Patent Armory Inc v. Northwestern Mutual LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Patent Armory Inc. (Canada)
  • Defendant: Northwestern Mutual LLC (Wisconsin)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 3:24-cv-00836, W.D. Wis., 11/22/2024
• Venue Allegations: Venue is alleged to be proper in the Western District of Wisconsin because the Defendant maintains an established place of business in the District.
• Core Dispute: Plaintiff alleges that Defendant’s internal systems for matching customers with agents infringe five patents related to intelligent communication routing and auction-based entity matching.
• Technical Context: The technology concerns advanced telecommunications and computer-telephony integration systems, particularly for optimizing resource allocation in environments like call centers.
• Key Procedural History: The asserted patents stem from a common family originating with a provisional application filed in 2003, indicating a long development and prosecution history for the underlying technology. The complaint does not allege any prior litigation or administrative proceedings involving these patents.

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 challenges in managing call centers, where traditional Automatic Call Distribution (ACD) systems use simplistic routing like first-come-first-served or basic skill matching, which can be inefficient (’420 Patent, col. 2:43-51). These methods fail to account for more complex variables, leading to problems like assigning over-skilled or under-skilled agents to calls (’420 Patent, col. 4:35-46).
• The Patented Solution: The invention proposes a system that treats the matching of callers (a first entity) to agents (a second entity) as a dynamic optimization problem solved via an auction-like mechanism (’420 Patent, Abstract). The system defines parameters for both callers and agents using "multivalued scalar data" and performs an "automated optimization" that considers not only the quality of the match but also the "economic surplus" generated and the "opportunity cost" of making an agent unavailable for other potential calls (’420 Patent, Abstract; col. 21:50-68).
• Technical Importance: This approach represents a shift from static, rule-based call routing to a dynamic, economic model that seeks to maximize the overall utility and efficiency of the entire system in real-time.

Key Claims at a Glance

• The complaint does not specify which claims are asserted, instead incorporating by reference an external exhibit that was not provided with the complaint (Compl. ¶¶17-18). Independent method claim 1 is representative of the patent’s core teachings.
• Essential elements of 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 representing respective characteristic parameters for each of the plurality of second entities.
  • 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 of the plurality of second entities for matching with an alternate first entity.
• 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 November 26, 2019)

The Invention Explained

• Problem Addressed: The patent addresses the same technical problem as the ’420 Patent: the inefficiency of conventional call center routing systems that do not perform holistic, utility-based optimizations (’748 Patent, col. 2:43-51).
• The Patented Solution: The invention is a communications routing system that determines an optimal routing path by maximizing an "aggregate utility" (’748 Patent, Abstract). It represents both communication sources (e.g., callers) and targets (e.g., agents) with sets of "predicted characteristics" and calculates the overall utility of potential pairings, allowing for a more intelligent and economically efficient match than prior art systems (’748 Patent, col. 24:27-42).
• Technical Importance: The system provides a framework for routing communications based on maximizing a global utility function, which can incorporate complex business goals beyond simple call-handling metrics.

Key Claims at a Glance

• The complaint does not specify which claims are asserted, instead incorporating by reference an external exhibit (Compl. ¶¶26-27). Independent method claim 11 is representative of the patent’s core method teachings.
• Essential elements of Claim 11:
  • A method for assigning communications, including receiving a plurality of communications for association.
  • Identifying a plurality of available resources for handling the communications, each resource having a limited quantitative capacity.
  • Calculating a respective score associated with each available resource based on its availability state.
  • Estimating an expected economic value for associating each communication with each resource, dependent on the score and a value function.
  • Assigning 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 April 4, 2006)

• Technology Synopsis: This patent, an early member of the asserted patent family, describes a telephony control system that intelligently routes calls in a call center (’979 Patent, Abstract). The system moves beyond simple queuing by using a processor to compute an optimal agent selection based on a database of agent skills and a classification of the incoming communication, directly controlling the routing of the call (’979 Patent, col. 18:41-67).
• Asserted Claims: The complaint does not specify asserted claims, incorporating them by reference to an unprovided exhibit (Compl. ¶¶32-33).
• Accused Features: The complaint alleges infringement by Defendant’s "Exemplary Defendant Products" but provides no specific details on their functionality (Compl. ¶30).

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

• Technology Synopsis: As a continuation of the '979 patent, this patent further details a system for intelligent call routing. It focuses on a combinatorial optimization to determine the optimal target for a communication based on the characteristics of both the communication and a plurality of potential targets, with the determination and routing performed within a common operating environment (’253 Patent, col. 33:1-11).
• Asserted Claims: The complaint does not specify asserted claims, incorporating them by reference to an unprovided exhibit (Compl. ¶¶38-39).
• Accused Features: The complaint alleges infringement by Defendant’s "Exemplary Defendant Products" but provides no specific details on their functionality (Compl. ¶36).

