Trials@uspto.gov
`571-272-7822
`
`
`
` Paper 10
`
`Entered: January 25, 2013
`
`
`
`
`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 CBM2012-00002 (JL)
`Patent 6,064,970
`____________
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`CHANG, Administrative Patent Judge
`
`
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`571-272-7822
`
`
`
` Paper 10
`
`Entered: January 25, 2013
`
`
`
`
`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 CBM2012-00002 (JL)
`Patent 6,064,970
`____________
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`CHANG, Administrative Patent Judge
`
`
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`I. BACKGROUND
`
`On September 16, 2012, Liberty Mutual Insurance Company
`
`(“Liberty”) filed a petition requesting a review under the transitional
`
`program for covered business method patents of U.S. Patent 6,064,970 (“the
`
`’970 patent”). The patent owner, Progressive Casualty Insurance Company
`
`(“Progressive”), filed a preliminary response on December 21, 2012. (Paper
`
`No. 8.) We have jurisdiction under 35 U.S.C. § 324. See section 18(a) of
`
`the Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat. 284, 329
`
`(2011) (“AIA”).
`
`The standard for instituting a covered business method review is set
`
`forth in 35 U.S.C. § 324(a), which provides as follows:
`
`THRESHOLD --The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is
`more likely than not that at least 1 of the claims challenged in
`the petition is unpatentable.
`
`Liberty challenges the patentability of claims 1 and 3-18 of the
`
`’970 patent. Taking into account Progressive’s preliminary response, we
`
`determine that the information presented in the petition demonstrates that it
`
`is more likely than not that the challenged claims are unpatentable. Pursuant
`
`to 35 U.S.C. § 324 and section 18(a) of the AIA, we hereby authorize a
`
`cover business method review to be instituted as to claims 1, 3-6, and 9-18
`
`of the ’970 patent.
`
`2
`
`
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`Case CBM2012-00002
`Patent 6,064,970
`
`A. Liberty’s standing
`
`Liberty certifies that the ’970 patent was asserted against it in Case
`
`No. 1:10-cv-01370, Progressive Cas. Ins. Co. v. Safeco Ins. Co. of Ill. et al.,
`
`pending in the U.S. District Court for the Northern District of Ohio. (Pet. 5.)
`
`Progressive does not dispute that certification.
`
`B. Covered Business Method Patent
`
`Under section 18(a)(1)(E) of the AIA, the Board may institute a
`
`transitional proceeding only for a patent that is a covered business method
`
`patent. Section 18(d)(1) of the AIA defines the term “covered business
`
`method patent” to mean:
`
`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.
`
`The legislative history explains that the definition of covered business
`
`method patent was drafted to encompass patents “claiming activities that are
`
`financial or complementary to financial activity.” 157 Cong. Rec. S5432
`
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer).
`
`Section 18(d)(2) of the AIA provides that “the Director shall issue
`
`regulations for determining whether a patent is for a technological
`
`invention.” The legislative history points out that the regulation for this
`
`determination should only exclude “those patents whose novelty turns on a
`
`technological innovation over the prior art and are concerned with a
`
`3
`
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`Case CBM2012-00002
`Patent 6,064,970
`
`technical problem which is solved with a technical solution and which
`
`requires the claims to state the technical features which the inventor desires
`
`to protect.” 157 CONG. REC. S1364 (daily ed. Mar. 8, 2011) (statement of
`
`Sen. Schumer).
`
`Pursuant to that statutory mandate, the Office promulgated 37 C.F.R.
`
`§ 42.301(b) to define the term “technological invention” for the purposes of
`
`the Transitional Program for Covered Business Method Patents. Therefore,
`
`for determining whether a patent is for a technological invention in the
`
`context of the Transitional Program for Covered Business Method Patents,
`
`37 C.F.R. § 42.301(b) identifies the following for consideration:
`
`whether the claimed subject matter as a whole recites a
`technological feature that is novel and unobvious over the prior
`art; and solves a technical problem using a technical solution.
