Patent Armory Inc v. Expedia Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Expedia, Inc. (Washington)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00597, W.D. Tex., 08/15/2023
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining 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 communication routing and auction-based systems for matching entities.
• Technical Context: The technology relates to optimizing the matching of communications (e.g., customer calls) with targets (e.g., service agents) in a network by using economic principles and multi-factorial analysis to improve efficiency over simple queuing methods.
• Key Procedural History: The complaint does not allege any prior litigation, licensing history, or administrative proceedings related to 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 (Issued Mar. 19, 2019)

The Invention Explained

• Problem Addressed: Traditional call center management strategies, such as routing calls to the longest-idle agent, are inefficient when agents possess varying skills (Compl. ¶8; ’420 Patent, col. 3:11-4:20). This can result in routing a complex transaction to an under-skilled agent or a simple transaction to an over-skilled agent, reducing overall throughput and efficiency (’420 Patent, col. 4:21-56).
• The Patented Solution: The invention proposes a method for matching a "first entity" (e.g., a caller) with a "second entity" (e.g., a call center agent) by treating the matching process as a type of auction (’420 Patent, col. 18:5-21). The system performs an "automated optimization" that considers not only the skill-based match but also the "economic surplus" of a potential pairing and the "opportunity cost" of making a highly skilled agent unavailable for a more valuable future match (’420 Patent, Abstract; col. 24:42-50).
• Technical Importance: This approach seeks to move beyond simple queuing to a more dynamic, value-based optimization of resources in real-time communication networks, aiming for global efficiency rather than resolving individual connections on a first-come, first-served basis (’420 Patent, col. 24:28-40).

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" without specifying them (Compl. ¶15). The following analysis is of a representative independent claim.
• Independent Claim 1:
  • A method for matching a first entity with at least one second entity selected from a plurality of second entities.
  • Defining a plurality of multivalued scalar data representing inferential targeting parameters for the first entity.
  • Defining a plurality of multivalued scalar data for each of the plurality of second entities, representing respective characteristic parameters.
  • Performing an automated optimization with respect to an economic surplus of a respective match.
  • The optimization also considers an opportunity cost of the unavailability of the at least one second entity for matching with an alternate first entity.
• The complaint reserves the right to assert additional claims, including dependent claims (Compl. ¶15).

U.S. Patent No. 10,491,748: Intelligent communication routing system and method (Issued Nov. 26, 2019)

The Invention Explained

• Problem Addressed: The patent addresses the same technical challenge as the ’420 Patent: efficiently routing communications in an environment with diverse needs and skills, such as a call center (’748 Patent, col. 1:21-2:4).
• The Patented Solution: The invention is a communications routing system that determines an optimal routing path by maximizing an "aggregate utility." It does this by representing the "predicted characteristics" of both communication sources (e.g., callers) and targets (e.g., agents) and using these representations to find the best match based on economic utility (’748 Patent, Abstract). The system is designed to be implemented at a low level within the communications management architecture, such as in a CTI host, to enable real-time, intelligent routing decisions (’748 Patent, col. 18:25-34).
• Technical Importance: This system architecture integrates intelligent, optimization-based decision-making directly into the communication switching layer, aiming to reduce latency and dependence on high-level management systems for real-time routing decisions (’748 Patent, col. 25:46-53).

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" without specifying them (Compl. ¶21). The following analysis is of a representative independent claim.
• Independent Claim 1:
  • A communications routing system comprising a processor and memory.
  • The system represents a plurality of predicted characteristics of a plurality of communications sources, each having an economic utility.
  • It also represents a plurality of predicted characteristics of a plurality of communications targets, each having an economic utility.
  • It determines an optimal routing between the sources and targets by maximizing an aggregate utility with respect to the predicted characteristics.
• The complaint reserves the right to assert additional claims, including dependent claims (Compl. ¶21).

Multi-Patent Capsule: U.S. Patent No. 7,023,979, Telephony control system with intelligent call routing (Issued Apr. 4, 2006)

• Technology Synopsis: This patent describes a telephony control system that provides for "intelligent" call routing. It focuses on using a cost-utility optimization for long-term call center operations, considering factors such as agent training and call center capacity to make routing decisions that go beyond simple skill-based matching (’979 Patent, col. 1:12-20, Fig. 1).
• Asserted Claims: The complaint asserts unspecified claims (Compl. ¶30).
• Accused Features: The complaint alleges infringement by unspecified "Exemplary Defendant Products" (Compl. ¶30).

Multi-Patent Capsule: U.S. Patent No. 7,269,253, Telephony control system with intelligent call routing (Issued Sep. 11, 2007)

• Technology Synopsis: This patent discloses a system for optimizing the matching of communications with targets in a communications center. The system determines a characteristic of the communication, accesses a skill profile for a set of agents, and performs a cost-optimization to select the best agent for the call, with the optimization and routing controlled by a common system (’253 Patent, col. 33:41-52).
• Asserted Claims: The complaint asserts unspecified claims (Compl. ¶39).
• Accused Features: The complaint alleges infringement by unspecified "Exemplary Defendant Products" (Compl. ¶39).

