Liberty Mutual Insurance Co.v.Progressive Casualty Insurance Co.

Patent Trial and Appeal Board

Mar 13, 2014

10764076 (P.T.A.B. Mar. 13, 2014)

Trials@uspto.gov Paper 53
571-272-7822 Entered: March 13, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

LIBERTY MUTUAL INSURANCE CO.
Petitioner

v.

PROGRESSIVE CASUALTY INSURANCE CO.
Patent Owner
____________

Case CBM2013-00004
Patent 8,090,598
____________

Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
Administrative Patent Judges.

CHANG, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 328(a) and 37 C.F.R. § 42.73

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I. INTRODUCTION
Liberty Mutual Insurance Company (“Liberty”) filed a petition on
October 15, 2012, requesting a covered business method patent review of
U.S. Patent No. 8,090,598 (“the ’598 patent,” Ex. 1001) pursuant to
section 18(a) of the Leahy-Smith America Invents Act (“AIA”).1 Paper 4
(“Pet.”). Progressive Casualty Insurance Company (“Progressive”) filed a
patent owner preliminary response. Paper 9 (“Prelim. Resp.”). Taking into
account Progressive’s preliminary response, the Board determined that the
information presented in Liberty’s petition demonstrated that it was more
likely than not that the challenged claims are unpatentable. Pursuant to
35 U.S.C. § 324, the Board instituted this trial on March 15, 2013, as to
claims 1-78 of the ’598 patent. Paper 11 (“Dec.”).
During the trial, Progressive filed a patent owner response (Paper 19,
“PO Resp.”), and Liberty filed a reply to the patent owner response
(Paper 25, “Reply”). An oral hearing was held on November 13, 2013.2
The Board has jurisdiction under 35 U.S.C. § 6(c). This decision is
a final written decision under 35 U.S.C. § 328(a) as to the patentability of
claims 1-78 of the ’598 patent. We hold that claims 1-78 of the ’598 patent
are unpatentable under 35 U.S.C. § 102.

1 Pub. L. No. 112-29, 125 Stat. 284, 329 (2011).
2 A transcript of the oral hearing is entered in the record as Paper 52 (“Tr.”).
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A. Related Proceeding
Liberty indicates that the ’598 patent was asserted against it in
Progressive Casualty Ins. Co. v. Safeco Ins. Co. of Ill., Case No. 1:10-cv-
01370 (N.D. Ohio). Pet. 7.
B. The ’598 Patent
The ’598 patent relates to a system for monitoring and communicating
operational characteristics and operator actions (e.g., speeds driven) relating
to a unit of risk (e.g., a motor vehicle) to determine the insurance cost for the
unit of risk. Ex. 1001, 1:20-35. Figure 5 of the ’598 patent, reproduced
below, depicts an embodiment of the claimed invention of the ’598 patent:

As shown in Figure 5 of the ’598 patent, unit of risk 200 has a data
storage, data process logic, and an onboard device that monitors and records
sensor data and trigger events. Id. at 7:27-32; 12:31-36; fig. 3. All relevant
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data is stored in data storage device 518. Id. at 12:61-62. Billing or
estimating algorithm 530 accesses the data or events to generate a cost of
insurance for the unit of risk. Id. at 13:5-8. As shown in Figure 5, the
insurer’s system also provides web server 220 to allow a customer to access
via Internet 218 the relevant sensor data and event data associated with the
customer. Id. at 13:24-29; figs 10-17. In particular, the insurer’s system
provides prospective on-line interface 550 and interface 552 for reporting
acquired data. Id. at 13:30-32.
C. Representative Claim
Of the challenged claims, claims 1, 31, 32, 33, 48, and 78 are
independent claims. Claims 2-30 depend from claim 1, claims 34-47 depend
from claim 33, and claims 49-77 depend from claim 48.
Claim 1 is representative:
1. A risk management system comprising:
a server receiver configured to wirelessly receive
selected onboard vehicle data monitored by an in-vehicle data
monitoring device within a vehicle;
a network server system coupled to the server receiver
that provides an interface having functionality configured to
establish relationships between the selected onboard vehicle
data and levels of risk in a usage based insurance system;
a database that stores relationship data indicating the
relationships established between the selected onboard vehicle
data relating to one or more users and an insured's monitored
vehicle data, where the relationship data identifies, for an
insured or other selected users, relationships between relative
levels of risk and the selected onboard vehicle data; and
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an interface module configured to search the database
for a risk assessment of vehicle data, where the interface
module is responsive to a request from a database user by
using the relationship data and the selected onboard vehicle
data to identify the level of risk;
where the interface module is further configured to be
responsive to a request to quantify driver behavior by
processing the selected onboard vehicle data to render a driver
safety score, where the driver safety score is characterized as a
level of risk associated with insuring a selected operator or a
vehicle.
Ex. 1001, 28: 23-49 (emphases added).
D. Covered Business Method Patent
Upon consideration of Liberty’s contentions in the petition and
Progressive’s arguments in the preliminary response, the Board, in the
Decision on Institution, determined that the ’598 patent is a covered business
method patent as defined in section 18(a)(1)(E) of the AIA and 37 C.F.R.
§ 42.301, because at least one claim of the ’598 patent is directed to a
covered business method. Dec. 3-9. Accordingly, the Board concluded that
the ’598 patent is eligible for a covered business method patent review. Id.
In its patent owner response, Progressive argues that the Board must
conduct a claim-by-claim analysis and determine that every challenged
claim is directed to a covered business method, before it is authorized, under
section 18(a)(1)(E) of the AIA, to review all of the challenged claims.
PO Resp. 2-3, n.1. Progressive asserts that the Board exceeded its statutory
authority by instituting “review of any patent claim which the Board has not
determined to be directed to a covered business method.” Id.
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Progressive’s argument is based on an erroneous statutory
construction that interprets the word “patent” in the statutory provision on
what is subject to review as “claim.” We decline to adopt such an
interpretation.
As in any statutory construction analysis, we begin with the language
of the statute. In re Swanson, 540 F.3d 1368, 1374-75 (Fed. Cir. 2008);
Duncan v. Walker, 533 U.S. 167, 172 (2001); Crandon v. United States, 494
U.S. 152, 158 (1990). “In the absence of a clearly expressed legislative
intention to the contrary, the language of the statute itself must ordinarily be
regarded as conclusive.” United States v. James, 478 U.S. 597, 606 (1986)
(internal quotation marks and citations omitted). “It is well settled law that
the plain and unambiguous meaning of the words used by Congress prevails
in the absence of a clearly expressed legislative intent to the contrary.”
Hoechst AG v. Quigg, 917 F.2d 522, 526 (Fed. Cir. 1990).
Section 18(d)(1) of the AIA defines the term “covered business
method patent” to mean (emphases added):
[A] patent that claims a method or corresponding apparatus for
performing data processing or other operations used in the
practice, administration, or management of a financial product
or service, except that the term does not include patents for
technological inventions.
If Congress intended to limit the availability of the covered business
method patent review on a claim-by-claim basis, as urged by Progressive, it
could have used the term “claim” rather than “patent.” Notably, when
specifying the subject matter for review, Congress could have used the
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language “a claim that is directed to a method or corresponding apparatus”
rather than “a patent that claims a method or corresponding apparatus.”
Section 18(d)(1) of the AIA sets forth a single threshold based on just one
claim—the satisfaction of which qualifies an entire patent as eligible for
review—rather than a test that must be applied on a claim-by-claim basis to
justify review of each claim.3 Therefore, a patent is eligible for a covered
business method patent review if the subject matter of at least one claim is
directed to a covered business method. Nothing in the legislative history, or
other parts of the AIA, requires us to deviate from the plain meaning of the
definition set forth in section 18(d)(1) of the AIA, as proposed by
Progressive. Moreover, Progressive has not identified any statutory
provision or legislative history that requires “each” claim for which trial is
instituted to meet the test for a covered business method patent. Further,
Progressive provides no persuasive explanation as to why the Board’s
analysis was incorrect. PO Resp. 2-3, n. 1.
For the foregoing reasons, we disagree with Progressive that the
Board exceeded its statutory authority by instituting a covered business
method patent review as to claims 1-31 and 33-78 of the ’598 patent.

3 See also Transitional Program for Covered Business Method Patents –
Definitions of Covered Business Method Patent and Technological
Invention; Final Rule, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012).
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E. Prior Art Relied Upon
Liberty relies upon the following prior art references:
Burge U.S. Pub. App. 2002/111725 Aug. 15, 2002 (Ex. 1003)
Nakagawa U.S. Pub. App. 2002/0128882 Sept. 12, 2002 (Ex. 1004)
Herrod GB 2 286 369 A Aug. 16, 1995 (Ex. 1005)
Paul Dorweiler, Notes on Exposure and Premium Bases in XVI,
Part II, PROCEEDINGS OF THE CASUALTY ACTUARIAL SOCIETY 319-343
(1930) (“Dorweiler”) (Ex. 1006).
F. Grounds of Unpatentability
The Board instituted the instant covered business method patent
review based on the following grounds of unpatentability:
Claims Basis References
1-78 § 102 Burge
1-78 § 102 Nakagawa
16, 17, 63, and 64 § 103 Burge and Herrod
47 § 103 Nakagawa and Herrod

II. ANALYSIS
A. Claim Construction
In a covered business method patent review, claim terms are given
their broadest reasonable construction in light of the specification of the
patent in which they appear. 37 C.F.R. § 42.300(b). Under the broadest
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reasonable construction standard, claim terms are given their ordinary and
customary meaning as would be understood by one of ordinary skill in the
art in the context of the entire disclosure. In re Translogic Tech. Inc., 504
F.3d 1249, 1257 (Fed. Cir. 2007). An inventor may rebut that presumption
by providing a definition of the term in the specification with reasonable
clarity, deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480
(Fed. Cir. 1994). In the absence of such a definition, limitations are not to
be read from the specification into the claims. In re Van Geuns, 988 F.2d
1181, 1184 (Fed. Cir. 1993).
1. “rating factor” (claim 40)
The claim term “rating factor” is recited in claim 40, which states
“where the driver safety score comprises a rating factor that quantifies an
insurable risk.” Ex. 1001, 32:1-3. Liberty states that under the rule of
broadest reasonable interpretation, “rating factor” means “a calculated
insurance risk value such as a safety score or a usage discount.” Pet. 21.
In support of that assertion, Liberty points to portions of the ’598 patent.
Pet. 21 (citing Ex. 1001, 22:18-22 (“In the exemplary embodiment, the
discount section 818 of the operational summary 814 indicates that a total
discount 852 is based upon a calculation including an upload bonus 854,
a rating factor, such as a safety score 856 and a usage discount 858.”); and
23:9-13 (“The usage discount detail section 1018 indicates that the usage
discount 1022 is a function of a starting discount 1024, and rating factors,
such as, a daytime mileage adjustment 1026, a nighttime mileage adjustment
1028 and a high risk mileage adjustment 1030.”)).
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In the Decision on Institution, we determined that Liberty’s
interpretation is consistent with the specification of the ’598 patent, and
adopted Liberty’s proposed construction as the broadest reasonable
interpretation, but added the clarification that an insurance risk value would
be a value that reflects an associated level of insurance risk and, therefore,
also a corresponding insurance premium. Dec. 15-16. Progressive agrees
with our claim construction. PO Resp. 10. We apply the same construction
in this decision.
2. “driver safety score” (claims 1-32 and 34-42, 48-78)
The claim term “driver safety score” is recited in all of the
independent claims, except claim 33. For instance, claim 1 recites “where
the interface module is further configured to be responsive to a request to
quantify driver behavior by processing the selected onboard vehicle data to
render a driver safety score, where the driver safety score is characterized as
a level of risk associated with insuring a selected operator or a vehicle.”
Ex. 1001, 28:44-49. Liberty construes “driver safety score” to mean “a
calculated insurance risk value associated with driver safety.” Pet. 21-22.
In support of that assertion, Liberty directs our attention to portions of the
specification of the ’598 patent. Id. (citing Ex. 1001, 22:18-22, 22:52-55
(“The safety score explanation section 918 indicates the safety score is a
function 920 of an excessive speed factor 922, an aggressive acceleration
factor 924 and an excessive braking factor 926.”); and 23:1-3 (“The safety
score explanation window 918 indicates that the safety score is a weighted
function 920 of the factors 922, 924, 926.”)).
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The specification of the ’598 patent is reasonably clear that the driver
safety score is a calculated value. Notably, Figure 9 of the ’598 patent,
reproduced below, illustrates a display screen summarizing the data
regarding operational aspects of a vehicle with information related to a cost
of insurance (oval added for emphasis). Ex. 1001, 5:38-40.

