Patent Armory Inc v. Hilton Worldwide Holdings Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Hilton Worldwide Holdings Inc. (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:23-cv-00600, W.D. Tex., 08/15/2023
• Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant maintains an established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer communication and service systems infringe five patents related to intelligent call routing, resource matching, and auction-based optimization.
• Technical Context: The patents address technologies for optimizing large-scale communication centers by using multi-factor analysis to match incoming requests (e.g., customer calls) with available resources (e.g., service agents) to maximize efficiency and economic utility.
• Key Procedural History: The complaint does not reference any prior litigation, licensing history, or post-grant proceedings involving the patents-in-suit.

Case Timeline

II. Technology and Patent(s)-in-Suit Analysis

No probative visual evidence provided in complaint.

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: The patent describes the inefficiency of conventional call centers that use rigid, static models for routing communications, leading to mismatches such as routing calls to under-skilled or over-skilled agents (Compl. ¶9; ’420 Patent, col. 4:35-64). This results in wasted resources and poor customer service (’420 Patent, col. 2:26-34).
• The Patented Solution: The invention proposes a method for dynamically matching a "first entity" (e.g., a caller) with a "second entity" (e.g., an agent) by performing an automated, multifactorial optimization (’420 Patent, col. 9:18-24). The system defines profiles for each entity using "multivalued scalar data" and calculates an optimal match based on the "economic surplus" of the pairing and the "opportunity cost" of making that agent unavailable for other potential matches (’420 Patent, Abstract; Fig. 1).
• Technical Importance: The technology aims to replace simple first-in, first-out or longest-idle agent routing with a more sophisticated, economically-driven model that can manage complex, multi-skilled agent pools more efficiently (’420 Patent, col. 4:13-34).

Key Claims at a Glance

• The complaint does not identify specific asserted claims, instead referring to "Exemplary '420 Patent Claims" in an un-filed exhibit (Compl. ¶15, ¶17). Independent claim 1 is representative of the core invention.
• Essential elements of Independent Claim 1 include:
  • 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 their 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 matched second entity for matching with an alternate first entity.

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 problems as the ’420 Patent: the inefficiencies and suboptimal performance of traditional call centers that lack intelligent, dynamic routing capabilities (Compl. ¶10; ’748 Patent, col. 1:26–2:49, incorporating by reference U.S. Pat. No. 7,023,979).
• The Patented Solution: The invention is a communications routing system that models both communication "sources" and "targets" based on their predicted characteristics and an associated "economic utility" (’748 Patent, Abstract). The system then determines an "optimal routing" between them by "maximizing an aggregate utility" for all linkages, rather than just finding the best match for a single communication in isolation (’748 Patent, col. 40:20-30; Fig. 1).
• Technical Importance: This approach frames the routing problem as a global optimization of aggregate utility across the entire system, moving beyond simple one-to-one matching to consider the system-wide impact of each routing decision (’748 Patent, col. 24:41-50).

Key Claims at a Glance

• The complaint refers to "Exemplary '748 Patent Claims" in an un-filed exhibit (Compl. ¶21, ¶26). Independent claim 1 is representative.
• Essential elements of Independent Claim 1 include:
  • A communications routing system with a processor.
  • The processor is configured to represent predicted characteristics of a plurality of communications sources, each having an economic utility.
  • The processor is configured to represent predicted characteristics of a plurality of communications targets, each having an economic utility.
  • The processor is configured to determine an optimal routing between the sources and targets by maximizing an aggregate utility with respect to their respective predicted characteristics.

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

• Technology Synopsis: This patent, a parent to the ’748 Patent, discloses a system for intelligent call routing in a telephony environment (Compl. ¶11; ’979 Patent, Abstract). It addresses the problem of inefficiently matching callers with agents in a call center by proposing a system that uses a cost-utility function, considering factors like agent skills and call center capacity, to determine an optimal routing assignment (’979 Patent, Fig. 1).
• Asserted Claims: The complaint does not specify claims, referring to an un-filed Exhibit 8 (Compl. ¶35).
• Accused Features: The complaint makes a general allegation that "Exemplary Defendant Products" infringe the patent (Compl. ¶30).

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

• Technology Synopsis: This patent, related to the ’979 Patent, also describes an intelligent call routing system for telephony control (Compl. ¶12; ’253 Patent, Abstract). It addresses the problem of optimizing call center agent assignments by using a processor to compute an optimal agent selection based on a communications classification and a database of agent skills and weights, directly controlling the call routing (’253 Patent, Abstract; Fig. 2).
• Asserted Claims: The complaint does not specify claims, referring to an un-filed Exhibit 9 (Compl. ¶41).
• Accused Features: The complaint makes a general allegation that "Exemplary Defendant Products" infringe the patent (Compl. ¶39).

