Patent Armory Inc v. adidas America Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Adidas America Inc. (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 6:24-cv-00173, W.D. Tex., 04/05/2024
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business within the Western District of Texas.
• Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services infringe five patents related to intelligent communication routing and auction-based systems for matching entities.
• Technical Context: The patents address technologies for optimizing resource allocation in communications systems, such as intelligently routing incoming calls to the most suitable agents in a call center.
• Key Procedural History: The complaint does not allege any prior litigation, licensing history, or post-grant proceedings involving the patents-in-suit. The asserted patents claim priority to applications dating back to 2002 and 2003, indicating a long history of prosecution before the U.S. Patent and Trademark Office.

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: The patent’s background section describes inefficiencies in traditional call centers, where Automatic Call Distribution (ACD) systems use simple rules like "first-come-first-served" or "longest-idle-agent" for routing calls (Compl. Ex. 1, ’420 Patent, col. 2:43-52, 3:10-21). This can lead to mismatches, such as routing a customer to an agent who is under-skilled or over-skilled for the particular issue, reducing transactional throughput (’420 Patent, col. 4:35-50).
• The Patented Solution: The invention proposes a system that treats the matching of an incoming communication (a "first entity") to an available agent (a "second entity") as a type of auction (’420 Patent, col. 11:24-29). The system performs an "automated optimization" to find the best match, considering not just skills but also an "economic surplus" of the match and the "opportunity cost" of making a particular agent unavailable for other potential incoming communications (’420 Patent, Abstract). This allows for a more sophisticated, economically-driven approach to call routing than traditional methods.
• Technical Importance: The technology represents a shift from static, rule-based call routing to a dynamic, optimization-based system designed to maximize the overall economic efficiency of a call center (’420 Patent, col. 21:4-22).

Key Claims at a Glance

• The complaint does not identify specific asserted claims, instead referring to unprovided claim charts in Exhibit 6 (Compl. ¶¶15, 17-18). Independent claim 1 is representative of the invention’s core method.
• Essential Elements of Independent Claim 1:
  • A method of pairing a request with a partner from a plurality of available partners.
  • Estimating at least one content-specific or requestor-specific characteristic associated with the request.
  • Determining a set of available partners, each having at least one respective partner characteristic.
  • Evaluating, with an automated processor, pairings of the request with different available partners according to an evaluator for valuing the pairings.
  • The evaluator comprises at least one of a probabilistic function, a hierarchical Markov model, Bayesian logic, and a neural network.
  • Generating a control signal, by the processor, selectively dependent on the evaluating step.
• The complaint reserves the right to assert additional 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 problem as the ’420 Patent: the limitations of traditional, non-deterministic operating systems and simple rule sets in managing real-time communications efficiently in a call center environment (Compl. Ex. 2, ’748 Patent, col. 1:50-2:49).
• The Patented Solution: The invention is a communications routing system that moves beyond simple matching to maximize an "aggregate utility." It does this by representing both communication sources (e.g., callers) and targets (e.g., agents) with "predicted characteristics," each having an "economic utility." The system then determines an optimal routing between the sources and targets by maximizing the total utility across all pairings (’748 Patent, Abstract). Figure 1 illustrates a process flow where the system decides between standard skill-based routing and a more complex, long-term cost-utility optimization based on call center capacity (’748 Patent, Fig. 1).
• Technical Importance: This approach allows a communications system to perform a global optimization across multiple concurrent communication requests, rather than evaluating each request in isolation, to improve long-term operational efficiency (’748 Patent, col. 27:8-14).

Key Claims at a Glance

• The complaint does not identify specific asserted claims, instead referring to unprovided claim charts in Exhibit 7 (Compl. ¶¶21, 26-27). Independent claim 1 is representative of the invention’s core system.
• Essential Elements of Independent Claim 1:
  • A system for assigning communications, comprising a processor and memory.
  • The system is configured to receive a plurality of communications.
  • Identify a plurality of available resources for association.
  • Each resource has a limited quantitative capacity for association and an availability state.
  • Calculate a score for each resource based on its availability state.
  • Estimate an expected economic value for associating each communication with each resource, dependent on the score and a value function.
  • Assign each communication to a resource based on the estimated expected economic value.
• The complaint reserves the right to assert additional claims (Compl. ¶21).

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

• Patent Identification: U.S. Patent No. 7,023,979, “Telephony control system with intelligent call routing,” Issued Apr. 4, 2006 (Compl. ¶11).
• Technology Synopsis: This patent describes a communications management system, such as for a call center, that uses a database of skill weights and agent skill scores to compute an optimal agent selection for an incoming communication. The system directly controls the routing of the communication based on this computation (’979 Patent, Abstract).
• Asserted Claims: The complaint does not specify asserted claims, referring to an unprovided Exhibit 8 (Compl. ¶¶30, 32-33).
• Accused Features: The complaint does not specify which product features are accused of infringing this patent (Compl. ¶30).

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

• Patent Identification: U.S. Patent No. 7,269,253, “Telephony control system with intelligent call routing,” Issued Sep. 11, 2007 (Compl. ¶12).
• Technology Synopsis: As a continuation of the application leading to the ’979 Patent, this patent covers similar subject matter. It claims a system and method where characteristics of communications and at least three potential targets are stored, and an optimum target is determined via a combinatorial optimization, preferably including a cost-benefit optimization (’253 Patent, Abstract).
• Asserted Claims: The complaint does not specify asserted claims, referring to an unprovided Exhibit 9 (Compl. ¶¶36, 38-39).
• Accused Features: The complaint does not specify which product features are accused of infringing this patent (Compl. ¶36).