Figure 9 depicts a safety score explanation section (918) which indicates the
safety score is a weighted function (920) (“[[1.99 * 50%] + [0.80 * 25%] +
[1.48 * 25%]] = 1.56 (safety score)”) of an excessive speed factor (922), an
aggressive acceleration factor (924) and an excessive braking factor (926).
Ex. 1001, 22:48-49, 22:52-55, and 23:1-3.
In the Decision on Institution, we adopted Liberty’s construction by
interpreting the claim term “driver safety score” as “a calculated insurance
risk value associated with driver safety” because it is consistent with the
specification of the ’598 patent. Dec. 16-18. Progressive agrees with our
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claim construction. PO Resp. 10. We apply the same construction in this
decision. We also observe that a driver safety score is merely an example of
a rating factor because, as discussed above, the claim term “rating factor” is
construed as “a calculated insurance risk value such as a safety score or a
usage discount.”
3. “driver safety data” (claim 33 and 43-47)
Claim 33 recites “an interface module configured to process the
database for a risk assessment of vehicle data, where the interface module is
responsive to a request to quantify driver behavior by processing the
monitored vehicle data to generate driver safety data that characterizes the
level of risk associated with insuring a selected operator or a vehicle.”
Ex. 1001, 31:43-49.
Liberty construes “driver safety data” to have the same meaning as
“driver safety score,” namely “a calculated insurance risk value associated
with driver safety.” Pet. 21. In its patent owner preliminary response,
Progressive counters that the terms “driver safety score” and “driver safety
data” are not identical. According to Progressive, “driver safety data” can
constitute data other than a “driver safety score.” Prel. Resp. 30 (citing
claim 34). We agree with Progressive.
Claim 34 depends from claim 33 and recites “where the driver safety
data comprises a driver safety score.” Ex. 1001, 31:50-51. It is clear from
that claim language that “driver safety data” has a broader scope than “driver
safety score.”

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Accordingly, we construe the claim term “driver safety data” broadly,
but reasonably as encompassing “driver safety score” and other data
associated with driver safety.
4. “insurance rating” (see, e.g., claims 48 and 78)
Liberty construes the claim term “insurance rating” to mean “a/some
value/cost used to determine an overall cost associated with insurance of the
vehicle.” Pet. 22. Progressive presents no opposition to that interpretation.
PO Resp. 10-13. We agree with Liberty’s construction as it is reasonable
and broad, as well as consistent with the specification of the ’598 patent.
5. “level of risk” (claims 1, 31-33, 42, and 78 )
Liberty, in its petition, did not proffer a construction for the claim
term “level of risk.” Progressive, in its patent owner preliminary response,
also did not submit a construction for that term. In the Decision on
Institution, we did not construe the claim term expressly.
However, Progressive, in its patent owner response, asserts that a
person with ordinary skilled in the art would have understood that the claim
term “level of risk” is the level of risk associated with an actuarial class, and
the level of risk is assessed with respect to selected onboard vehicle data.
PO Resp. 12 (citing Ex. 2011 ¶ 34). Progressive also argues that the claim
term “level of risk” does not require a level of risk to be “assigned based at
least in part on the indicated level of willingness of the driver to allow at
least one aspect to be recorded.” Id. at 10. According to Progressive, “the
’598 patent contemplates that a level of risk may be assessed on the basis of
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any of a variety risk characteristics,” and “associates an actuarial class with a
level of risk.” Id. at 11-12 (citing Ex. 1001: 1:53-55; 2:37-46). Progressive
further asserts that in a usage-based insurance, placement of an insured
establishes a relationship between the onboard vehicle data and a level of
risk (e.g., a “high risk category or actuarial tier”). Id. at 12.
Liberty counters that assigning a level of risk in the context of the
’598 patent is more specific. Reply 3 (citing Ex. 1001, col. 14-16, 21-22,
Fig. 7, 726). Liberty argues that the ’598 patent purportedly solves the
problem of the conventional system by “providing means for the operator to
control the submission of information to the insurer and by allowing the
operator to understand how modifying operational behavior affects the cost
of insurance.” Id. (citing Ex. 1001, 4:21-31, 42-46).
Upon review of the parties’ contentions, we agree with Progressive
that the claim term “level of risk” does not require a level of risk to be
“assigned based at least in part on the indicated level of willingness of the
driver to allow at least one aspect to be recorded.” PO Resp. 10. Figure 7 of
the ’598 and related description (Ex. 1001, 14-15) merely illustrates an
example. We observe that neither party alleges that the inventor of the ’598
patent acted as his own lexicographer and provided a special definition in
the specification for the claim term “level of risk” that is different from its
recognized meaning to one with ordinary skill. Therefore, we decline to
import the limitations from the example disclosed in the specification into
the claims. See Deere & Co. v. Bush Hog, LLC, 703 F.3d 1349, 1354 (Fed.
Cir. 2012) (“While claim terms are understood in light of the specification, a
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claim construction must not import limitations from the specification into
the claims.”). We further agree with Progressive that “a cost of insurance is
one metric for identifying a level of risk for an operator” if the cost of
insurance is determined based on the usage of the vehicle. PO Resp. 35-36.
Nevertheless, we cannot discern how the arguments presented by both
parties add any clarity to the claim term “level of risk,” which, though broad,
is relatively simple. Therefore, we do not believe an explicit construction is
necessary beyond the claim term’s ordinary and customary meaning.
6. “selected onboard vehicle data” (claims 1 and 33)
Neither party proffers a construction for the claim term “selected
onboard vehicle data.” Under the rule of broadest reasonable interpretation,
“selected onboard vehicle data” means nothing more than “certain onboard
vehicle data.” Our interpretation is consistent with the disclosure of the ’598
patent. For instance, the disclosure states that vehicle data elements
monitored and/or recorded include raw data elements, calculated data
elements, and derived data elements. Ex. 1001, 8:35-37. It is evident that
the term is meant to be inclusive, not restrictive. Thus, we do not limit
“selected onboard vehicle data” to just raw data sensed by sensors. Instead,
it covers processed or calculated onboard vehicle data. In summary, the
claim term “selected onboard vehicle data” means “certain onboard vehicle
data,” and note that it covers onboard vehicle data transformed by
processing or calculation. The particular forms of processing and
calculation referenced in the specification merely are examples, and we do
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not consider them as limitations on the covered transformation, under the
rule of broadest reasonable interpretation.
7. “database” (claims 1, 31-33, 48, and 78)
Neither party proposed a construction for the claim term “database.”
We have construed the claim term “database” in Liberty Mutual Insurance
Co. v. Progressive Casualty Insurance Co., CBM2012-00003, which
involves U.S. Patent No. 8,140,358 that claims the benefit of the filing date
of the application that issued as the ’598 patent. Consequently, we adopt
that claim construction in this proceeding, and construe the claim term
“database” as “a memory in which the stored data are searchable by the
content of a particular field in the data entries stored therein.” See NTP, Inc.
v. Research In Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005) (When
construing claim in patents that derive from the same parent application and
share common terms, “we must interpret the claims consistently across all
asserted patents.”).
B. Whether the challenged claims are entitled to an earlier filing date
All of the grounds of unpatentability asserted by Liberty are based on
either Burge or Nakagawa. Pet. 22; Prelim. Resp. 21. Liberty, in its
petition, asserts that claims 1-78 of the ’598 patent are not entitled to the
benefit of the filing date (May 15, 2000) of U.S. Patent Application No.
09/571,650 (“the ’650 application,” Ex. 2009), because the ’650 application
lacks the written description to support the challenged claims. Pet. 15.
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In its patent owner preliminary response, Progressive counters that in
a covered business method patent proceeding, Burge and Nakagawa do not
qualify as prior art against the claims of the ’598 patent, which have an
effective filing date (May 15, 2000) before the publication dates of Burge
(August 15, 2002) and Nakagawa (September 12, 2002).4 Prelim. Resp.
21-22. In support of that assertion, Progressive argues that the claims of the
’598 patent are entitled to the benefit of the filing date of the ’650
application. Id. In its patent owner response, Progressive submits additional
evidence and arguments, including two expert declarations (Ex. 2011 and
Ex. 2013) and claim charts (PO Resp. 60-79), to substantiate its position.
Upon reviewing the parties’ arguments and supporting evidence, we
have reevaluated our determination in the Decision on Institution (Dec. 19-
30) that certain claim features lack written description support in the ’650
application. For example, we agree with Progressive that the claim term “a
level of risk” does not require a level of risk to be “assigned based at least in
part on the indicated level of willingness of the driver to allow at least one
aspect to be recorded.” PO Resp. 10. Nevertheless, based on the record
before us, we determine that the original disclosure of the ’650 application
does not support the claimed subject matter set forth in claims 1-78 of the
’598 patent. For the reasons stated below, we determine that claims 1-78 of

4 Under section 18(a)(1)(C) of the AIA, a petitioner in a transitional
proceeding who challenges the validity of one or more claims in a covered
business method patent on grounds of unpatentability raised under §§ 102
and 103 may only support such grounds on the following basis:
(i) prior art that is described by section 102(a) of such title. . . .
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the ’598 patent are not entitled to the benefit of the filing date of the ’650
application—May 15, 2000. Consequently, Burge and Nakagawa are
available as prior art in this proceeding and Liberty may rely upon these
references to demonstrate that claims 1-78 are unpatentable under 35 U.S.C.
§§ 102 or 103.
Principles of Law
Under 35 U.S.C. § 120, a patent claim is entitled to the benefit of the
filing date of an earlier-filed application only if the disclosure of the
earlier-filed application provides written description support for the patent
claim as required by 35 U.S.C. § 112. In re Chu, 66 F.3d 292, 297 (Fed. Cir.
1995). The test for determining compliance with the written description
requirement under 35 U.S.C. § 112, ¶ 1, is whether the original disclosure of
the earlier-filed application reasonably would have conveyed to one with
ordinary skill in the art that the inventor had possession the claimed subject
matter at the time of the earlier-filed application. Ariad Pharm., Inc. v. Eli
Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc); In re Kaslow,
707 F.2d 1366, 1375 (Fed. Cir. 1983). The specification must convey with
reasonable clarity to those skilled in the art that the inventor was in
possession of the claimed subject matter, as of the filing date of the
earlier-filed application. Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563-
64 (Fed. Cir. 1991).

