People.ai: Reaffirmation That Automation Alone Is Insufficient

On April 7, the Federal Circuit handed down a non-precedential opinion on People.ai, Inc., v. Clari Inc., reaffirming the holding that automation or digitalization of a conventional method of organizing human activity does not bring the claims out of the realm of abstractness.

People.ai’s patents are directed to methods for “linking electronic activities,” such as “electronic mail, phone calls, [and] calendar event,” “to record objects included in one or more systems of record.” The goal of the claims is to filter out certain “electronic activities,” including emails, leaving only useful electronic activity for inclusion in a system of record.

The district court found all asserted claims invalid as patent ineligible under § 101 after applying the two-step Alice/Mayo test. In step one, the district court compared the asserted claims to “the activities of a prototypical corporate salesperson.” It explained that a corporate salesperson filters and matches communications as claimed in the asserted patents when they “discard the junk mail before updating the business files [they] maintain with relevant communications” and concluded that the asserted claims “do little else than recite a common commercial practice long performed by humans.” In step two, the district court found no inventive concept in the asserted claims. People.ai appealed.

Judges Newman, Chen, and Cunningham affirmed. The court reaffirmed that even though the automation might “result in life-altering consequences” or a “laudable” outcome, that improvement “does not render it any less abstract.” Indeed, early on in the opinion, the court viewed the patent through the lens of the invention “overcoming issues with manual data entry,” which set the tone for the rest of the opinion.

The court distinguished two cases where automation of a manual process was found not to be an abstract idea, including when the automated process differed from the manual process and provided “a specific means or method that improves the relevant technology” (McRO, Inc. v. Bandai Namco Games Am. Inc.) and when the claims were “directed to a non-abstract improvement in computer functionality.” (Finjan, Inc. v. Blue Coat Sys., Inc.)

The court found that the “automated objective rules” were, at their core, the same subjective rules a salesperson would use. Therefore, the focus of the claims was not on an improvement in computers as tools, but on certain independent abstract ideas that use computers as tools, citing FairWarning IP, LLC v. Iatric Sys. Inc.

In drafting patents involving automation and digitalization, it is crucial to discuss the fundamental differences in the patented approaches from the manual way of doing things, as well as specific steps and rules that are different from conventional methods. Framing the invention in terms of an improvement on existing technology will yield better results than emphasizing that the invention solves problems with manual approaches. Merely emphasizing efficiency benefits of the invention may not lead the claims to allowance.