`
`In the petition, Liberty asserts that the ’970 patent is a covered
`
`business method patent because the ’970 claimed invention is related to the
`
`administration and management of an insurance policy to adjust insurance
`
`premiums based on monitored vehicle data. (Pet. 3.) Liberty further
`
`contends that the claimed invention of the ’970 patent is not a “technological
`
`invention” as defined in 37 C.F.R. § 42.301(b). (Pet. 4.) According to
`
`Liberty, the prosecution history of the prior reexamination shows that there
`
`was no “technological feature” that was novel and unobvious, and the
`
`subject matter as a whole does not solve a “technical problem.” (Pet. 4-5.)
`
`Progressive counters that the claimed invention of the ’970 patent is a
`
`“technological invention” and, therefore, the ’970 patent is ineligible for
`
`4
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`covered business method review. (PR 50.) More specifically, Progressive
`
`argues that the claimed invention is similar to the credit card reader example
`
`provided in the Office Patent Trial Practice Guide,1 which the Office
`
`indicates would not be eligible for a covered business method review. (PR
`
`52-55.) Progressive also asserts that the claimed invention is more technical
`
`than a credit card reader since it includes physical sensors for sensing actual
`
`vehicle operation data. (Id.) Progressive further argues that the claimed
`
`subject matter as a whole recites a technological feature that is novel and
`
`unobvious over the prior art citing to the reasons for patentability provided
`
`by the Examiner in the prior ex parte reexamination (NIIRC at pages 9-22).
`
`(PR 56-63.) Additionally, Progressive contends that the claimed subject
`
`matter as a whole solves a technical problem using a technical solution
`
`because sensor data representing actual monitored driving characteristics of
`
`an operating state of vehicles or actions of operators is used to determining
`
`an insurance rating, solving the problem of the unavailability of such data.
`
`(PR 54-58.)
`
`We are not persuaded by Progressive’s arguments. Rather, we
`
`determine that Liberty has demonstrated that the ’970 patent is a covered
`
`business method patent and the claimed invention is not a “technological
`
`invention” within the meaning of 37 C.F.R. § 42.301(b).
`
`The determination of whether a patent is eligible for covered business
`
`method review is based on what the patent claims. In other words, a patent
`
`
`
`1 Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48764 (Aug. 14,
`2012).
`
`5
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`having one claim directed to a covered business method is eligible for
`
`review even if the patent includes additional claims.2
`
`Here, the ’970 patent discloses an invention that is related to a method
`
`of determining a cost of automobile insurance based upon monitoring,
`
`recording and communicating data representative of operator and vehicle
`
`driving characteristics. (Abs.) Claim 4, reproduced below, is illustrative of
`
`the claimed subject matter:
`
`A method of insuring a vehicle operator for a selected
`period based upon operator driving characteristics during the
`period, comprising, steps of:
`
`generating an initial operator profile;
`
`generating an insured profile for the vehicle operator
`prior to any monitoring of any of the vehicle operator’s driving
`characteristics wherein the insured profile comprises coverage
`information, including limits and deductibles, for determining a
`base cost of vehicle insurance for the vehicle operator;
`
`monitoring the vehicle operator’s driving characteristics
`during the selected period; and
`
`deciding a total cost of vehicle insurance for the selected
`period based upon the vehicle operator’s driving characteristics
`monitored in that selected period and the base cost of
`insurance.3
`
`
`
`
`
`2 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) (Response to Comment 8).
`3 Reexam. Cert. at col. 1:50-65 (original emphases and bracketed
`matters omitted).
`
`6
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`For the issue of whether the claimed invention is a technological
`
`invention under 37 C.F.R. § 42.301(b), we focus our analysis on claim 4.
`
`We first note that Progressive’s contentions are not commensurate with the
`
`scope of claim 4. Notably, the sensors for monitoring the vehicle operator’s
`
`driving characteristics are described in the ’970 specification, but are not
`
`recited in claim 4. In fact, claim 4 does not recite any technological element
`
`(e.g., a computer or electrical sensors), but rather only recites method steps
`
`that can be completed by a person. For example, a passenger sitting in the
`
`vehicle when the vehicle operator is driving can monitor the vehicle
`
`operator’s driving characteristics during the selected time period (e.g., the
`
`passenger can observe whether the vehicle operator is driving over the speed
`
`limit or fails to stop at a red traffic light). Progressive fails to point out any
`
`specific novel and non-obvious technological element recited in claim 4.