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The disputed claim features
All of the independent claims of the ’598 patent require an interface
module configured to render a driver safety score or generate driver safety
data that characterizes the level of risk associated with insuring a selected
operator or a vehicle, by processing the selected onboard vehicle data, in
response to a request to quantify driver behavior. Pet. 15-16. For instance,
claim 1 recites the following “interface module” limitations:
an interface module configured to search the database for
a risk assessment of vehicle data, where the interface module is
responsive to a request from a database user by using the
relationship data and the selected onboard vehicle data to
identify the level of risk;
where the interface module is further configured to be
responsive to a request to quantify driver behavior by
processing the selected onboard vehicle data to render a driver
safety score, where the driver safety score is characterized as a
level of risk associated with insuring a selected operator or a
vehicle.
Ex. 1001, 28:39-49.
Claim 33 recites the following “interface module” limitation:
an interface module configured to process the database
for a risk assessment of vehicle data, where the interface
module is responsive to a request to quantify driver behavior by
processing the monitored vehicle data to generate driver safety
data that characterizes the level of risk associated with insuring
a selected operator or a vehicle.
Ex. 1001, 31:43-49.
As stated above, the broadest reasonable interpretation of the claim
term “driver safety score” is “a calculated insurance risk value associated
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with driver safety.” Although the claim term “driver safety data”
encompasses “driver safety score” and “other data associated with driver
safety,” the “driver safety data” limitation as recited in claim 33 requires
more than “other data associated with driver safety.” That is because the
limitation requires that the interface module to generate driver safety data by
processing the monitored vehicle data in response to a request to quantify
driver behavior, and that the driver safety data characterizes the level of risk
associated with insuring a selected operator or a vehicle.
Interface Module
In its petition, Liberty asserts that the ’650 application does not
disclose a driver safety score or quantifiable driver safety data that establish
or characterize a level of risk associated with insuring a selected user or
vehicle, as required by the challenged claims. Pet. 15-17.
On the other hand, Progressive maintains that estimating a cost for
insuring a vehicle in the ’650 application inherently involves determining
and applying a driver safety score. PO Resp. 39-41. Progressive takes the
position that the ’650 application “discloses an interface module that is
responsive to a request from a database user to identify the level of risk.”
Id. at 37-38. According to Progressive, the interface module uses the
relationship data and selected onboard data to identify a level of risk
(e.g., actuarial class), in response to requests for insurance cost
determinations. PO Resp. 37 (citing Ex. 2013 ¶¶ 42, 47). As support,
Progressive provides three examples where the ’650 application allegedly
discloses such interface module: (1) an interface module is used for
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accessing the database by the charges algorithm (citing Ex. 2013 ¶ 47);
(2) an interface module is used for accessing the database by the web server
for “what if” gaming (citing Ex. 2013 ¶ 50); and (3) an interface module is
used for accessing the database by a web server for communicating
operating characteristics and the insurance cost between the insurer and the
insured (citing Ex. 2013 ¶ 56). PO Resp. 37-38; see also Ex. 2013 ¶¶ 42-66.
We are not persuaded by Progressive’s arguments and expert
testimony. We address each of those examples proffered by Progressive’s
expert testimony in turn.
First Example – Charges Algorithm
We have reviewed Progressive’s contention and expert testimony, as
well as the original disclosure of the ’650 application. Contrary to
Progressive’s expert testimony that an interface module is used for accessing
the database by the charges algorithm (PO Resp. 38; Ex. 2013 ¶¶ 43-48, 57-
61), neither the drawings nor the specification of the ’650 application
discloses an interface module between the data storage and charges
algorithm. We recognize that drawings alone may be sufficient to provide
the written description of the claimed subject matter. Vas-Cath, 935 F.2d at
1564. However, Progressive’s expert testimony erroneously relies on
merely an arrow connecting data storage 518 and charges algorithm 530 to
provide written description support for an interface module that is
configured to render a driver safety score that is characterized as a level of
risk associated with insuring a selected operator or vehicle, in response to a
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Case CBM2013-00004
Patent 8,090,598
23
of an interface module configured to render a driver safety score, or driver
safety data, that is characterized as a level of risk associated with insuring a
selected operator or vehicle, in response to a database user’s request to
quantify driver behavior, as claimed.
We recognize that the ’650 application and the ’598 patent have
overlapping disclosures. For instance, as Progressive’s counsel pointed out
at the final oral hearing, Figure 5 of the ’650 application is the same figure
found in Figure 5 of the ’598 patent. Tr. 34:16- 35:15. However, as Liberty
noted (Reply 7), the ’598 patent discloses an additional twelve figures and
thirteen columns of text, including Figures 8-17 of the ’598 patent that
illustrate display screens of an interface module showing a safety score,
usage discount, insurance discount, and vehicle operating performance
summary. Figure 8 of the ’598 patent, reproduced below, shows an example
of a display screen (emphasis added):

