Patent Armory Inc v. Extended Stay America Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Extended Stay America, Inc. (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00598, 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 infringes five patents related to intelligent call routing and auction-based systems for matching entities.
• Technical Context: The patents relate to the field of computer-telephony integration, specifically systems for optimizing the allocation of resources, such as call center agents, to incoming tasks, such as customer calls.
• Key Procedural History: The complaint does not reference any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history concerning 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 March 19, 2019

The Invention Explained

• Problem Addressed: The patent's background section describes the inefficiencies of traditional call centers that use simple routing logic, such as first-come-first-served or longest-idle-agent rules. These methods are suboptimal when agents have different skills, potentially leading to mismatches where callers are routed to under-skilled or over-skilled agents, reducing overall efficiency (’420 Patent, col. 3:1-4:34).
• The Patented Solution: The invention proposes a system that treats the matching of a "first entity" (e.g., a caller) to a "second entity" (e.g., an agent) as an auction. It does this by defining "multivalued scalar data" for both entities and then performing an "automated optimization" that considers not only the quality of the immediate match (the "economic surplus") but also the "opportunity cost" of making that specific agent unavailable for other potential matches (’420 Patent, Abstract; col. 21:5-22:3). This creates a dynamic, economically-driven routing decision process.
• Technical Importance: The technology represents a shift from static, rule-based call routing to a dynamic, market-based mechanism for allocating telecommunication resources in real-time (’420 Patent, col. 18:8-24).

Key Claims at a Glance

• The complaint alleges infringement of one or more claims of the ’420 Patent, referencing claim charts in an external exhibit not attached to the pleading (Compl. ¶¶15, 17). Independent claim 1 is representative.
• Essential elements of independent claim 1 include:
  • Defining a plurality of multivalued scalar data representing inferential targeting parameters for a first entity.
  • Defining a plurality of multivalued scalar data for each of a plurality of second entities, representing respective characteristic parameters.
  • Performing an automated optimization with respect to an economic surplus of a respective match and an opportunity cost of the unavailability of the second entity for an alternate match.

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

Issued November 26, 2019

The Invention Explained

• Problem Addressed: The patent identifies inefficiencies in computer-telephony systems where the high-level management software, which understands agent skills and business goals, is separate from the low-level switching equipment. This separation can introduce latency and communication overhead, impeding real-time, intelligent routing decisions (’748 Patent, col. 2:25-3:34).
• The Patented Solution: The invention describes an "intelligent switching architecture" that integrates the optimization logic directly into the low-level communications control system. Instead of routing to a predetermined address, the system uses a processor to evaluate a "probabilistic function" based on the characteristics of the incoming request and the available "partners" (e.g., agents) to generate a control signal that establishes the communication channel (’748 Patent, Abstract; col. 18:8-24).
• Technical Importance: By embedding the routing intelligence at a lower level of the communications architecture, the system aims to reduce latency and allow for more complex, real-time optimization without constant communication with external high-level management systems (’748 Patent, col. 19:24-34).

Key Claims at a Glance

• The complaint alleges infringement of one or more claims of the ’748 Patent, referencing claim charts in an external exhibit not attached to the pleading (Compl. ¶¶21, 26). Independent claim 1 is representative.
• Essential elements of independent claim 1 include:
  • At least one port configured to receive a request and information identifying a characteristic associated with the request.
  • At least one memory storing availability information and at least one characteristic for each of a plurality of partners.
  • At least one automated processor configured to generate a control signal based on an evaluation of a probabilistic function of the request characteristic and the partner characteristics.

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

Issued April 4, 2006

• Patent Identification: U.S. Patent No. 7,023,979, "Telephony control system with intelligent call routing," issued April 4, 2006 (Compl. ¶11).
• Technology Synopsis: The patent describes a communications management system that receives a "communications classification" for an incoming call and consults a database of agent skills and another of skill weights. A processor then computes an optimal agent selection based on this information to control the routing of the call (’979 Patent, Abstract).
• Asserted Claims: One or more claims, with specifics incorporated by reference to an external exhibit (Compl. ¶¶30, 35).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" of practicing the claimed technology, as detailed in an external exhibit (Compl. ¶30).

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

Issued September 11, 2007

• Patent Identification: U.S. Patent No. 7,269,253, "Telephony control system with intelligent call routing," issued September 11, 2007 (Compl. ¶12).
• Technology Synopsis: The patent discloses a method for routing communications by determining an optimum target based on a "combinatorial optimization" of the characteristics of the communication and available targets. The system is intended to operate within a common computing environment to make a routing decision (’253 Patent, Abstract).
• Asserted Claims: One or more claims, with specifics incorporated by reference to an external exhibit (Compl. ¶¶39, 41).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" of practicing the claimed technology, as detailed in an external exhibit (Compl. ¶39).

