Patent Armory Inc v. Navy Federal Credit Union Foundation

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Navy Federal Credit Union Foundation (Virginia)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:25-cv-01370, E.D. Va., 08/19/2025
• Venue Allegations: Venue is alleged to be proper based on Defendant having an established place of business within the Eastern District of Virginia.
• Core Dispute: Plaintiff alleges that Defendant infringes two patents related to intelligent call center management, one directed to skill-based call routing and another to matching entities using an auction-based model.
• Technical Context: The technology concerns automated systems for routing customer communications (e.g., phone calls) to the most appropriate service agent, a critical function for large-scale customer service operations.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.

Case Timeline

Date	Event
2002-03-07	’979 Patent Priority Date
2003-03-07	’086 Patent Priority Date
2006-04-04	’979 Patent Issue Date
2010-03-08	Application leading to ’086 Patent filed
2016-09-27	’086 Patent Issue Date
2025-08-19	Complaint Filing Date

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

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

• Issued: April 4, 2006

The Invention Explained

• Problem Addressed: The patent's background section describes the inefficiencies of traditional call centers that use simple "first-come-first-served" routing, leading to mismatches like an "under-skilled agent" receiving a complex call or an "over-skilled agent" handling a simple one (’979 Patent, col. 4:26-56). These systems often rely on rigid, "static grouping" of agents, which cannot adapt to changing call patterns (’979 Patent, col. 4:57-62).
• The Patented Solution: The invention proposes an intelligent routing system integrated at a low level of the communications architecture to reduce latency (’979 Patent, col. 59:8-23). The system analyzes an incoming call to create a "call classification" and then consults agent profiles with "skill scores" to compute an "optimum agent selection" based on a cost-utility function, routing the call to the best-matched agent (’979 Patent, Abstract; Fig. 1).
• Technical Importance: The technology represents a shift from simple call queuing to dynamic, data-driven matching of individual customer needs with specific agent competencies, aiming to improve call center efficiency and customer satisfaction (’979 Patent, col. 2:17-28).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the ’979 Patent, incorporating by reference an exemplary claim chart that was not provided with the complaint (Compl. ¶¶ 12, 14). Independent claim 1 is representative of the invention's core system.
• Essential elements of Claim 1:
  • A communications control system comprising an input for receiving call classification information.
  • A data structure representing agent characteristics.
  • A processor for determining an optimum agent for a call based on a multivariate cost function that compares at least three agents.
  • The processor also controls the routing of the call to the determined agent.
  • The determining and routing functions are performed within a common operating environment.

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

• Issued: September 27, 2016

The Invention Explained

• Problem Addressed: The patent addresses the same general problem space as the ’979 Patent—inefficient call center management—but contemplates a more complex matching problem where simple skill-based routing may be insufficient, particularly when economic factors and opportunity costs are considered (’086 Patent, col. 64:50-68).
• The Patented Solution: This invention advances the concept by introducing an auction-based mechanism for matching entities. It defines "inferential targeting parameters" for a first entity (e.g., a caller) and "characteristic parameters" for a second entity (e.g., an agent) (’086 Patent, Abstract). A processor then performs an "automated optimization with respect to an economic surplus" that also considers the "opportunity cost" of assigning a particular agent to a call, thereby making that agent unavailable for other potential calls (’086 Patent, Abstract; col. 64:60-68).
• Technical Importance: This approach models the resource allocation problem within a call center as a micro-economic market, allowing for more dynamic and potentially more efficient matching by incorporating not just technical skill but also economic concepts like surplus and opportunity cost (’086 Patent, col. 49:45-56).

Key Claims at a Glance

• The complaint asserts "one or more claims" of the ’086 Patent, incorporating by reference an exemplary claim chart that was not provided with the complaint (Compl. ¶¶ 18, 23). Independent claim 1 is representative of the invention's core method.
• Essential elements of Claim 1:
  • A method for matching a first subset of entities with a second subset.
  • Storing in memory multivalued scalar data representing "inferential targeting parameters" for the first subset.
  • Storing in memory multivalued scalar data representing "characteristic parameters" for the second subset.
  • Performing an optimization using an automated processor with respect to "at least an economic surplus" of a match and an "opportunity cost" of the unavailability of the second subset for an alternate match.
  • Outputting a signal dependent on the optimization.

III. The Accused Instrumentality

Product Identification

The complaint does not specifically identify any accused product, method, or service. It refers generically to "Exemplary Defendant Products" that are purportedly identified in Exhibits 3 and 4 (Compl. ¶¶ 12, 18). These exhibits were not attached to the complaint document.

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality or market context of the accused instrumentality. It alleges, without factual support in the body of the complaint, that Defendant's employees "internally test and use these Exemplary Products" (Compl. ¶¶ 13, 19).