`
`Therefore, Progressive’s arguments related to the credit card reader example
`
`in the Office Patent Trial Practice Guide are misplaced.
`
`As to Progressive’s contentions regarding the Examiner’s reasons for
`
`patentability for claim 4 in the prior ex parte reexamination, Progressive
`
`merely relies upon the Examiner’s statements that the prior art cited in the
`
`reexamination does not disclose the insured-profile claim limitation
`
`(generating an insured profile prior to any monitoring of any of the vehicle
`
`operator’s driving characteristics). (PR 49-50.) However, that claim
`
`limitation does not require a technological feature. Indeed, a person can
`
`generate an insured profile by writing down on a paper the value of the
`
`7
`
`
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`Case CBM2012-00002
`Patent 6,064,970
`
`vehicle, insurance coverage limits, and deductibles, before a passenger
`
`monitors the vehicle operator’s driving characteristics.
`
`We are also not convinced by Progressive’s argument that the claimed
`
`subject matter as a whole solves a technical problem using a technical
`
`solution. The ’970 specification expressly states that the motor vehicle
`
`control and operating systems that were known in the art at the time of the
`
`invention could readily be modified to obtain the desired types of
`
`information relevant to determination of the cost of insurance. (Col. 3:25-
`
`28.) Determining a cost of vehicle insurance is a financial problem rather
`
`than a technical problem.
`
`For the foregoing reasons, the subject matter of claim 4 is not a
`
`“technological invention” under 37 C.F.R. § 42.301(b). Accordingly, the
`
`’970 patent is eligible for a covered business method review.
`
`C. Prior Art Relied Upon
`
`Liberty relies upon the following prior art references:
`
`June 30, 1992
`JP-H4/182868
`GB-2 286 369 A Aug. 16, 1995
`
`Kosaka
`Herrod
`
`1988 Automobile Insurance Shoppers’ Guide, published in 1988
`(“Florida Guide”) (Ex. 1005)
`
`(Ex. 1004)
`(Ex. 1007)
`
`1995 Consumers Guide on Automobile Insurance (Downstate),
`published in 1995 (“New York Guide”) (Ex. 1006)
`
`“An Interest in Black Magic – Motor Technology,” Jan. 1, 1994 in
`Insurance Age Magazine (“Black Magic”) (Ex. 1008)
`
`
`8
`
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`Case CBM2012-00002
`Patent 6,064,970
`
`D. Grounds of Challenge
`
`Claims 1, 4, 5, 6, and 18 are independent claims. Liberty seeks
`
`cancelation of claims 1 and 3-18 based on the following grounds:
`
`A. Claims 4, 5, 16, and 17 are anticipated under 35 U.S.C. § 102 by
`
`Kosaka;
`
`B. Claims 4, 5, 16, and 17 are unpatentable under 35 U.S.C. § 103(a)
`
`over Kosaka in view of Florida Guide or New York Guide;
`
`C. Claims 1, 3, 11-12, and 14-15 are unpatentable under 35 U.S.C.
`
`§ 103(a) over Kosaka and Black Magic in view of Herrod or New
`
`York Guide.
`
`D. Claims 6-10, 13, and 18 are unpatentable under 35 U.S.C. § 103(a)
`
`over Kosaka in view of Herrod or New York Guide.
`
`
`
`II. FINDINGS OF FACTS
`
`
`
`The findings of fact in this decision including those in the analysis are
`
`supported by a preponderance of the evidence.