Multi-Patent Capsule: U.S. Patent No. 9,456,086, Method and system for matching entities in an auction (Issued Sep. 27, 2016)

• Technology Synopsis: This patent describes a method for matching entities by defining scalar data for both the "first entity" (requester) and "second entities" (providers). An automated optimization is performed that considers the "economic surplus" of a match as well as the "opportunity cost" of using a resource, framing the matching process as an auction to achieve an optimal pairing (’086 Patent, Abstract).
• Asserted Claims: The complaint asserts unspecified claims (Compl. ¶45).
• Accused Features: The complaint alleges infringement by unspecified "Exemplary Defendant Products" (Compl. ¶45).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentalities as the "Exemplary Defendant Products" (Compl. ¶15). It does not, however, name any specific Expedia product, service, or method.

Functionality and Market Context

• The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific functionality. It alleges in a conclusory manner that the unspecified products practice the technology claimed by the patents-in-suit (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references and incorporates claim chart exhibits for each of the five patents-in-suit (Exhibits 6-10), but these exhibits were not filed with the complaint (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). Consequently, a detailed claim chart summary cannot be constructed. The narrative infringement theory is summarized below.

• ’420 Patent and ’086 Patent Infringement Allegations

  • The complaint alleges that Defendant’s products practice a method of matching entities within an auction-style framework (Compl. COUNT 1, COUNT 5). The core of this allegation would require showing that Defendant’s systems define parameters for entities (e.g., customers and travel providers/agents), and then perform an automated optimization that considers factors analogous to the claimed "economic surplus" and "opportunity cost" to determine a match.
  • Identified Points of Contention: A primary question will be whether Defendant's systems perform an "automated optimization" as claimed, or if they use a less complex rules-based or keyword-matching system. Further, the application of patent terms like "auction" and "economic surplus" to the functionality of an online travel agency will likely be a central point of dispute.

• ’748 Patent, ’979 Patent, and ’253 Patent Infringement Allegations

  • The complaint alleges that Defendant’s products constitute an "intelligent communication routing system" (Compl. COUNT 2, COUNT 3, COUNT 4). This theory would require demonstrating that Defendant's systems represent characteristics of both communication sources and targets (e.g., customer queries and service agent skills) and use this data to determine an "optimal routing" that maximizes an "aggregate utility" or a "cost-utility function."
  • Identified Points of Contention: A key technical question will be whether Defendant's systems actually calculate a "utility" or "cost-utility" function to determine routing, as required by the claims. A potential scope question is whether routing customer service chats, emails, or calls within Expedia's platform falls within the scope of a "telephony control system" as described in the context of the patents.

V. Key Claim Terms for Construction

• The Term: "automated optimization" (from ’420 Patent, Claim 1)

  • Context and Importance: This term appears to be the central inventive concept. Its construction will be critical to determining whether the alleged infringing functionality, which presumably involves some form of automated matching, meets the specific requirements of the patent. Practitioners may focus on whether this term requires a specific type of mathematical optimization process or can cover more general rules-based decision engines.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification discusses optimizing a "cost-utility function" in general terms, which could be argued to cover any process that seeks to improve efficiency based on defined costs and benefits (’420 Patent, col. 24:30-40).
    • Evidence for a Narrower Interpretation: The detailed description provides specific formulas and factors for this optimization, such as considering agent cost, training utility, and anticipated transaction value, which could support an interpretation that requires a multi-factorial calculation beyond simple matching (’420 Patent, col. 23:46-24:50).

• The Term: "economic surplus" (from ’420 Patent, Claim 1)

  • Context and Importance: This term introduces an economic concept into the technical claim. The dispute will likely center on whether the accused systems calculate a quantitative value corresponding to "economic surplus" or if they simply match entities based on non-economic criteria like availability or keywords.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The term is used alongside "opportunity cost," suggesting a general value-based assessment rather than a strict financial calculation (’420 Patent, Abstract).
    • Evidence for a Narrower Interpretation: The specification details various "cost functions" and "utility" factors, such as sales volume or profit, which imply that "economic surplus" requires a quantitative, business-oriented calculation (’420 Patent, col. 24:30-40).

VI. Other Allegations

• Indirect Infringement: For U.S. Patent Nos. 10,491,748, 7,023,979, and 9,456,086, the complaint alleges induced infringement. The basis for this allegation is 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, ¶33, ¶48).
• Willful Infringement: The complaint does not use the term "willful." However, for the same three patents where inducement is alleged, it asserts that the service of the complaint and its attached claim charts constitutes "actual knowledge of infringement" (Compl. ¶23, ¶32, ¶47). This allegation may form the basis for a claim of post-suit willful infringement.

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

• Definitional Scope: A core issue will be whether claim terms rooted in the technical field of call-center optimization—such as "auction," "economic surplus," and "telephony control system"—can be construed to cover the alleged functionalities of an online travel platform. The patent specifications focus heavily on call-center agents and telephone calls, raising the question of how this language applies to Defendant's business.
• Evidentiary Sufficiency: A key question will be what evidence Plaintiff will be able to produce to demonstrate that Defendant's systems perform the specific "automated optimization" and "cost-utility" calculations required by the claims. The complaint's reliance on non-public exhibits for all specific infringement allegations suggests that the factual basis for these technical assertions will be a central point of contention during discovery and claim construction.