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

• Patent Identification: U.S. Patent No. 9,456,086, “Method and system for matching entities in an auction,” Issued Sep. 27, 2016 (Compl. ¶13).
• Technology Synopsis: This patent relates to the same technology family as the ’420 Patent. It describes a method for matching a first entity with a second entity using an "automated optimization" that considers the economic surplus of a potential match as well as the opportunity cost of making that second entity unavailable for other potential matches (’086 Patent, Abstract).
• Asserted Claims: The complaint does not specify asserted claims, referring to an unprovided Exhibit 10 (Compl. ¶¶42, 47-48).
• Accused Features: The complaint does not specify which product features are accused of infringing this patent (Compl. ¶42).

III. The Accused Instrumentality

• Product Identification: The complaint does not identify any specific accused product, method, or service by name (Compl. ¶¶15, 21, 30, 36, 42). It refers generally to “the Defendant products identified in the charts” and “Exemplary Defendant Products,” but the referenced charts (Exhibits 6-10) were not filed with the complaint (Compl. ¶¶17, 26, 32, 38, 47).
• Functionality and Market Context: The complaint does not provide sufficient detail for analysis of the functionality or market context of any accused instrumentality.
• No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint’s infringement allegations are conclusory and rely entirely on Exhibits 6, 7, 8, 9, and 10, which are incorporated by reference but were not filed with the public docket (Compl. ¶¶18, 27, 33, 39, 48). The complaint asserts that these unprovided exhibits contain charts that demonstrate how the “Exemplary Defendant Products practice the technology claimed” and “satisfy all elements of the Exemplary... Patent Claims” (e.g., Compl. ¶¶17, 26). Without these exhibits, a detailed analysis of the plaintiff’s infringement theory is not possible from the complaint.

• Identified Points of Contention:
  • Pleading Sufficiency: A threshold issue for the court may be whether the complaint, which fails to identify any accused product or provide the claim charts it relies upon, meets the pleading standards established by Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal. The allegations may be challenged as failing to provide the defendant with fair notice of the basis for the claims against it.
  • Technological Applicability: Should the case proceed, a central point of contention may be the applicability of patents rooted in the technical field of call centers and telephony to the defendant’s business in apparel and e-commerce. The analysis will question whether concepts like "call routing," "agents," and "economic surplus" in a call center context can be read to cover digital customer service interactions, website operations, or other aspects of the defendant's business.
  • Functional Mismatch: Infringement analysis will likely focus on whether the accused systems actually perform the computationally-intensive steps required by the claims, such as an "automated optimization" or "maximizing an aggregate utility." A key question will be whether the defendant’s systems perform functions that are technically equivalent to these claimed methods, or if there is a fundamental mismatch in operation.

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 inventive concept of the ’420 and ’086 Patents. The dispute will likely turn on whether the accused system performs a true "optimization" and whether it considers an "economic surplus" as described in the patent. Practitioners may focus on this term because it appears to require a specific, complex computational process, not merely a simple sorting or filtering rule.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification discusses the concept in terms of general "cost-utility" functions and optimizing a "cost-benefit outcome," which could support a construction that is not limited to specific monetary calculations (e.g., ’420 Patent, col. 22:4-15; Fig. 4).
  • Evidence for a Narrower Interpretation: The specification repeatedly frames the problem and solution in the specific context of call centers, using examples like agent salaries, training costs, and sales commissions as inputs to the cost function, which could support a narrower construction limited to that technological environment (’420 Patent, col. 24:1-20).

• The Term: "maximizing an aggregate utility" (’748 Patent, Abstract)

• Context and Importance: This term, appearing in the abstract and described in the claims of the ’748 Patent, defines the goal of the claimed routing system. The infringement question will likely depend on whether the accused system performs a genuine "maximization" process across multiple potential pairings, or simply applies a set of preferential rules.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification describes utility in general terms, such as balancing customer satisfaction with efficiency, which could support a broad interpretation not tied to a specific mathematical formula (’748 Patent, col. 2:28-34).
  • Evidence for a Narrower Interpretation: The patent provides a specific formula, An=Max({[Acn1∑(rs₁ans₁)+Acn2]+Bcn}+Ccn)+Dcn>, as one representation of the optimization, including factors like agent cost, anticipated value of the transaction, and opportunity cost. This detailed embodiment could be used to argue for a narrower construction requiring these specific types of economic inputs (’748 Patent, col. 24:51-62).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the ’748 and ’086 Patents (Compl. ¶¶25, 46). The allegations state that the 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, 45). The complaint notes that its unprovided Exhibits 7 and 10 extensively reference these materials (Compl. ¶¶24, 45).
• Willful Infringement: The complaint does not contain an explicit allegation of "willful" infringement. However, for the ’748 and ’086 Patents, it alleges "Actual Knowledge of Infringement" based on "The service of this Complaint, in conjunction with the attached claim charts" (Compl. ¶¶23, 44). This allegation serves to put the defendant on notice for the purpose of potential post-filing willful infringement damages. No facts supporting pre-suit knowledge are alleged.

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

This case presents several fundamental, open questions for the court that must be resolved before any substantive technical analysis can occur.

• A threshold issue will be one of pleading sufficiency: does the complaint, by failing to identify any accused product and omitting the exhibits upon which its infringement allegations wholly rely, provide the defendant with fair notice as required by federal pleading standards?
• A core substantive issue will be one of technological scope: can the patent claims, which are described and defined in the specific technical context of telephony and optimizing agent routing in call centers, be construed to apply to the defendant’s fundamentally different business of e-commerce and apparel retail?
• A key evidentiary question will be one of functional operation: what evidence can be presented to show that the defendant’s customer service or e-commerce systems perform the specific, computationally complex steps of "automated optimization" or "maximizing an aggregate utility" as required by the asserted claims, or is there a fundamental mismatch in their technical operation?