`
`
`
`A. Background of The ’970 Patent
`
`The background section of the ’970 patent describes conventional
`
`insurance schemes that use actuarial classes to determine vehicle insurance
`
`costs. (Col. 1:17-2:37.) In particular, the background section of the ’970
`
`patent discloses that conventional insurance cost determination methods
`
`involve generating an insured profile for the vehicle operator by gathering
`
`relevant historical data from a personal interview and public motor vehicle
`
`9
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`Case CBM2012-00002
`Patent 6,064,970
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`driving records. (Col. 1:17-col. 2:37.) The data results in a classification of
`
`the vehicle operator to a broad actuarial class for which insurance rates are
`
`assigned based upon the empirical experience of the insurer. (Col. 1:22-24.)
`
`The conventional insurance system creates groupings of vehicles and drivers
`
`(actuarial classes) based on certain types of classifications (e.g., speeding or
`
`other traffic violations and number of accidents). (Col. 1:21-27; col. 2:1-4.)
`
`The classifications are further broken into actuarial classes to develop a
`
`unique vehicle insurance cost based on the specific combination of actuarial
`
`classes for a particular risk. (Col. 1:53-56.) Based on the information in the
`
`insured profile (e.g., the value of the vehicle, driver’s record, and type of
`
`coverage), a unique vehicle insurance cost is determined. (Col. 1:56-col.
`
`2:12.) Additionally, conventional insurance rating systems provide
`
`discounts and surcharges for certain types of use of the vehicle, equipment
`
`on the vehicle, and type of driver. (Col. 2:22-24.) For example, discounts
`
`are provided to safe drivers, such as those that have low number of speeding
`
`violations or accidents. (Col. 1:17-col. 2:37.)
`
`B. Kosaka
`
`Kosaka’s invention is related to an insurance premium determination
`
`device that increases or decreases insurance premiums by continually
`
`determining insurance premium changes through the detection of states that
`
`lead to risk in the insurance customer. (P. 2, col. 1:54-col. 2:1-3; col. 2:43-
`
`10
`
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`Case CBM2012-00002
`Patent 6,064,970
`
`52.4) Kosaka’s insurance premium determination device employs a risk
`
`evaluation device for evaluating risk in the vehicle and driver. Id. Kosaka’s
`
`insurance premium determination system “allows risk evaluations that
`
`change from hour to hour during travel to be reflected in the insurance
`
`premium.” (P. 7, col. 2:21-25.) Figure 1 of Kosaka, reproduced below,
`
`illustrates one of Kosaka’s embodiments:
`
`
`
`Figure 1 shows a configuration diagram of Kosaka’s system
`
`Referring to figure 1, the external sensor 1 and internal sensor 2 detect
`
`the states of the driver and vehicle that contribute to risk (e.g., speed). (P. 3,
`
`col. 1:4-18; p. 4, col. 2:4-17.) The fuzzy logic part 3 evaluates risk based on
`
`the states of the driver and vehicle. (P. 3, col. 2:23-30; p. 4, col. 2:18-20.)
`
`Specifically, the outputs from sensors 1 and 2 are used as input values to the
`
`fuzzy logic part 3. (P. 4, col. 2:18-19.) The risk evaluation values
`
`
`4 As Kosaka is a Japanese Unpublished Application, the citations to Kosaka
`are to the Certified English-Language Translation provided by Liberty in
`Exhibit 1004. The page numbers refer to those that appear on the top center
`of each page, and not the exhibit page numbers that appear on the bottom
`right corner.
`
`11
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`Case CBM2012-00002
`Patent 6,064,970
`
`determined by the fuzzy logic may be stored in the fuzzy memory 4. (P. 4,
`
`col. 2:24-26.) The detection of the states that contribute to risk and the
`
`evaluation of risk are carried out in real time. (P. 4, col. 1:30-34.)
`
`Kosaka’s system further includes a premium calculation part 6 that
`
`uses the risk evaluation values to determine and insurance adjustments.
`
`(P.4, col. 2:26-30.) The premium calculation part 6 performs temporal
`
`integration and computation of risk evaluation values, and calculates
`
`insurance premiums. (P. 4, col. 2:26-29.) System 5 is connected to the
`
`premium calculation part 6 to perform time integration. (P. 4, col. 2:31-33.)
`
`A determination of the insurance adjustment is also performed in real time.