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

• Technology Synopsis: This patent, a direct ancestor of the '420 patent, describes a method for matching entities by performing an automated optimization based on an economic surplus and an opportunity cost (’086 Patent, Abstract). It introduces the concept of using an auction-like mechanism to resolve the matching of a first entity (e.g., a customer) with a second entity (e.g., a service provider) from a pool of available candidates.
• Asserted Claims: The complaint does not specify asserted claims, incorporating them by reference to an unprovided exhibit (Compl. ¶¶47-48).
• Accused Features: The complaint alleges infringement by Defendant’s "Exemplary Defendant Products" but provides no specific details on their functionality (Compl. ¶42).

III. The Accused Instrumentality

Product Identification

The complaint refers generally to "Exemplary Defendant Products" but does not identify any specific product or service by name (Compl. ¶15). It states that these products are identified in external exhibits (Exhibits 6-10), which were not filed with the complaint.

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific functionality or market context. It makes only conclusory allegations that the unidentified products "practice the technology claimed" by the patents-in-suit (Compl. ¶¶17, 26, 32, 38, 47). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

As the complaint incorporates claim chart exhibits by reference without providing them, the following tables summarize the infringement theory for a representative independent claim from each of the lead patents based on the patents' teachings and the general allegations.

'420 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: A central dispute may concern the term "auction". Does the process of matching a client with a financial advisor, as allegedly performed by Defendant, constitute an "auction" as contemplated by the patent, which also describes agents "bidding for a caller"? (’420 Patent, col. 21:50-54).
  • Technical Questions: What evidence does the complaint provide that Defendant's system performs the specific, two-part optimization required by the claim—calculating both an "economic surplus" and an "opportunity cost"—as opposed to a more conventional skill-based matching algorithm?

'748 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: Does Defendant's system calculate an "expected economic value" for each potential pairing, or does it use a non-economic, rules-based system (e.g., matching by geographic territory or product specialty) that would fall outside the claim scope?
  • Technical Questions: What is the specific algorithm used by Defendant to assign communications? Does it perform the multi-step process of scoring based on availability and then estimating economic value, or does it use a simpler, one-step matching logic?

V. Key Claim Terms for Construction

'420 Patent

• The Term: "auction"
• Context and Importance: This term appears in the title and is central to the patent's description of its solution. The infringement analysis may turn on whether Defendant’s system for matching clients to financial advisors can be characterized as conducting an "auction."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The abstract describes "matching entities in an auction," but the body of the patent extensively discusses "optimizing the selection of an agent" in a call center context, suggesting "auction" could be construed broadly to mean any competitive or optimized allocation of a resource (’420 Patent, col. 20:56-59).
  • Evidence for a Narrower Interpretation: The specification provides an explicit example where "agents bid for a caller" and may be "compensated on a commission basis," which suggests a more traditional structure involving bids and compensation that may not be present in Defendant's system (’420 Patent, col. 21:50-56).

'748 Patent

• The Term: "expected economic value"
• Context and Importance: This term is the basis for the assignment step in claim 11. Whether Defendant's system infringes will depend on whether its assignment logic is based on an "economic" valuation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification notes that business goals like "customer satisfaction" must be "converted and normalized into economic terms" for use in the optimization, suggesting that "economic value" is not limited to direct revenue or profit but can encompass a wide range of quantifiable business metrics (’748 Patent, col. 24:37-42).
  • Evidence for a Narrower Interpretation: The same passage also gives concrete examples of economic parameters such as "sales volume, profit, or the like," which could be used to argue that the term requires a direct financial calculation, not just a quality score (’748 Patent, col. 24:34-37).

VI. Other Allegations

• Indirect Infringement: For the ’748 and ’086 Patents, the complaint alleges induced infringement. The allegations are based on Defendant distributing "product literature and website materials inducing end users and others to use its products" in an infringing manner (Compl. ¶¶24, 45). The specific materials are referenced in external exhibits not provided with the complaint.
• Willful Infringement: For the ’748 and ’086 Patents, the complaint pleads "Actual Knowledge of Infringement" based solely on "The service of this Complaint" (Compl. ¶¶23, 44). This forms a basis for potential post-filing willfulness but does not allege any pre-suit knowledge.

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

• A core issue will be one of definitional scope: Can the term "auction," which is used throughout the '420 and '086 patents, be construed to cover an internal corporate system that matches clients to financial advisors, or does it require a more formal structure with explicit bidding?
• A key evidentiary question will be one of technical implementation: As the complaint lacks specific factual allegations regarding the accused products' operation, the case will likely depend on what discovery reveals about Defendant's systems. Does the evidence show that these systems perform the specific multi-factor, economic, and utility-based optimizations required by the claims, or do they employ more conventional, non-infringing logic for routing and assignments?