People.ai, Inc. v. Clari Inc.

Background

People.ai asserted seven patents against Clari and SetSail. The patents concern business-analytics software that processes electronic activities, such as emails and phone calls, and associates them with customer-relationship-management records. Three patents—the ’129, ’229, and ’634 patents—were asserted against both defendants. Clari faced claims involving all seven patents; SetSail faced claims involving the ’129, ’229, and ’634 patents.

Clari and SetSail moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that the asserted claims were not eligible for patent protection under 35 U.S.C. § 101. A Rule 12(c) motion can be granted when the pleadings show that no material factual dispute remains and the moving party is entitled to judgment as a matter of law. The court applied the two-part framework from Alice Corp. v. CLS Bank: first, whether the claims are directed to an abstract idea; and second, whether they contain an inventive concept that transforms that idea into a patent-eligible invention.

Analysis

The court considered representative claims and related claims for each patent.

- ’129 patent: Representative claim 20 covered maintaining data profiles, extracting information from electronic activities, matching those activities to profiles and business records based on senders and recipients, and storing the associations. The court found this to be the abstract idea of collecting data, recognizing information within it, and storing the recognized information. It compared the claimed process to a salesperson sorting communications and filing them in business records. The claims used generic software and did not require storing associations outside the customer-relationship-management system. The court held the asserted claims ineligible. - ’106 patent: Representative claim 19 was substantially the same as claim 20 of the ’129 patent. The court therefore found the representative claim and the related asserted claims directed to an abstract idea and ineligible under Section 101. - ’229 patent: Representative claim 19 covered using rules based on email senders and recipients to create candidate groups, cross-reference those groups, match an email to a business record, and store the association. The court found this to be a common business practice performed with generic computer operations. It also rejected People.ai’s argument that additional details, including consideration of a team field, changed the result. - ’783 patent: Representative claim 12 covered calculating a match score to decide whether an electronic activity matched an existing record and, if not, generating a new record. The court found that the claim described the desired result without explaining how the match score would actually be calculated. It held that the claim was directed to an abstract idea and lacked an inventive concept. - ’345 patent: Representative claim 11 covered filtering electronic activities using keyword, pattern, or logic-based rules before matching them to business records. The court found this to be generic data processing analogous to a salesperson discarding irrelevant mail before updating business files. The claim’s direction to store the association in the customer-relationship-management system did not supply the inventive concept People.ai proposed. - ’634 patent: Representative claim 10 covered using electronic activities, participant information, and timestamps to calculate a score predicting whether a business event would be completed. The court found this to be a longstanding business practice and held that the claim merely used generic hardware and software to perform it. - ’132 patent: Representative claim 12 covered predicting whether a process would be completed within a particular time based on electronic activities, participant roles, and the process stage. The court found this to be another longstanding commercial practice and held that the additional stage information and computer processing did not create an inventive concept.

Across the patents, the court rejected People.ai’s arguments that the claims improved efficiency, reduced computer resources, avoided application-programming-interface limits, or stored information separately from the customer-relationship-management system. The court concluded that these features either were not required by the claim language or amounted to ordinary computer functions such as caching, remote processing, or faster data analysis. The court also declined to consider a declaration submitted by People.ai’s chief executive because the Rule 12(c) analysis was limited to the pleadings.

Ruling

Judge William Alsup granted the motions for judgment on the pleadings. The court held that the asserted claims of the ’129, ’106, ’229, ’783, ’345, ’634, and ’132 patents were invalid as patent-ineligible subject matter under Section 101.