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Patent 8,090,598
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As shown in Figure 8 of the ’598 patent, the display screen clearly
shows the user his or her safety score, usage discount, insurance discount,
and vehicle operating performance summary. We observe that the additional
figures and related description regarding the interface module configured to
search a risk assessment database and to render a driver safety score that are
disclosed in the ’598 patent do not appear in the ’650 application.
Therefore, Progressive’s argument that the challenged claims are supported
by the ’650 application because the ’650 application contains the same
Figure 5 as the ’598 patent is unavailing.
The specification of the ’650 application also does not disclose an
interface module with the claimed functionalities between data storage 518
and charges algorithm 530. The ’650 application generally describes that
data stored in conventional data storage 518 are accessed by charges
algorithm 530. Ex. 2009, 19:23-24; 19:30-20:1; fig. 5. Although we
recognize that data transfer occurs between data storage 518 and charges
algorithm 530, nothing in the ’650 application discloses that data storage
518 has the capability to render a driver safety score in response to a
database user’s request. Nor does the ’650 application disclose that charges
algorithm 530 has the capability to permit a user to submit a request to data
storage 518 to obtain a driver safety score.
A general disclosure of accessing data by a charges algorithm from a
data storage is not sufficient to convey to one with ordinary skill in the art
that the inventors of the ’598 patent had possession of an interface module
configured to render a driver safety score, or driver safety data, that is
Case CBM2013-00004
Patent 8,090,598
25
characterized as a level of risk associated with insuring a selected operator
or vehicle, in response to a database user’s request to quantify driver
behavior, as claimed.
Second Example – “What if” Gaming Interface
Mr. Ivan Zatkovich testifies that the “what if” gaming operations
executing on web server 220 of Figure 5 necessarily involves “using the
relationship data and the selected onboard vehicle data to identify the level
of risk” as recited in claim 1. Ex. 2013 ¶¶ 50-53 (Ex. 2009, 20:18-19); see
also id. at ¶¶ 62-64 (citing Ex. 2009, 7:29-30). Progressive takes the
position that estimating a cost for insuring a vehicle inherently involves
determining and applying a driver safety score. PO Resp. 39-40. As
support, Mr. Michael Miller, testifies that determining premiums using
actuarial classes based on actual driving characteristics necessarily involves
rate factors and risk factors that are associated with driver safety and,
therefore, constitute driver safety scores. Ex. 2011 ¶¶ 39-40.
Liberty counters that insurance costs may be determined based on
detected driving characteristics without necessarily generating a driver
safety score first. Reply 4 (citing Ex. 1026 ¶¶ 29-38, 5-25). Liberty also
asserts that a person with ordinary skill in the art would not have understood
that the ’650 application necessarily discloses the additional calculation of a
driver safety score, as it does not provide any disclosure on how to apply
actuarial classes to determine premiums. Id. Liberty further submits that a
premium cannot be a rating factor or driver safety score because different
terms have different meanings. Id. at 6-7.
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Upon review of the parties’ arguments and supporting evidence, we
are not persuaded by Progressive’s arguments and expert testimony. Rather,
we agree with Liberty that a determination of an insurance cost does not
inherently involve rendering a driver safety score. See In re Robertson, 169
F.3d 743, 745 (Fed. Cir. 1999) (Inherency may not be established by
probabilities or possibilities.). We are cognizant that the ’650 application
need not describe the claimed subject matter in exactly the same way as the
terms used in the claims. See In re Wright, 866 F.2d 422, 425 (Fed. Cir.
1989); Eiselstein v. Frank, 52 F.3d 1035, 1038 (Fed. Cir. 1995).
Nonetheless, in order to satisfy the written description support requirement,
a person with ordinary skill in the art would have recognized that the
inventor possessed what is claimed in the later-filed application as of the
filing date of the earlier-filed application. See Noelle v. Lederman, 355 F.3d
1343, 1348 (Fed. Cir. 2004). The specification of the earlier-filed
application “must contain an equivalent description of the claimed subject
matter.” Lockwood, 107 F.3d at 1572.
Here, the ’650 application discloses:
The prospective interface relates to “what if” gaming where a
customer can project certain usages of the unit of risk, and the
system can, in combination with similar occurring usage in the
past or, based upon the overall customer profile or matrix,
project [an] estimated cost for such usage. In effect, a user can
determine in advance what particular usage of the unit will
incur as insurance cost with a very reliable associated
insurance estimate.
Ex. 2009, 20:18-23 (emphasis added).
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The ’650 application does not disclose a driver safety score, much less
an interface module configured to render a driver safety score that is
characterized as a level of risk associated with insuring a selected operator
or vehicle, in response to a request to quantify driver behavior, as claimed.
The “what if” online services interface, as disclosed in the ’650 application,
provides the user merely an estimated insurance cost.
There is no dispute that an insurance cost is not a driver safety score.
Progressive agrees that the claim term “driver safety score” means “a
calculated insurance risk value associated with driver safety” and the claim
term “rating factor” means “a calculated insurance risk value such as a
safety score or a usage discount.” PO Resp. 10. As the specification of the
’598 patent explains, an insurance cost is calculated based upon a rating
factor, such as a safety score. Ex. 1001, 22:19-22. That is, a driver safety
score is merely an example of a rating factor. Thus, a determination of an
insurance cost does not necessarily involve rendering a driver safety score.
We disagree with Progressive’s assertion that “a driver safety score
comprises a rating factor.” PO Resp. 40. In support of that assertion,
Progressive cites to claim 40 of the ’598 patent, which recites “the driver
safety score comprises a rating factor that quantifies an insurable risk.”
Ex. 1001, 32:1-3. However, that reliance on claim 40 is misplaced because
claim 40 is not part of the original disclosure of the application that issued as
the ’598 patent. Rather, that claim was added, as claim 232, by an
amendment filed on December 9, 2008, after the filing of the application that
issued as the ’598 patent. In fact, the original disclosure of the application
Case CBM2013-00004
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issued as the ’598 patent provides that a driver safety score is an example of
a rating factor. Ex. 1001, 22:19-22. Therefore, Progressive’s assertion is
not supported by the original disclosure of the application issued as the ’598
patent. In any event, an insurance cost is neither a rating factor nor a driver
safety score.
Although an insurance cost may be calculated based on a driver safety
score, that fact alone is insufficient to establish that a determination of
insurance cost inherently involves rendering a driver safety score. See
Robertson, 169 F.3d at 745 (Inherency may not be established by
probabilities or possibilities.). Further, the “what if” online services
interface, as disclosed in the ’650 application, does not provide an actual
driver safety score to a user in response to a request to quantify driver
behavior, as required the claims. It is well settled that “[e]ntitlement to a
filing date does not extend to subject matter which is not disclosed but
would be obvious over what is expressly disclosed.” Lockwood, 107 F.3d at
1571-72. “It is not sufficient for purposes of the written description
requirement of § 112 that the disclosure, when combined with the
knowledge in the art, would lead one to speculate as to modifications that
the inventor might have envisioned, but failed to disclose.” Id. Therefore, a
general disclosure of a web server providing an estimated insurance cost is
not sufficient to convey to one with ordinary skill in the art that the inventors
of the ’598 patent had possession of an interface module configured to
render a driver safety score, or driver safety data, that is characterized as a
Case CBM2013-00004
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level of risk associated with insuring a selected operator or vehicle, in
response to a database user’s request to quantify driver behavior, as claimed.
Third Example – Data Reports and Account Statements
In support of Progressive’s arguments, Mr. Zatkovich testifies that a
person with ordinary skill in the art would have understood that “the ’650
application necessarily discloses a database accessing capability so that the
web servers 220 can provide the insured with the recorded data as well as
the rating and billing 222 information.” Ex. 2013 ¶ 55 (citing Ex. 2009,
1:18-24; 19:2-4). Mr. Zatkovich further testifies that a person with ordinary
skill in the art would have understood that “the ’650 application shows that
web site 220 allows the viewing of rating information and billing
information which would include the risk factors and rate factors generated
as part of the computed costs and billing process.” Ex. 2013 ¶ 65 (citing Ex.
2009, 1:18-24; 7:24-26; 19:2-4).
We are not persuaded by Progressive’s arguments and expert
testimony. As discussed above, determining an insurance cost does not
necessarily involve rendering a driver safety score. See Robertson, 169 F.3d
at 745 (Inherency may not be established by probabilities or possibilities.).
Rather, as Liberty points out, an insurance cost is calculated based on a
rating factor, and a driver safety score is only an example of a rating factor.
Reply 6; Ex. 1001, 22:19-22 (A total discount is based upon a calculation
including an upload bonus, a rating factor, such as a safety score.).
Further, a general disclosure of a web server providing insurance
rating information, billing information, and recorded monitored vehicle data
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to a user is not an equivalent of an interface module configured to render a
driver safety score, or driver safety data, that is characterized as a level of
risk associated with insuring a selected operator or vehicle, by processing
the monitored vehicle data, in response to a database user’s request to
quantify driver behavior, as claimed. See Lockwood, 107 F.3d at 1572 (The
specification of the earlier-filed application “must contain an equivalent
description of the claimed subject matter.”). Such a general disclosure is not
sufficient to convey to one with ordinary skill in the art that the inventors of
the ’598 patent had possession of an interface module having the claimed
functionalities. “A description which renders obvious the invention for
which an earlier filing date is sought is not sufficient.” See Lockwood, 107
F.3d at 1572. Nor does the claimed subject matter could have been
“envisioned” from the earlier disclosure establish adequate written
description support. Goeddel v. Sugano, 617 F.3d 1350, 1356 (Fed. Cir.
2010).
C. Principles of Law
To establish anticipation under 35 U.S.C. § 102, each and every
element in a claim, arranged as is recited in the claim, must be found in a
single prior art reference. Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d
1359, 1369 (Fed. Cir. 2008); Karsten Mfg. Corp. v. Cleveland Golf Co., 242
F.3d 1376, 1383 (Fed. Cir. 2001).
A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
differences between the claimed subject matter and the prior art are such that
Case CBM2013-00004
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the subject matter, as a whole, would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said
subject matter pertains. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007). The question of obviousness is resolved on the basis of underlying
factual determinations including: (1) the scope and content of the prior art;
(2) any differences between the claimed subject matter and the prior art;
(3) the level of ordinary skill in the art; and (4) objective evidence of
nonobviousness. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).
The level of ordinary skill in the art is reflected by the prior art of
record. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001);
In re GPAC Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995); In re Oelrich,
579 F.2d 86, 91 (CCPA 1978).
D. Anticipation based on Burge
Liberty asserts that claims 1-78 are unpatentable under 35 U.S.C.
§ 102 as anticipated by Burge. Pet. 22-77. In support of that asserted
ground of unpatentability, Liberty provides detailed explanations as to how
each claim element, arranged as is recited in these claims, is disclosed by
Burge. Id. Liberty’s petition also relies on the declaration testimony of
Ms. Mary L. O’Neil and Mr. Scott Andrews. Exs. 1010 and 1014.
Upon review of Liberty’s petition, Progressive’s response, and
Liberty’s reply, we determine that Liberty has demonstrated, by a
preponderance of the evidence, that claims 1-78 are unpatentable under 35
U.S.C. § 102 as being anticipated by Burge.
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Burge
Burge relates to a system that uses operating data from vehicle sensors
to determine the cost of automobile insurance. Ex. 1003 ¶ 2. Figure 1 of
Burge, reproduced below, depicts an overall system of Burge:

As illustrated in Figure 1 of Burge, onboard sensors 90 shown within
vehicle 70 generate onboard vehicle data that represent operating
characteristics of the vehicle such as speeds, vehicle locations, and usage.
Id. at ¶ 112. The onboard vehicle data are processed by onboard data system
80 into abstract score data 95 (e.g., average speed, total miles driven, and
acceleration/deceleration profile). Id. at ¶¶ 113, 115. Onboard data system
80 has a wireless communication system connected to wireless network 100
that is capable of transmitting data. Id. at ¶ 114.
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Abstract score data 95 may be transmitted through wireless network
100 to control center 110. Id. at ¶ 115. Control center 110 includes
subscriber database 115, that contains subscriber data including information
about the individuals and vehicles being provided services by the control
center. Id.
Control center 110 is connected to the data delivery and processing
system 130 (“Data D&PS”), that enables vehicle owners to use the data to
analyze their risk or to provide information to insurance companies that may
enable more accurate insurance rates. Id. at ¶ 144. Data D&PS 130
performs functions such as analyzing and scoring abstract score data 95 to
determine the safety risk of a subscriber or vehicle, and provides a
mechanism for subscribers to obtain automobile insurance quotes from
insurance companies. Id. at ¶ 146.
Discussion
We have reviewed the parties’ arguments and supporting evidence,
and determine that the explanations and supporting evidence provided by
Liberty as to how each element of the challenged claims is described by
Burge have merit. In its patent owner response, Progressive maintains that
Liberty fails to meet its burden of demonstrating claims 1-78 of the ’598
patent are anticipated by Burge. PO Resp. 48-59. Specifically, Progressive
argues that Burge fails to disclose certain claim limitations. Progressive’s
arguments are directed to independent claims 1, 31, 32, 33, 48, and 78,
which are of similar scope. As such, Progressive essentially presents the
same arguments for each claim. Our analysis will focus on the deficiencies
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alleged by Progressive in its patent owner response with regard to the
challenged claims.
a. Server Receiver and Selected Onboard Vehicle Data
Liberty asserts that Burge discloses a server receiver configured to
receive wirelessly selected onboard vehicle data monitored by an in-vehicle
data monitoring device, as required by the independent claims of the ’598
patent. Pet. 30 (citing Ex. 1003 ¶¶ 112, 113, 115, 172, figs. 1, 3). However,
Progressive argues that Burge does not disclose such a server receiver. PO
Resp. 48-49. We are not persuaded by Progressive’s argument.
As Liberty noted, the onboard vehicle data (e.g., data relating to
speeds, amount of use, and braking and turn signal activities) are generated
by onboard sensors 90 within vehicle 70. Pet. 30 (citing Ex. 1003 ¶ 112,
fig. 1). Burge’s onboard data system 80 processes the onboard vehicle data
into abstract score data (e.g., average speed, total miles driven, and
acceleration/deceleration profile) and transmits abstract score data through
wireless network 100 to control center 110 in a remote location. Ex. 1003
¶¶ 113, 115, fig. 1.
Applying the broadest reasonable interpretation of the claim term
“selected onboard vehicle data”—“certain onboard vehicle data” that are not
limited to raw data, but include processed or calculated onboard vehicle
data—we agree with Liberty’s contention that abstract score data 95
(e.g., average speed, total miles driven, and acceleration/deceleration profile)
constitute “selected onboard vehicle data.” See Pet. 30.
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Accordingly, Liberty has demonstrated that Burge discloses a server
receiver configured to receive wirelessly selected onboard vehicle data, as
required by the independent claims of the ’598 patent.
b. Server Receiver Interface
Liberty asserts, in its petition, that Burge discloses a network server
coupled to a server receiver that provides an interface configured to establish
relationships between the selected onboard vehicle data and levels of risk in
a usage based insurance system, as recited in the independent claims of the
’598 patent. Pet. 32-33 (citing Ex. 1003 ¶¶ 112, 144, 195, 197; figs. 1, 12a).
Progressive, however, maintains that Burge does not disclose a network
server system coupled to, or in communication with, a server receiver. PO
Resp. 51.
Progressive’s argument is not persuasive. As Liberty points out in its
petition, Burge’s Data D&PS 130 (network server system) is connected to
control center 110 (server receiver). Pet. 32 (citing Ex. 1003 ¶ 144 (“The
Control Center 110 is connected to the Data Delivery and Processing System
130 (‘Data D&PS’).”)).
Figure 2 of Burge, reproduced below, shows the onboard data system
and the remote system (emphasis added).
Case CBM2013-00004
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As illustrated in Figure 2 of Burge, Data D&PS 130 is connected to
control center 110. Burge also discloses that one of “the primary functions
of the Data D&PS 130 is to enable vehicle owner to make use of [onboard
vehicle] data to analyze their risk exposure or to provide information to
insurance companies that may enable more accurate insurance rates to be
provided.” Ex. 1003 ¶ 144. Data D&PS 130 also performs functions such
as analyzing and scoring abstract score data 95 to determine the safety risk
of a particular subscriber or vehicle, and providing a mechanism for
subscribers to obtain automobile insurance quotes from insurance
companies. Id. at ¶ 146.