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

• Technology Synopsis: This patent, a parent to the ’420 Patent, describes a system for matching entities through an auction mechanism (Compl. ¶13; ’086 Patent, Abstract). The invention addresses the problem of optimizing pairings by defining profiles for a first entity (e.g., a caller) and a plurality of second entities (e.g., agents) and conducting an automated optimization based on the economic surplus and opportunity cost of a match (’086 Patent, Abstract; Fig. 7).
• Asserted Claims: The complaint does not specify claims, referring to an un-filed Exhibit 10 (Compl. ¶50).
• Accused Features: The complaint makes a general allegation that "Exemplary Defendant Products" infringe the patent (Compl. ¶45).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific product, method, or service by name. It refers generally to "Exemplary Defendant Products" and "Defendant products identified in the charts" (Compl. ¶15, ¶21).
• Functionality and Market Context: The complaint does not provide any factual description of the relevant technical features or functions of the accused instrumentalities. The allegations are conclusory, stating that the accused products "practice the technology claimed" by the patents-in-suit and "satisfy all elements" of the asserted claims (Compl. ¶17, ¶26). The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentalities.

IV. Analysis of Infringement Allegations

The complaint alleges infringement of all five patents-in-suit but incorporates its technical allegations by reference to external claim chart exhibits (Exhibits 6-10), which were not filed with the complaint (Compl. ¶17, ¶26, ¶35, ¶41, ¶50). The complaint's narrative states, in a conclusory manner, that the "Exemplary Defendant Products" practice the claimed technology and satisfy all elements of the asserted claims. Without access to the referenced exhibits or more detailed factual allegations in the complaint, a tabular claim chart summary cannot be constructed.

• Identified Points of Contention:
  • Scope Questions: A central question for claim construction may be whether standard customer service routing or online booking systems perform an "auction" or an "automated optimization with respect to an economic surplus" as those terms are used in the patents. For example, the dispute may turn on whether routing a customer to the next available agent can be construed as the multi-factor economic calculation involving "opportunity cost" as described in the ’420 Patent specification (col. 24:41-58).
  • Technical Questions: A primary evidentiary question will be what proof exists that Defendant’s systems perform the specific computational steps required by the claims. For example, it raises the question of what evidence the complaint provides that an accused system calculates "aggregate utility" (’748 Patent, cl. 1) rather than simply applying a set of predefined, sequential routing rules.

V. Key Claim Terms for Construction

• For the ’420 and ’086 Patents:
  • The Term: "automated optimization with respect to an economic surplus ... and an opportunity cost"
  • Context and Importance: This phrase captures the core of the asserted invention. Its construction will be critical to determining whether the claims cover conventional rules-based routing systems or are limited to systems that perform a specific, multi-variable economic calculation as described in the specification. Practitioners may focus on this term because it appears to require more than simple load balancing.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification discusses general goals like balancing competing demands and making "efficient use of call center resources," which a party could argue supports a broader definition of economic optimization (’420 Patent, col. 2:32-34).
    • Evidence for a Narrower Interpretation: The detailed description discloses specific mathematical formulae for a "cost-utility function" that explicitly includes terms for anticipated transaction value and opportunity costs, suggesting that a specific type of calculation is required (’420 Patent, col. 24:50-67).
• For the ’748, ’979, and ’253 Patents:
  • The Term: "maximizing an aggregate utility"
  • Context and Importance: This term is central to the infringement analysis for the ’748 Patent. The dispute may focus on whether the accused systems perform a true mathematical maximization of a calculated "utility" function for the entire system, or merely apply rules that are generally efficient.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The term "utility" is not explicitly defined in the claims and could be argued to encompass general business goals like customer satisfaction or speed of service (’748 Patent, Abstract).
    • Evidence for a Narrower Interpretation: The specification provides detailed flowcharts and formulae for optimizing a "cost-utility function," which includes factors such as "expected incremental utility of agent" and "expected incremental training utility," suggesting a specific, quantifiable metric is contemplated (’748 Patent, Fig. 2; col. 24:26-42, incorporating ’979 Patent).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748, ’979, and ’086 Patents. The allegations are based on Defendant’s alleged knowledge of the patents from the service of the complaint and its continued distribution of "product literature and website materials inducing end users" (Compl. ¶24-25, ¶33-34, ¶48-49).
• Willful Infringement: The complaint does not include a separate count for willful infringement. However, for three of the five patents, it alleges that service of the complaint provides "actual knowledge of infringement," which may form the basis for a claim of post-filing willfulness (Compl. ¶23, ¶32, ¶47). The prayer for relief seeks damages for "continuing or future infringement" (Compl. ¶ L).

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

• A central threshold issue will be one of pleading sufficiency: does the complaint, which relies entirely on conclusory allegations and un-filed external exhibits, provide sufficient factual detail to state a plausible claim for patent infringement under the Twombly/Iqbal standard?
• A core substantive issue will be one of definitional scope: can claim terms rooted in specific economic and auction theory, such as "automated optimization with respect to an economic surplus and an opportunity cost," be construed to cover the functionalities of large-scale commercial customer service and booking systems?
• A key evidentiary question will be one of technical operation: what evidence can Plaintiff produce to demonstrate that the accused systems actually perform the specific multi-factor computations and utility maximizations required by the claims, as opposed to applying more conventional, rules-based logic for routing communications?