`
`(P. 4, col. 1:30-34.) Kosaka’s system further includes: (1) an output
`
`interface 7 that has an electronic currency transfer request means or a
`
`prepayment amount erasing means; and (2) a monetary amount file part 8
`
`that stores prepayment balance. (P. 4, col. 2:33-38.)
`
`C. Herrod
`
`
`
`Herrod discloses a computer-based monitoring and reporting device
`
`that is used in a vehicle to measure driver acceleration patterns and report
`
`associated accident risks. (P. 1-25.) Herrod’s device uses the measured
`
`acceleration data to classify the driver into one of several groups, each of
`
`which associates with a different level of accident risk. (Id.) According to
`
`Herrod, safe drivers can use the measured acceleration data to demonstrate
`
`
`
`5 The page numbers refer to the original page numbers of the references, and
`not the exhibit page numbers on the bottom right corner.
`12
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`Case CBM2012-00002
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`
`their competence to insurance companies. (P. 1.)
`
`D. Florida Guide
`
`
`
`The Florida Guide is an automobile insurance shoppers’ guide that is
`
`designed to help insurance policy holders control some of the costs
`
`associated with automobile insurance. (Title and Comm. Message.)
`
`According to the Florida Guide, all drivers in the state of Florida must carry
`
`a minimum amount of property damage liability coverage in addition to the
`
`required personal injury protection coverage. (P. 3.) Further, auto insurance
`
`premium may vary based on many factors such as the type of coverage the
`
`policy holder selects, including liability limits and deductibles (p. 11), and
`
`the area where the policy holder garages their car (p. 13). For example, if
`
`the policy holder selects high liability limits and low deductibles, the policy
`
`holder is likely to pay more for auto insurance. (P. 11.) Different premiums
`
`are charged in different areas because of frequency of accidents, medical
`
`expenses and repair coast. (P. 13.)
`
`E. New York Guide
`
`The New York Guide is a consumer guide on automobile insurance.
`
`In particular, the New York Guide provides ways that the insurance holders
`
`may save money on auto insurance, such as increasing the deductibles on
`
`physical damage coverage. (P. 17-19.)
`
`F. Black Magic
`
`
`
`Black Magic discloses a computer-implemented unit installed in a
`
`13
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`Case CBM2012-00002
`Patent 6,064,970
`
`vehicle to record information such as driving speed, time, and distance
`
`travelled. (P1.) When the unit is used with a Global Positioning System that
`
`can also record the vehicle’s location, the information could be utilized to
`
`calculate insurance premiums according to styles of driving and locality of
`
`use. (P2.)
`
`
`
`III. PRINCIPLES OF LAW
`
`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
`
`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 skill in the art, and (4) where in evidence, so-called
`
`secondary considerations. Graham v. John Deere Co. of Kansas City, 383
`
`U.S. 1, 17-18 (1966).
`
`
`
`
`
`14
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`Case CBM2012-00002
`Patent 6,064,970
`
`IV. 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). Thus, we determine the
`
`scope of the claims by giving claim terms their broadest reasonable
`
`construction in light of the specification as it would be interpreted by one of
`
`ordinary skill in the art. Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed.
`
`Cir. 2005) (en banc).
`
`Here, Liberty states that for the sole purposes of this proceeding, it
`
`construes the claim language such that claim terms are given their broadest
`
`reasonable interpretation, based upon the interpretation given by the Office
`
`during the prior ex parte reexamination of the ’970 patent (Control
`
`No. 90/011,252). (Pet. 20.) Specifically, Liberty lists several key terms and
`
`their constructions (reproduced in the table below) as applied during the
`
`prior reexamination. (Pet. 21-23.)
`
`Progressive does not oppose those claim constructions. Upon review
`
`of the record, Liberty’s claim constructions seem to be consistent with the
`
`specification. Further, in the prior reexamination, the Office gave the claim
`
`terms their broadest reasonable construction consistent with the
`
`specification. See e.g., Ex. 1003 at 755, 3/7/11 OA at 6. Based on the
`
`record before us, we therefore adopt the constructions provided by Liberty in
`
`the petition.
