People.ai, Inc. v. SetSail Technologies, Inc.

Background

People.ai, Inc. brought a patent-infringement suit against SetSail Technologies, Inc. People.ai asserted five patents concerning software that uses machine learning to parse and analyze electronic activities, such as emails, and improve information entered into customer-relationship-management systems. SetSail moved to dismiss People.ai’s first amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to plausibly support a legal claim.

Direct Infringement

The court dismissed the direct-infringement claim involving the ’001 patent because People.ai withdrew that claim in a footnote to its opposition.

The court held that People.ai did not adequately plead direct infringement of the ’229 patent. The complaint alleged that SetSail’s software could identify email senders and recipients and match interactions to customer profiles, but it did not plausibly allege that the software generated and cross-referenced the two specific sets of candidate record objects required by the patent claims. The court rejected conclusory statements about how the software performed that matching.

The court also held that the allegations concerning the ’634 patent were insufficient. Although the complaint arguably alleged that SetSail’s software could identify timestamps and participant information, it did not provide a plausible factual basis for concluding that SetSail calculated a completion score using the particular combination of information required by the patent.

For the ’129 patent, the complaint did not explain how SetSail used a node-graph-generation system or a node-profile-matching policy, as required by the asserted claim. The court found that the allegations connecting SetSail’s general software descriptions to those claim elements were speculative and conclusory.

For the ’783 patent, the complaint alleged that SetSail created new contacts when they were not already in the system. But it did not allege how SetSail used a match score or matching threshold, which were elements of the asserted patent claim. The court therefore found those allegations insufficient.

Indirect Infringement

The court held that the induced-infringement claims failed because People.ai did not adequately allege direct infringement or facts showing that SetSail knew its acts constituted infringement and specifically intended to encourage infringement. Allegations that SetSail knew about the patents were not enough, and the complaint did not allege that the parties’ pre-suit communications included claim charts or another description of the alleged infringement.

The contributory-infringement claims also failed. People.ai did not adequately allege direct infringement or pre-suit knowledge, and it did not explain how SetSail’s software was a component of a larger infringing system. The court found that the allegations largely repeated the statutory language without providing supporting facts.

Import and Export Allegations

The court rejected People.ai’s allegations under 35 U.S.C. § 271(f) and § 271(g), which can impose patent liability for certain exports of components or imports of products made by a patented process. The court stated that software in the abstract could not be a component under § 271(f) or a manufacture under § 271(g), and found the complaint’s allegations about activities outside the United States conclusory and unsupported.

Disposition

For these reasons, the court granted SetSail’s motion to dismiss. The order did not state that the dismissal was with or without prejudice. People.ai may move for leave to file an amended complaint, and the order required that motion to be filed within fourteen days, accompanied by a proposed amended complaint and a redlined copy. People.ai was directed to plead its best case.