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Liberty, in its petition, also directs our attention to Figure 12a of
Burge, reproduced below:

As shown in Figure 12a of Burge, the graph illustrates the relationship
between abstract score 800 for a particular operating characteristic and risk
measures for that operating characteristic. Ex. 1003 ¶ 197. Risk measures
could represent any unit of risk measurement, including accident rates,
injury rates, death rates, or insurance claims that are correlated to a
particular operating characteristic. Id.
Based on the evidence before us, we determine that Liberty has
established that Burge discloses a network server system coupled to a server
receiver that provides an interface configured to establish relationships
between the selected onboard vehicle data and levels of risk in a usage based
insurance system, as required by the independent claims of the ’598 patent.
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c. Database, Relationship Data, Interface Module, and Driver Safety Score
In its petition, Liberty asserts that Burge discloses a database that
stores relationship data and an interface module configured to search the
database, identify the level of risk, and render a driver safety score, in
response to a request from a database user, by using the relationship data and
the selected onboard vehicle data, as required by the independent claims of
the ’598 patent. Pet. 35-39 (citing Ex. 1003 ¶¶ 52, 57, 193, 194, 195, 200,
206, 211, claim 44; figs. 13a, 31; Ex. 1010 ¶¶ 23-25). Progressive counters
that Burge does not describe searching a database for a risk assessment of
vehicle data and rendering a driver safety score. PO Resp. 56-57.
Progressive’s arguments are unavailing, as they are not supported by
the evidence before us. Figure 8 of Burge, reproduced below, illustrates data
inputs and outputs of Data D&PS 130 (emphasis added):

As shown in Figure 8 of Burge, Data D&PS 130 includes data
management system 830, data analysis system 840, and data presentation
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system 850. Ex. 1003 ¶ 193. Data management system 830 is configured to
receive subscriber 117, abstract scores 800, quotation requirement 820, and
other input data 825. Id. Data analysis system 840 is configured to analyze
the aforementioned data items, and to generate scaled scored 860 and safety
scores 870 for displaying to subscribers 170 and other data users 150 (e.g.,
fleet manager, employer, insurance company, and insurance data expert)
through the data presentation system 850. Id. at ¶ 195.
Figure 9a of Burge, reproduced below, depicts data management
system 830 that includes a central database server:

As illustrated in Figure 9a of Burge, data storage device 930 contains
a variety of databases, including safety subscriber database 940, active lead
database 950, and quotation database 960. Ex. 1003 ¶ 194.
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As Liberty indicates (Pet. 38-39), Burge discloses:
The Data Management System 830 includes a Processor 900,
communication Port 920, and Memory 910 for managing the
operations of the Data Management System 830, including:
(1) inputting of new Abstract Score Data; (2) inputting of new
subscriber data; (3) management of Data User 150 access;
(4) management of subscriber insurance requirements
information; (5) database searches and queries for data
analysis by Data Users 150; (6) management of insurance
quotations and denials. FIG. 9b is an overview diagram of the
relationship between the Safety Subscriber Database 940 and
the Active Lead Database 950. The purpose of the Safety
Subscriber Database 940 is for storage of Subscriber Data 117
and scoring data used to provide Subscribers 170 feedback
regarding the safety of their vehicle operating characteristics,
and is primarily used by Subscribers 170. The purpose of the
Active Lead Database 950 is for Subscribers 170 to receive
insurance quotations, and is primarily used by Insurance
Companies 190 querying the database with their rating and
underwriting criteria or for marketing purposes to specifically
request insurance quotations from insurance companies on
behalf of individual subscribers.
Ex. 1003 ¶ 194 (emphases added).
Moreover, Burge discloses a scoring system that enables abstracted
data to be used to assess the risk exposure of the consumer, and uses
off-board risk measure information to convert abstracted data into scaled
scores and safety scores that provide a measure of risk exposure. Ex. 1003
¶ 57. Burge also discloses a system for presenting data allowing for
comparison of the relative driving safety risks of drivers. Id. at ¶ 52. More
specifically, score graph 1600, as shown in Figure 16a of Burge, may
Case CBM2013-00004
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41
present information based on how the operating characteristics of a
subscriber compare to those in a population of subscribers. Id. at ¶ 206.
Based on the evidence before us, we conclude that Liberty has
demonstrated, by a preponderance of evidence, that Burge describes a
searchable database for a risk assessment of vehicle data, and an interface
module configured to search the database, identify the level of risk, and
render a driver safety score, in response to a request from a database user to
quantify driver behavior, by processing the selected onboard vehicle data, as
required by the independent claims of the ’598 patent.
d. Conclusion
For all of the reasons stated above, we are not persuaded by
Progressive’s arguments as to independent claims 1, 31, 32, 33, 48, and 78.
Progressive does not address specifically dependent claims 2-30, 34-47, and
49-77. PO Resp. 41-58. Liberty provides sufficient explanations and
evidence to show that Burge discloses the additional recited limitations in
those claims. Pet. 48-77. For the foregoing reasons, we hold that Liberty
has demonstrated, by a preponderance of the evidence that claims 1-78 are
anticipated by Burge.

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E. Anticipation based on Nakagawa
Liberty asserts that claims 1-78 are unpatentable under 35 U.S.C.
§ 102 as anticipated by Nakagawa. Pet. 22-77. As support, Liberty provides
detailed explanations as to how each claim element, arranged as is recited in
these claims, is disclosed by Nakagawa. Id. Liberty also relies on the
declaration testimony of Ms. O’Neil and Mr. Andrews. Exs. 1010 and 1014.
Upon review of Liberty’s petition, Progressive’s response, and
Liberty’s reply, we determine that Liberty has demonstrated, by a
preponderance of the evidence, that claims 1-78 are unpatentable under 35
U.S.C. § 102 as being anticipated by Nakagawa.
Nakagawa
Nakagawa discloses a system that comprises mechanisms for
detecting the usage of vehicles, storing data related to vehicles, and
calculating vehicle insurance premiums based on detection results and
inputted data. Ex. 1004, Abs. Figure 2 of Nakagawa is reproduced below:

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As shown in Figure 2 of Nakagawa, the premium calculation system
comprises onboard apparatus 4, maintenance data management means 5, and
server apparatus 6. Id. at ¶ 52. Onboard apparatus 4 comprises operation
status detection means 7 and onboard radio part 9 that sends and receives
data. Id. Server apparatus 6 calculates insurance premiums based on data
received from onboard apparatus 4 and maintenance data management
means 5. Id. at ¶ 61. Display means 10 displays premium discounts,
operating levels, and safety levels. Id. at ¶¶ 74-76.
Discussion
We have reviewed the parties’ arguments and supporting evidence,
and determine that the explanations and supporting evidence provided by
Liberty as to how each element of the challenged claims is described by
Nakagawa have merit. In its patent owner response, Progressive maintains
that Liberty fails to meet its burden of demonstrating claims 1-78 of the ’598
patent are anticipated by Nakagawa. PO Resp. 48-59. In particular,
Progressive argues that Nakagawa does not describe certain claim
limitations. Progressive’s arguments are directed to independent claims 1,
31, 32, 33, 48, and 78, which are of similar scope. As such, Progressive
presents essentially the same arguments for each claim. Our analysis will
focus on the deficiencies alleged by Progressive in its patent owner response
with regard to the challenged claims.
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a. Selected Onboard Vehicle Data
Liberty asserts that Nakagawa discloses a server receiver configured
to receive wirelessly-selected onboard vehicle data monitored by an
in-vehicle data monitoring device, as required by the independent claims of
the ’598 patent. Pet. 30-31 (citing Ex. 1004 ¶¶ 12, 24, 48, fig. 2). However,
in its patent owner response, Progressive disagrees and argues that the data,
in Nakagawa, obtained from the sensors are processed into point values
reflecting a degree of safety or danger before it is transmitted wirelessly to
the server apparatus. PO Resp. 49-50.
Liberty counters that Nakagawa expressly discloses that “detected
vehicle data being transmitted to the server without being processed into
point values.” Reply 12 (citing Ex. 1004 ¶¶ 58, 56; Ex. 1023 ¶¶ 5-6).
According to Liberty, Nakagawa discloses that the “user data” received and
stored at the server includes onboard vehicle detected data (e.g., data related
to speeding, seatbelt usage, acceleration, and deceleration). Id. (citing
Ex. 1004 ¶ 72; Ex. 1023 ¶ 7). Liberty further asserts that Nakagawa’s
calculated numeric usage data (e.g., the safety point scores) also satisfy the
“selected onboard vehicle data” claim limitation, because they are calculated
from raw data collected using onboard vehicle sensors. Id. (citing Ex. 1001,
8:35-37; Ex. 1023 ¶¶ 8-9).
We agree with Liberty. Indeed, Nakagawa describes that onboard
apparatus 4, as shown in Figure 2 of Nakagawa, has various sensors that
collect information related to status of safety equipment, and then sends the
collected information to the insurance company via a radio communication.
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Ex. 1004 ¶ 48; Figs. 1-2. Figure 5 of Nakagawa, reproduced below,
illustrates the steps for calculating insurance premium:

As shown in Figure 5 of Nakagawa, first the usage data is read from
the memory in onboard control part 12 (steps ST1 and ST2). Ex. 1004 ¶ 69.
Onboard radio part 9 sends the usage data and an identification (“ID”) to
fixed radio part 18 in server apparatus 6 (step ST3). Id. After server
apparatus 6 receives the usage data and ID, server-sided control part 22
updates that user data stored in memory that corresponds to the received ID
(steps ST5 and ST 6). Id. Insurance premium calculation part 20 reads the
user data corresponding to the ID from memory in control part 22 on the
server side and calculates the insurance premium for the next term (step
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ST7). Id. at ¶ 70. Nakagawa clearly discloses that the user data (e.g., data
related to speeding, seatbelt usage, acceleration and deceleration) are used
by insurance premium calculation means 20 to calculate insurance
premiums. Id. at ¶ 72.
Progressive’s argument narrowly focus on only Nakagawa’s safety
point scores (Ex. 1004 ¶ 65), and fails to consider Nakagawa’s disclosure as
a whole (e.g., Ex. 1004 ¶¶ 69-73; fig. 5). In any event, applying the broadest
reasonable interpretation of the claim term “selected onboard vehicle
data”—“certain onboard vehicle data” that are not limited to raw data, but
include processed or calculated onboard vehicle data—we agree with
Liberty’s contention that the safety point scores described in Nakagawa
constitute “selected onboard vehicle data.” Therefore, for this additional
reason, Progressive’s argument that Nakagawa does not disclose the
“selected onboard vehicle data” limitation is unavailing.
For the foregoing reasons, Liberty has demonstrated that Nakagawa
discloses a server receiver configured to receive wirelessly selected onboard
vehicle data, as required by the independent claims of the ’598 patent.
b. Server Receiver
Liberty asserts, in its petition, that Nakagawa discloses a network
server coupled to a server receiver that provides an interface module
configured to establish relationships between the selected onboard vehicle
data and levels of risk in a usage based insurance system, as recited in the
independent claims of the ’598 patent. Pet. 33-34 (citing Ex. 1004 ¶¶ 50, 61,
69, 70, 72, 76; figs. 2, 7; Ex. 1014 ¶¶ 23, 37). Progressive disagrees and
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argues that Nakagawa does not disclose “a network server system coupled to
the server receiver” because Liberty relies on Nakagawa’s server apparatus 6
to meet both the “server receiver” and the “network server system” features.
PO Resp. 52-53.
Liberty counters that Nakagawa discloses, as part of server
apparatus 6, a network server system that comprises insurance premium
calculation means 20 and server control part 22, that are connected via
control bus 21 to fixed radio part 18 and reception means 19 (e.g., server
receiver). Reply 12-13 (citing Ex. 1004 ¶ 61, fig. 2; Ex. 1014 ¶ 37).
We agree with Liberty, as Progressive merely focuses on server apparatus 6
as one component, and fails to consider the overall system that has multiple
interconnected components.
Progressive also contends that Nakagawa’s vehicle data is not
processed remotely, but rather in onboard apparatus 4 and, therefore, the
“insurance premium calculation means” on the server side of Nakagawa
does not meet the claim limitation that requires establishing relationships
between vehicle data and levels of risk remotely. PO Resp. 52 (citing
Ex. 1004 ¶ 65). We are not persuaded, as Progressive’s argument
erroneously rests on the premise that the safety point scores (Ex. 1004 ¶ 65)
are the only onboard vehicle data sent to server apparatus 6, and that they are
not selected onboard vehicle data. As articulated above, we did not find that
argument persuasive.
Moreover, as Liberty explains in its petition, Nakagawa’s insurance
premium calculation means 20 calculates premiums by discounting or
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increasing them, using user data (e.g., data related to speed, seatbelt usage,
acceleration, and deceleration) and prescribed values as a standard. Pet. 33-
34 (citing Ex. 1004 ¶¶ 69-70, 72, 76, figs. 5, 7). For example, the premium
increases if the user data reflects unsafe driving behavior (e.g., speeding,
non-use or inappropriate use of seatbelts, or sudden acceleration or
deceleration). Ex. 1004 ¶ 72. On the other hand, the premium is discounted
if the user data reflects safe driving behavior (e.g., driving within the speed
limit, appropriate use of seatbelts). Id. Once insurance premium calculated
means 20 has calculated the premium, fixed radio part 18 sends, by radio,
the data relating to the calculated premium to onboard apparatus 4 (step ST8
of Figure 5). Id. ¶ 73.
We observe that Nakagawa also discloses “relationship data”
indicating relationship between levels of risk and the selected onboard
vehicle data. As discussed in the claim construction section, the term “a
level of risk” does not require a level of risk to be “assigned based at least in
part on the indicated level of willingness of the driver to allow at least one
aspect to be recorded.” A cost of insurance is one metric for identifying a
level of risk for an operator, if the cost of insurance is determined based on
the usage of the vehicle, as disclosed here in Nakagawa. Notably, Figure 6
of Nakagawa, reproduced in the next section, shows a screen that displays,
to the user, pass rates for each safety item used in the vehicle and insurance
premium discount is estimated based on those pass rates. And Figure 7 of
Nakagawa, also displays a screen showing, to the user, user operating levels
and premium discounts rates based on driving operational data.
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In that connection, Liberty’s expert, Mr. Andrews explains that
Nakagawa further discloses a server apparatus 6 (see e.g.,
Fig. 2) that includes a fixed radio part 18 (server receiver) that
provides an interface to server side control part 22 and
insurance premium calculation means 20. This interface is
configured, as described in Fig. 5, to determine insurance
premiums based on the relationship between the usage data
(onboard vehicle data) and data relating to “safe” and
“unsafe” driving related behavior that correspond to increases
or decreases in risk and premiums, such as “speeding . . . , non-
use or inappropriate use of seatbelts, application of ABS other
than during an accident, [or] sudden acceleration and
deceleration” (levels of risk). Id. at ¶¶ [0050], [0069]-[0072],
[0076].
Ex. 1014 ¶ 37 (emphasis added).
We credit Mr. Andrews’s testimony, as it is consistent with the
disclosure of Nakagawa (Ex. 1004 ¶¶ 69-70, 72, 76, figs. 5-7). Based on the
evidence before us, we determine that Liberty has established that Nakagawa
discloses a network server system coupled to the server receiver that
provides an interface configured to establish relationships between the
selected onboard vehicle data and levels of risk in a usage based insurance
system, as required by the independent claims of the ’598 patent.
c. Database, Relationship Data, and Interface Module
In its petition, Liberty asserts that Nakagawa discloses a database that
stores relationship data and an interface module configured to search the
database and identify the level of risk, in response to a request from a
database user, by using the relationship data and the selected onboard
vehicle data, as required by the independent claims of the ’598 patent.
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Pet. 33-41 (citing Ex. 1004 ¶¶ 50, 61, 69, 70, 72, 76, 92, figs. 2, 5, 7, 10;
Ex. 1010 ¶¶ 23-25; Ex. 1014 ¶¶ 22, 25, 35).
However, Progressive argues that Nakagawa fails to disclose a
database and storing “relationship data” in a database. PO Resp. 54.
Progressive also contends that Nakagawa describes storing “user data” in a
memory, and a person with ordinary skill in the art would not have found a
database to be necessarily present in Nakagawa because not all telematics
systems store data in databases. Id. Progressive further maintains that
Nakagawa does not disclose that data is searchable for a risk assessment of
vehicle data, as the onboard vehicle data is assessed for safety in the onboard
apparatus rather than in the server apparatus. Id. at 55-56.
Liberty counters that Nakagawa discloses storing “relationship data”
in a searchable database. Reply 13-14. Accordingly to Liberty, for the data
of a particular user (e.g., data related to speeding) to be recorded in memory
in a way that can be located and retrieved later (e.g., to update or calculate
with a particular piece of data), they must be stored in a database
maintaining the link to user ID. Id. at 13 (citing Ex. 1023 ¶¶ 10-14). Liberty
also asserts that the “user data” stored in the database include “data
indicating the relationship established between vehicle data and levels of
risk that correspond to changes in risk and premiums” (e.g., speeding or
driving within the speed limit). Id. (citing Ex. 1004 ¶ 72). Liberty further
submits that “[u]pdating stored ‘user data’ corresponding to a received user
ID and evaluating that user’s risk and premiums, as later displayed . . . ,
necessarily requires searching the database for a risk assessment.” Id. at
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13-14 (citing Ex. 1023 ¶ 15). We agree with Liberty as its position is
supported by the disclosure of Nakagawa and the evidence on record.
Nakagawa’s control part 22 on the server side is equipped with
memory and the data relating to car insurance subscribers is stored in the
memory as “user data.” Ex. 1004 ¶ 61. When onboard radio part 9 sends
the selected onboard vehicle data and an ID that corresponding to the
particular user to Nakagawa’s server apparatus 6, control part 22 updates the
“user data” stored in memory that corresponds to the received ID. Id. at
¶ 69. As stated in Nakagawa, the latest data collected in onboard apparatus
4 and the latest data collected at contract repair factory 3 are stored in the
memory of control part 22 as “user data.” Id. Further, insurance premium
calculation part 20 reads the “user data” (e.g., speeding) corresponding to
the particular ID from the memory in control part 22 to calculate the
insurance premium increases or discounts for the user associated with the
particular ID. Id. at ¶¶ 70, 72.
In that regard, Liberty’s expert, Mr. Andrews testifies:
Nakagawa also describes updating the driver’s usage data
stored in the server’s memory that corresponds to the ID. Id.
These data are thus stored so as to create a correspondence
between a driver’s stored “usage data” and an ID. Such a
correspondence would be understood by one skilled in the art as
indicating a database. A person of ordinary skill in the art
would understand that such a database is inherently searchable
to permit pertinent data to be retrieved.
Ex. 1014 ¶ 35 (emphasis added). We credit Mr. Andrew’s testimony as it is
supported by the disclosure of Nakagawa (see, e.g., Ex. 1004 ¶¶ 61, 69, 71,
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72). As indicated above in the claim construction section, the claim term
“database” means “a memory in which the stored data are searchable by the
content of a particular field in the data entries stored therein.” Because the
data entries corresponding to particular User IDs have to be updated and
read later, it is logical and persuasive that the User IDs have to be stored,
that a link has to be maintained between each data entry and its
corresponding User ID, and that the entries are searchable by User ID.
Because of the presence of a link between each User ID and the data
corresponding to that User ID, each data entry item has a field, the content
of which is the User ID, which represents a name for the corresponding data
entry. Progressive does not explain sufficient why a link need not be
maintained between each User ID and the corresponding user data, such that
each data entry item includes a field containing the corresponding User ID
by which the data entry is searchable. Therefore, Liberty has demonstrated,
not by principles of inherent disclosure, but direct disclosure, that
Nakagawa’s memory in control part 22 on the server side discloses a
searchable database.
Further, Mr. Andrews explains that the “user data” stored in the
database include “data indicating the relationship established between
vehicle data and levels of risk that correspond to changes in risk and
premiums,” (e.g., excessive speeding or driving with in the speed limit).
Ex. 1023 ¶ 14 (citing Ex. 1004 ¶ 72). We are persuaded by Mr. Andrews’s
testimony, as it is consistent with the disclosure of Nakagawa. As discussed
above, “a level of risk” does not require a level of risk to be “assigned based
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at least in part on the indicated level of willingness of the driver to allow at
least one aspect to be recorded.” A cost of insurance is one metric for
identifying a level of risk for an operator, if the cost of insurance is
determined based on the usage of the vehicle, as disclosed here in
Nakagawa.
Indeed, Figure 6 of Nakagawa, reproduced below, illustrates a
premium discount calculated based on the selected vehicle data:

As illustrated in Figure 6 of Nakagawa, the screen displays pass rates
for each safety item used in the vehicle, and an insurance premium discount
is estimated based on those pass rates. Ex. 1004 ¶ 74. Further, Figure 7 of
Nakagawa, reproduced below, shows user operating levels and discount
rates for insurance premiums based on driving operational data:
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As depicted in Figure 7 of Nakagawa, the evaluation of operating
levels is calculated in numeric form and displayed to reflect the amount by
which the premium will be multiplied. Ex. 1004 ¶ 76. The operating levels
show driving techniques and the level of safe driving as points which are
than evaluated as numbers. Id. The operating level of each month is
displayed as bar graph to show operating improvements. Id. Nakagawa also
discloses that the insurance premium can be calculated in real-time as the
data collected from onboard apparatus 4 changes. Ex. 1004 ¶ 71. By
calculating the insurance premium in real-time, the system enables the user
to understand that increases are applied to insurance premiums when unsafe
driving occurs, and that discounts apply when safety equipment is properly
installed and utilized. Ex. 1004 ¶ 77.
For the foregoing reasons, Liberty has demonstrated, by a
preponderance of evidence, that Nakagawa describes a searchable database
for a risk assessment of vehicle data that stores “relationship data” indicating
relationships between relative levels of risk and the selected onboard vehicle
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data, and an interface module configured to search the database to identify
the level of risk, as required by the independent claims of the ’598 patent.
d. Driver Safety Score
Liberty asserts, in its petition, that Nakagawa discloses an interface
module configured to render a driver safety score, in response to a request to
quantify driver behavior, by processing the selected onboard vehicle data, as
required by the independent claims. Pet. 39-41 (citing Ex. 1004 ¶¶ 50, 69,
72, 76, 92, figs. 2, 5, 7, 10; Ex. 1014 ¶¶ 22, 25, 35). In its patent owner
response, Progressive, however, argues that Nakagawa’s operating levels are
calculated in onboard apparatus 4, rather than in a server side “interface
module.” PO Resp. 56-58 (citing Ex. 1004 ¶ 65).
Liberty counters that Nakagawa discloses an interface at the remote
server configured to generate a driver safety score. Reply. 14 (citing
Ex. 1004 ¶ 76; fig. 7). In particular, Liberty submits that Nakagawa’s server
analyzes usage data via an interface to determine total monthly operating
levels and premium. Id. at 14-15 (citing Ex. 1004 ¶ 76; fig. 7; Ex. 1023
¶¶ 16-21). Liberty further asserts that the data sent by the server and
displayed in the vehicle contains an “evaluation of operating level for one
month [that] is calculated in number form and displayed to reflect the
amount by which the insurance premium will be multiplied.” Id.
We are not persuaded by Progressive’s argument, as it narrowly
focuses on Nakagawa’s safety point scores (Ex. 1004 ¶ 65), and fails to
consider Nakagawa’s disclosure as a whole (e.g., Ex. 1004 ¶¶ 69-73, 76;
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figs. 6-7). Rather, we agree with Liberty, as its position is supported by
Nakagawa’s disclosure.
Nakagawa’s “user data” are stored in control part 22 on the server
side. Ex. 1004 ¶ 61. When onboard radio part 9 sends the usage data and an
ID to server apparatus 6, control part 22 on the server side updates the “user
data” stored in the memory that corresponds to the received ID. Id. at ¶ 69.
That is, the latest data collected are stored in control part 22 on the server
side as “user data.” Id.
There is no dispute that insurance premium calculation means 20, on
the server side, calculates insurance premium based on the user data
(e.g., data relating to speeding, seatbelt usage, acceleration and
deceleration). Ex. 1004 ¶¶ 70, 72. Fixed radio part 18, on the server side,
sends the data relating to the calculated insurance premium to onboard
apparatus 4, which displays the data to the user. Id. at ¶ 73. Figures 6 and 7
of Nakagawa, reproduced above in the previous section, show examples of
screen displays.
Both parties agree that the broadest reasonable interpretation of the
claim term “driver safety score” is “a calculated insurance risk value
associated with driver safety.” Pet. 21; PO Resp. 10. Applying that
construction, the claim term “driver safety score” reads on Nakagawa’s
operation level points. Ex. 1004 ¶ 76. As shown in Figure 7 of Nakagawa,
user operating levels and discounts rates for insurance premiums over
previous months are shown in graph form based on data relating to the
driving operation of the car. Id. The operating levels show driving
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techniques and the level of safe driving as points, and they are calculated for
each month in numeric form. Id.
Based on the evidence before us, Liberty has demonstrated, by a
preponderance of evidence, that Nakagawa describes an interface module
that quantifies driver behavior by processing onboard vehicle data to render
a driver safety score, as required by the independent claims of the ’598
patent.
e. Conclusion
For all of the reasons stated above, we are not persuaded by
Progressive’s arguments as to independent claims 1, 31, 32, 33, 48, and 78.
Progressive does not address specifically dependent claims 2-30, 34-47, and
49-77. PO Resp. 41-58. Liberty provides sufficient explanations and
evidence to show that Nakagawa discloses the additional recited limitations
in those claims. Pet. 48-77. For the foregoing reasons, we hold that Liberty
has demonstrated, by a preponderance of the evidence, that claims 1-78 are
anticipated by Nakagawa.
F. Obviousness Grounds of Unpatentability
Liberty asserts that claims 16, 17, 63, and 64 are unpatentable under
35 U.S.C. § 103(a) over Burge and Herrod, and claim 47 is unpatentable
over Nakagawa and Herrod. Pet. 22-26, 56-57, 76. Liberty provides
sufficient explanations and evidence to demonstrate that the combination of
Burge and Herrod would have rendered the claimed subject matter in recited
claims 16, 17, 63, and 64 obvious to one with ordinary skill in the art, and
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that the combination of Nakagawa and Herrod would have rendered the
claimed subject matter recited in claim 47 obvious to one with ordinary skill
in the art. Id.
Progressive relies upon the same arguments presented with respect to
the anticipation grounds of unpatentability based on either Burge or
Nakagawa. PO Resp. 58-60. We have addressed those arguments and
determined that they are not persuasive.
For same reasons discussed above, we hold that claims 16, 17, 63, and
64 are unpatentable under 35 U.S.C. § 103(a) over Burge and Herrod, and
claim 47 is unpatentable over Nakagawa and Herrod.
G. Liberty’s Motion to Exclude
Liberty seeks to exclude the following evidence: (1) the declaration
of Mr. Zatkovich (Ex. 2013 ¶¶ 10-71); (2) the declaration of Mr. Miller
(Ex. 2011 ¶ 15); and (3) the supplemental declaration of Mr. Miller
(Ex. 2017 ¶¶ 2-5). Paper 36 (“Pet. Mot.”).
Liberty contends that Mr. Zatkovich lacks “the necessary scientific,
technical, or other specialized knowledge on insurance and telematics issues
pertinent to the ’598 patent to provide testimony on those subjects.” Pet.
Mot. 5. In particular, Liberty asserts that Mr. Zatkovich has no basis to
render opinions regarding the understanding of a person with ordinary skill
in the art as to insurance matters, because Mr. Zatkovich does not purport to
be a person with ordinary skill in the art. Id. Liberty also argues that
Mr. Zatkovich has no experience in telematics, as of January 1996, the
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earliest effective filing date claimed by the ’598 patent. Id. at 5-6. Pursuant
to the Federal Rule of Evidence 702,5 Liberty alleges that Mr. Zatkovich “is
not sufficiently knowledgeable about insurance matter or telematics matters
as of 1996.” Id. at 6.
We disagree with Liberty that Mr. Zatkovich must be qualified both in
the field of insurance and in the field of vehicle telematics to give reliable
testimony in this proceeding. It is only the “hypothetical” person of ordinary
skill in the art who possesses ordinary skill in each of the fields involved in a
claimed invention. In re GPAC, 57 F.3d 1573, 1579 (Fed. Cir. 1995) (“The
person of ordinary skill in the art is a hypothetical person who is presumed
to know the relevant prior art.”). The qualifications of Mr. Zatkovich, as
summarized in his curriculum vitae (Ex. 2014), qualify him to give expert
testimony on the subject of vehicle telematics, computer systems, and
network communications. With regard to Mr. Zatkovich’s alleged lack of

5 With some enumerated exceptions, the Federal Rules of Evidence apply to
covered business method patent review. 37 C.F.R. § 42.62.
The Federal Rule of Evidence 702 entitled “Testimony by Experts” states:
If scientific, technical, or other specialized knowledge will
assist the trier of fact to understand the evidence or to determine
a fact in issue, a witness qualified as an expert by knowledge,
skill, experience, training, or education, may testify thereto in
the form of an opinion or otherwise, if (1) the testimony is
based upon sufficient facts or data, (2) the testimony is the
product of reliable principles and methods, and (3) the witness
has applied the principles and methods reliably to the facts of
the case.

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ordinary skill on the specific subject of insurance, the Board weighs his
testimony accordingly, taking into account the limited extent of his
expertise.
We also disagree that Mr. Zatkovich’s technical experience must have
been acquired prior to January 1996. Under the Federal Rule of Evidence
702, a witness who is qualified as an expert by knowledge, skill, experience,
training or education may testify in the form of an opinion. Liberty has not
shown that Rule 702 of the Federal Rules of Evidence requires the witness to
have particular experience with the specific subject matter of the ’598
patent, or requires the relevant experience of the witness to have been
acquired during the January 1996 time-frame.
As to the declarations of Mr. Miller (Ex. 2011 ¶ 15; Ex. 2017 ¶¶ 2-5),
Liberty argues that Mr. Miller in his declaration (Ex. 2011 ¶ 15) referred to a
publication titled “Risk Classification Statement of Principles,” published by
the American Academy of Actuaries in 1980, but Progressive did not
provide timely a copy of the publication to Liberty.
Instead, in response to Liberty’s objection, Progressive filed a
supplemental declaration of Mr. Miller (Ex. 2017 ¶¶ 2-5) that indicates the
following: (1) that Mr. Miller was a member of the American Academy of
Actuaries from 1975 to 2010; (2) that Exhibit 2012 in CBM2012-00002 is a
true and correct copy of a publication titled “Risk Classification Statement
of Principles,” published by the American Academy of Actuaries in 1980;
(3) that Exhibit 2012 in CBM2012-00002 is widely accepted and followed
by members of the actuarial profession; and (4) that Exhibit 2012 in
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CBM2012-00002 is the same publication referred to in Mr. Miller’s
declaration (Ex. 2011 ¶ 15).
Progressive ultimately filed and served a copy of the publication at
issue, as Exhibit 2023, together with its opposition to Liberty’s motion to
exclude evidence. Progressive should have served a copy of the publication
at the time it filed the patent owner response, or at the time it filed the
supplemental declaration of Mr. Miller, and not waited until the time of its
opposition to Liberty’s motion to exclude evidence. Under 37 C.F.R.
§ 41.51(b)(1)(i), “[u]nless previously served or otherwise by agreement of
the parties, any exhibit cited in a paper or in testimony must be served with
the citing paper or testimony.” The wording “previously served” in
37 C.F.R. § 41.51(b)(1)(i) is construed to mean within the same proceeding
before the Board, and does not cover related proceedings.
Liberty does not dispute that, prior to the filing of the patent owner
response, Progressive had served Liberty, in related proceeding CBM2012-
00002, a copy of Exhibit 2012 in CBM2012-00002. Liberty also does not
dispute that Exhibit 2012 in CBM2012-00002 is the publication referenced
in Mr. Miller’s declaration (Ex. 2005 ¶ 15). Given that Progressive, through
the supplemental declaration of Mr. Miller, informed Liberty that the
publication at issue is the same as Exhibit 2012 in CBM2012-00002, there is
no prejudice to Liberty for not having been served with the publication at the
time of Progressive filed its patent owner response. Under the totality of
these circumstances, we decline to exclude the testimony of Mr. Miller.
Accordingly, Liberty’s motion to exclude is denied.
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H. Progressive’s Motion to Exclude
Progressive seeks to exclude certain evidence submitted in support of
Liberty’s reply. Paper 39 (“PO Mot.”). Liberty opposes Progressive’s
motion to exclude. Paper 43 (“Opp.”). As the movant, Progressive has the
burden of proof to establish that it is entitled to the requested relief. See 37
C.F.R. § 42.20(c). For the reasons stated below, Progressive’s motion is
denied.
A motion to exclude must explain why the evidence is not admissible
(e.g., relevance or hearsay), but may not be used to challenge the sufficiency
of the evidence to prove a particular fact. Office Patent Trial Practice Guide,
77 Fed. Reg. 48,765, 48,767 (Aug. 14, 2012). While a motion to exclude
may raise issues related to admissibility of evidence, it is not an opportunity
to file a sur-reply, and also is not a mechanism to argue that a reply contains
new arguments or relies on evidence necessary to make out a prima facie
case. Here, Progressive’s motion to exclude contains such improper
arguments, and is in the nature of a sur-reply. PO Mot. 1-9. Moreover, as
discussed below, Progressive’s arguments also are without merit.
1. New issues as to the claimed “level of risk”
Progressive seeks to exclude Ms. O’Neil’s rebuttal declaration
(Ex. 1026). PO Mot. 4. Progressive asserts that Ms. O’Neil’s testimony
includes new arguments and constitutes new evidence that should have been
submitted with Liberty’s petition. Id. at 4-5.