IV. Analysis of Infringement Allegations

The complaint alleges infringement of both the ’979 and ’086 patents by incorporating by reference claim charts included as Exhibits 3 and 4, respectively (Compl. ¶¶ 15, 24). As these exhibits were not provided with the complaint, a detailed claim chart summary cannot be constructed. The complaint's narrative asserts, in a conclusory manner, that the "Exemplary Defendant Products practice the technology claimed" and "satisfy all elements of the Exemplary... Patent Claims" (Compl. ¶¶ 14, 23). No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Pleading Sufficiency: A threshold legal question may be whether the complaint's strategy of incorporating un-provided exhibits, without including substantive factual allegations in the body of the complaint itself, meets the plausibility standard for pleading patent infringement established by Federal Circuit precedent.
  • Scope Questions: Assuming an accused system is identified, a likely point of contention for the ’979 Patent will be whether the accused system's routing logic performs an optimization based on a "multivariate cost function" as required by the claims. For the ’086 Patent, a key question will be whether the accused system performs an "optimization with respect to at least an economic surplus" and an "opportunity cost," and what level of economic modeling is required to meet those limitations.
  • Technical Questions: The dispute may turn on evidence of how the accused systems actually operate. A central question will be whether Defendant's internal systems, allegedly used for testing and operations (Compl. ¶¶ 13, 19), perform the specific, multi-step intelligent routing and auction-based matching methods claimed in the patents.

V. Key Claim Terms for Construction

• The Term: "multivariate cost function" (’979 Patent, Claim 1)
• Context and Importance: This term is the core of the intelligent routing engine in the ’979 Patent. Its construction will determine the scope of optimization methods covered by the claim. Practitioners may focus on this term because it distinguishes the invention from simple, single-factor routing rules.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the function can be based on optimizing for "greatest efficiency, lowest cost, or other optimized variable" (’979 Patent, col. 4:1-3) and includes business goals like "sales volume, profit, or the like" (’979 Patent, col. 65:42-45), which could support a broad definition covering various business-logic-driven optimizations.
  • Evidence for a Narrower Interpretation: The specification provides a specific mathematical formula for an exemplary cost function: "An=Max[Acn1∑(rsian,si)+Acn2]" (’979 Patent, col. 65:1-3). This disclosure of a specific formula could be used to argue that the term should be construed more narrowly to require a similar quantitative, weighted-sum model.
• The Term: "optimization with respect to at least an economic surplus... and an opportunity cost" (’086 Patent, Claim 1)
• Context and Importance: This phrase defines the novel auction-based matching mechanism of the ’086 Patent. The definition of these economic concepts will be critical to determining infringement, as it separates the invention from mere technical skill-matching.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The Abstract describes the invention broadly as performing an "automated optimization with respect to an economic surplus" and considering "an opportunity cost of the unavailability of the... second entities for matching with an alternate first entity." This language could support a construction that covers any system balancing a match's direct value against the cost of forgoing other potential matches.
  • Evidence for a Narrower Interpretation: The specification describes embodiments in the context of an "auction" where agents "bid for a caller" (’086 Patent, col. 61:53-62). This could support an argument that the claimed "optimization" requires the implementation of a formal, market-based auction mechanism, rather than any general cost-benefit analysis.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’086 Patent, asserting that Defendant has knowledge via the complaint itself and induces infringement by distributing "product literature and website materials" that instruct users on an infringing use (Compl. ¶¶ 21-22). The specific materials are purportedly referenced in the un-provided Exhibit 4 (Compl. ¶ 21).
• Willful Infringement: The complaint does not contain a separate count for willfulness but alleges that service of the complaint constitutes "Actual Knowledge of Infringement" of the ’086 Patent and that Defendant's infringement continues despite this knowledge (Compl. ¶¶ 20-21). This allegation forms a basis for a claim of post-filing willful infringement. The prayer for relief also requests that the case be declared "exceptional" under 35 U.S.C. § 285 (Compl. Prayer ¶H.i).

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

• A central threshold question will be one of procedural sufficiency: Does a complaint that provides no factual detail regarding the accused product or its operation, instead relying entirely on the incorporation of un-provided exhibits, state a plausible claim for patent infringement sufficient to proceed to discovery?
• A core issue will be one of definitional scope: How broadly will the court construe the central claim terms "multivariate cost function" (’979 Patent) and "economic surplus... and an opportunity cost" (’086 Patent)? The outcome of claim construction will likely determine whether the patents cover a wide range of modern, logic-based routing systems or are limited to the specific mathematical and auction-based embodiments disclosed.
• A key evidentiary question will concern the nature of infringing "use": Assuming the case proceeds, the dispute will focus on what specific internal systems the Defendant operates and whether their functionality, as used or tested by employees, meets every limitation of the asserted claims in the patents-in-suit.