • Evidence for a Narrower Interpretation: The patent discusses "economic utility" in the context of business goals that can be "normalized in economic units," such as "sales volume, profit, or the like," suggesting the term may require a direct translation into quantifiable financial metrics (’748 Patent, col. 24:32-37).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 Patents. The allegations are based on the defendant allegedly distributing "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, ¶33, ¶48). It also alleges inducement occurring at least since the service of the complaint (Compl. ¶25, ¶34, ¶49).
• Willful Infringement: The complaint does not explicitly plead willful infringement. However, it alleges "Actual Knowledge of Infringement" for the ’748, ’979, and ’086 Patents, with knowledge attaching upon service of the complaint and its associated (but not provided) claim charts (Compl. ¶23, ¶32, ¶47). This pleading structure appears calculated to support a claim for post-filing willful infringement.

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

• A threshold issue will be one of pleading sufficiency: does the complaint, which relies entirely on non-provided exhibits and offers only conclusory allegations of infringement, provide sufficient factual detail to state a plausible claim for relief under the standards established by Twombly and Iqbal?
• A central question of claim scope and eligibility will be whether the abstract economic concepts recited in the asserted claims, such as “economic surplus,” “opportunity cost,” and “economic utility,” can be construed to cover the concrete operations of a commercial hotel reservation system, or if there is a fundamental mismatch that could also raise questions of patent-eligible subject matter under 35 U.S.C. § 101.
• An evidentiary question will be one of technical proof: assuming the claims are construed broadly enough, what evidence can be produced to show that the accused hotel systems actually perform the specific multi-factorial optimizations and utility calculations required by the claims, rather than operating on simpler, conventional routing logic?