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Liberty opposes and argues that Ms. O’Neil’s rebuttal declaration was
submitted properly to respond to Progressive’s arguments that Burge and
Nakagawa fail to disclose the claimed “level of risk.” Opp. 3-4. Liberty
points out that Progressive affirmatively asserted, in its patent owner
response, that “neither Burge nor Nakagawa discloses this ‘level of risk’ as
construed by the Board.” Id. (citing PO Resp. 26, 33, 51 n.9, 57).
Having considered the parties’ arguments and supporting evidence,
we are not persuaded by Progressive’s arguments. Contrary to Progressive
assertion that it was merely arguing that Liberty failed to offer adequate
evidence in its petition to establish that Burge and Nakagawa disclose the
claimed “level of risk” (PO Mot 4-5), Progressive, in its patent owner
response, affirmatively argue that neither reference discloses the claimed
level of risk (PO Resp. 26, 33, 51 n.9, 57). Therefore, we agree with Liberty
that Ms. O’Neil’s rebuttal declaration (Ex. 1026) was submitted properly to
rebut Progressive’s argument made in its patent owner response (PO Resp.
26, 33, 51 n.9, 57). Progressive has not demonstrated that Ms. O’Neil’s
rebuttal declaration exceeds the proper scope of reply evidence.
Accordingly, we are not persuaded by Progressive’s argument that
Ms. O’Neil’s rebuttal declaration (Ex. 1026) should be excluded.
2. New issues as to claimed “database”
Progressive seeks to exclude the rebuttal declaration of Mr. Andrews
(Ex. 1023) as new evidence that should have been submitted with the
petition. PO Mot. 5-7. Progressive argues that Liberty submitted no
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testimonial evidence with its petition that Nakagawa inherently disclosed
a “database,” and Mr. Andrews in its rebuttal declaration advanced a new
argument on inherency by testifying that “Nakagawa’s user data [are]
necessarily stored in a database.” Id. (citing Ex. 1023 ¶ 12).
Liberty opposes and argues that the rebuttal declaration of
Mr. Andrews was filed properly to rebut Progressive’s argument made in its
patent owner response that Nakagawa did not disclose a “database”
(PO Resp. 54). Opp. 6-8. We agree with Liberty.
As Liberty points out, its petition asserted that a person of ordinary
skill in the art “would have recognized that Nakagawa’s disclosure
‘explicitly . . . or at a minimum inherently’ discloses a database.” Opp. 6.
In support of Liberty’s position, Mr. Andrews testified, in his initial
declaration filed with the petition, that Nakagawa’s disclosure would have
been “understood by one skilled in the art as indicating a database” and
“[a] person of ordinary skill in the art would understand that such a database
is inherently searchable to permit pertinent data to be retrieved.” Ex. 1014
¶ 35 (emphasis added).
In its patent owner response, Progressive argues that Nakagawa does
not disclose the “database” limitation based on the premise that Nakagawa’s
“onboard vehicle data is processed in the onboard apparatus 4 into points
reflecting the degree of safety or danger it represents.” PO Resp. 54; see
also id. at 49. The rebuttal declaration of Mr. Andrews (Ex. 1023), which
explains that the “user data” is stored in the memory provided inside control
part 22 on the server side, was filed properly to rebut Progressive’s argument
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made in the patent owner response (PO Resp. 54; see also id. at 49).
Progressive has not demonstrated that the rebuttal declaration of
Mr. Andrews exceeds the proper scope of reply evidence. Accordingly, we
are not persuaded by Progressive’s argument that the rebuttal declaration of
Mr. Andrews (Ex. 1023) should be excluded.
3. Belatedly-introduced issues as to priority
Progressive seeks to exclude the rebuttal declarations of Mr. Andrews
and Ms. O’Neil (1023 ¶¶ 31-33, 35; 1026 ¶¶ 35-38). PO Mot. 7-8.
Progressive argues that neither of Liberty’s expert offered any declaration to
support Liberty’s priority arguments with the petition and, therefore, the
rebuttal declarations attempted to introduce such support should be
excluded. Id.
Liberty opposes and argues that the rebuttal testimony was submitted
properly to rebut Progressive’s inherency argument (PO Resp. 6, 33, 37, 39).
Opp. 8-9. We are not persuaded by Progressive’s argument that the
declarations should be excluded. As explained by Liberty, its experts
responded to the inherency arguments made in the patent owner response
“by demonstrating that a [person with ordinary skill in the art] would not
have understood, at the time the ’650 application was filed, that the
disclosures identified by Progressive in its [patent owner response]
necessarily required each of the missing claim limitations.” Opp. 9 (citing
Ex. 1023 ¶¶ 31-33, 35; Ex. 1026 ¶¶ 35-38).
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Therefore, we agree with Liberty that its experts’ rebuttal declarations
(Ex. 1023 ¶¶ 31-33, 35; Ex. 1026 ¶¶ 35-38) were submitted properly to rebut
Progressive’s inherency arguments made in the patent owner response
(PO Resp. 6, 33, 37, 39). Progressive has not demonstrated that the rebuttal
declarations exceed the proper scope of reply evidence. Accordingly, we are
not persuaded by Progressive’s argument that the rebuttal declarations of
Mr. Andrews and Ms. O’Neil should be excluded.
4. Reliability of evidence
Progressive seeks to exclude Ms. O’Neil’s rebuttal declaration
concerning the testimony of Progressive expert, Mr. Miller, as unreliable,
pursuant to Federal Rule of Evidence 702. PO Mot. 8-9 (citing Ex. 1026
¶ 8, 16, 35). Progressive argues that Ms. O’Neil’s declaration
“mischaracterizes” Mr. Miller’s declaration as requiring actual claims loss
data to generate actuarial classes. Id. In support of its arguments,
Progressive notes that Mr. Miller’s declaration does not use the phrase
“actual claims data,” and that the Statement of Principles cited by Mr. Miller
(Ex. 2011 ¶ 15) makes it clear that actuarial classification may be based on
data other than actual claims loss data. Mot. 9. Progressive further submits
that Ms. O’Neil attempted to discredit Mr. Miller’s opinion with regard to
the term “rating factor.” PO Mot. 10.
The reasoning articulated by Progressive is insufficient to have
Ms. O’Neil’s testimony excluded as unreliable. The Board is capable of
taking into account the baselessness of a witness’s testimony, if any, when
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weighing all of the testimony of the witness. We agree with Liberty that
“the Board, sitting as a non-jury tribunal with administrative expertise, is
well-positioned to determine and assign appropriate weight to the evidence
presented in this trial, without resorting to formal exclusion that might later
be held reversible error.” Mot. 1 (citing e.g., S.E.C. v. Guenthner, 395 F.
Supp. 2d 835, 842 n.3 (D. Neb. 2005)). There is a strong public policy for
making all information filed in a quasi-judicial administrative proceeding
available to the public, especially in a covered business method patent
review, which determines the patentability of claims in an issued patent.
To that end, we generally will exercise our discretion to accord evidence the
appropriate weight, if any, rather than exclude particular pieces of evidence.
See, e.g., Donnelly Garment Co. v. NLRB, 123 F.2d 215, 224 (8th Cir. 1942)
(“One who is capable of ruling accurately upon the admissibility of evidence
is equally capable of sifting it accurately after it has been received.”).
For the foregoing reasons, we are not persuaded by Progressive’s
argument that Ms. O’Neil’s testimony (citing Ex. 1026 ¶ 8, 16, 35) should
be excluded.
III. CONCLUSION
Liberty has met its burden of proof, by a preponderance of the
evidence, in showing that claims 1-78 of the ’598 patent are unpatentable
based on the following grounds of unpatentability:
A. Claims 1-78 are unpatentable under 35 U.S.C. § 102 as being
anticipated by Burge;
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B. Claims 1-78 are unpatentable under 35 U.S.C. § 102 as being
anticipated by Nakagawa;
C. Claims 16, 17, 63, and 64 are unpatentable under 35 U.S.C. § 103(a)
over Burge in view of Herrod; and
D. Claim 47 is unpatentable under 35 U.S.C. § 103(a) over Nakagawa in
view of Herrod.

IV. ORDER
In consideration of the foregoing, it is
ORDERED that claims 1-78 of the ’598 patent are held unpatentable;
FURTHER ORDERED that Liberty’s Motion to Exclude Evidence is
denied;
FURTHER ORDERED that Progressive’s Motion to Exclude
Evidence is denied; and
FURTHER ORDERED that because this is a final written decision,
parties to the proceeding seeking judicial review of the decision must
comply with the notice and service requirements of 37 C.F.R. § 90.2.

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PETITIONER:

J. Steven Baughman
James R. Myers
Nicole M. Jantzi
ROPES & GRAY LLP
steven.baughman@ropesgray.com
james.myers@ropesgray.com
nicole.jantzi@ropesgray.com

PATENT OWNER:

Calvin P. Griffith
James L. Wamsley, III
John V. Biernacki
JONES DAY
cpgriffith@jonesday.com
jlwamsleyiii@jonesday.com