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

Issued September 27, 2016

• Patent Identification: U.S. Patent No. 9,456,086, "Method and system for matching entities in an auction," issued September 27, 2016 (Compl. ¶13).
• Technology Synopsis: This patent, related to the ’420 Patent, describes an auction-based method for matching entities. The method involves defining scalar data for inferential targeting parameters (for a first entity) and characteristic parameters (for second entities), and then performing an automated optimization based on the economic surplus and opportunity cost of a potential match (’086 Patent, Abstract).
• Asserted Claims: One or more claims, with specifics incorporated by reference to an external exhibit (Compl. ¶¶45, 50).
• Accused Features: The complaint accuses unspecified "Exemplary Defendant Products" of practicing the claimed technology, as detailed in an external exhibit (Compl. ¶45).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific product, system, or service by name. It refers generally to "Exemplary Defendant Products" (Compl. ¶15).
• Functionality and Market Context: The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities. All technical details regarding the accused products are incorporated by reference to external exhibits that were not filed with the pleading (Compl. ¶¶17, 26, 35, 41, 50).

IV. Analysis of Infringement Allegations

The complaint does not provide a narrative infringement theory or claim charts for any of the patents-in-suit. For each asserted patent, the complaint states that infringement is demonstrated in charts included in external Exhibits 6, 7, 8, 9, and 10, respectively (Compl. ¶¶17, 26, 35, 41, 50). These exhibits were not provided with the complaint. As such, a detailed analysis of the infringement allegations is not possible based on the provided document.

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Factual Questions: The primary point of contention will be establishing the basic facts of how Defendant's systems operate. A key question for the court will be what evidence Plaintiff can present to demonstrate that Defendant’s customer service, booking, or other systems perform the specific functions required by the claims, such as the "automated optimization" ('420 Patent) or the evaluation of a "probabilistic function" ('748 Patent).
  • Scope Questions: The patents-in-suit describe complex, economically-driven optimization and auction systems. A potential dispute may arise over whether the scope of the claims, when properly construed, can read on the potentially more conventional, rules-based systems that a hospitality company might employ for customer service or reservations.

V. Key Claim Terms for Construction

For the ’420 Patent:

• The Term: "automated optimization with respect to an economic surplus ... and an opportunity cost" (from Claim 1).
• Context and Importance: This phrase constitutes the core inventive step of the claim. The case will likely turn on whether Defendant's accused system performs a function that meets this definition. Practitioners may focus on this term because it appears to require a specific, multi-faceted economic calculation, rather than a simple technical matching algorithm.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides various formulations for the cost-utility function, stating that disparate factors can be "normalized into a common metric, 'cost', which is then subject to numeric analysis," suggesting a potentially broad scope of what constitutes an "economic" optimization (’420 Patent, col. 23:19-24:14).
  • Evidence for a Narrower Interpretation: The patent's title and abstract frame the invention as an "auction." Specific embodiments discuss concepts like agents bidding for calls and calculating changes in value, which could support a narrower construction tied to explicit market-based or bidding mechanisms (’420 Patent, col. 22:50-60).

For the ’748 Patent:

• The Term: "probabilistic function" (from Claim 1).
• Context and Importance: This term specifies the mathematical nature of the evaluation used to route communications. Its construction is critical because Defendant may argue its systems use deterministic, non-probabilistic rules (e.g., "if-then" logic), which would place them outside the claim's scope.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification states that intelligent functions can include "probabilistic and stochastic process calculations, fuzzy logic, Bayesian logic and hierarchical Markov models," providing several examples that could support a broad definition of what constitutes a "probabilistic function" (’748 Patent, col. 18:37-41).
  • Evidence for a Narrower Interpretation: The emphasis on specific mathematical models like Bayesian networks or Markov models could be used to argue for a narrower construction that requires more than a simple weighting of factors, but instead a formal probabilistic calculation (’748 Patent, col. 18:37-41).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 Patents. The allegations are based on the claim 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). No specific documents are identified in the body of the complaint.
• Willful Infringement: While the complaint does not contain a formal count for willful infringement, it alleges "Actual Knowledge of Infringement" for the ’748, ’979, and ’086 Patents based on the service of the complaint itself (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

1. A central issue will be one of evidentiary sufficiency: Given that the complaint lacks any specific factual allegations about the accused products, the case will depend entirely on what evidence Plaintiff can discover and present to show that Defendant’s internal systems actually perform the specific, complex "automated optimization," "probabilistic," and "combinatorial" functions required by the asserted claims.
2. A second key issue will be one of technical scope: The patents describe sophisticated, economically-driven auction and optimization frameworks for resource allocation. A core question for the court will be whether the claims, rooted in advanced call-center technology, can be construed to cover what may be a more conventional, rules-based customer-facing system used by a hospitality company.