`
`
`
`15
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`
`Claim Term
`
`Construction
`
`Vehicle
`(claims 1, 3-18)
`
`Initial operator profile/ initial
`insured profile
`(claims 4-5, 16-17)
`
`Actuarial class
`(claims 1,3, 6-15, 18)
`
`Cost of insurance/cost of
`vehicle insurance
`(claims 1, 3-5, 16-17)
`
`Operator controlled motor vehicles
`normally requiring insurance, including,
`but not limited to, automobiles
`
`Initial files or information with respect to
`the operator or the insuring thereof
`
`A combination/group/groupings related to
`loss/risk/safety which are determined from
`classifications/characteristics
`representative of motor vehicle operational
`characteristics and driver behavior for
`which data is gathered
`
`A/one or more or all cost(s) associated
`with insurance of the vehicle, including,
`but not limited to, a cost to the insured
`and/or insurer/underwriter associated with
`the insurance
`
`Safety standard
`(claims 5, 10-11, 13-14, 16-18)
`
`Value/criteria associated with the
`promotion of safety/prevention of
`risk/loss/injury
`
`Base cost
`(claims 4-5, 16-17)
`
`Extracting
`(claims 6-15, 18)
`
`Insurance rating
`(claims 6, 9, 18)
`
`A/one or some cost(s), e.g., not all costs or
`the final or total cost or gross premium,
`associated with insurance of the vehicle,
`e.g., a cost to the insured and/or
`insurer/underwriter associated with the
`insurance
`Collecting, deriving, generating or
`calculating
`A/some value/cost used to determine an
`overall cost associated with insurance of
`the vehicle
`
`16
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`Storing and transmitting a
`signal corresponding to the
`determined triggering event to
`a receiving system
`(claim 7)
`
`
`
`
`Storing of information corresponding to
`the event and transmitting of a
`signal/information corresponding to the
`event to a receiving system which system
`may or may not be remote.
`
`B. Claims 4, 5, 16, and 17
`
`Claims 4 and 5 are independent claims, and claims 16 and 17 depend
`
`from claim 5. Claim 4, reproduced below, is representative:
`
`A method of insuring a vehicle operator for a selected
`period based upon operator driving characteristics during the
`period, comprising, steps of:
`
`generating an initial operator profile;
`
`generating an insured profile for the vehicle operator
`prior to any monitoring of any of the vehicle operator’s driving
`characteristics wherein the insured profile comprises coverage
`information, including limits and deductibles, for determining a
`base cost of vehicle insurance for the vehicle operator;
`
`monitoring [operator] the vehicle operator’s driving
`characteristics during the selected period; and
`
`deciding a total cost of vehicle insurance for the selected
`period based upon the [operating] vehicle operator’s driving
`characteristics monitored in that selected period and the base
`cost of insurance.6
`
`Liberty alleges that claims 4, 5, 16, and 17 are unpatentable under 35
`
`U.S.C. § 103(a) over Kosaka in view of Florida Guide or New York Guide.
`
`
`
`6 Reexam. Cert. at col. 1:50-65.
`
`17
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`(Pet. 41-51, 65, and 66.) In particular, Liberty contends that the cited prior
`
`art references describe all of the claim elements. (Pet. 34-38.) Liberty
`
`further provides the rationales for combining the references. (Pet. 28-34.)
`
`Progressive disagrees and counters that the cited prior art references
`
`fail to describe the insured-profile claim limitation (“generating an insured
`
`profile for the vehicle operator prior to any monitoring of any of the vehicle
`
`operator’s driving characteristics wherein the insured profile comprises
`
`coverage information, including limits and deductibles, for determining a
`
`base cost of vehicle insurance for the vehicle operator”), and the total-cost
`
`claim limitation (“deciding a total cost of vehicle insurance for the selected
`
`period based upon the vehicle operator’s driving characteristics monitored in
`
`that selected period and the base cost of insurance”), as recited in claim 4.
`
`(PR 33-38.) Specifically, Progressive argues that “the Kosaka prepayment
`
`amount is not a base cost of insurance but a deposit amount from which
`
`future insurance charges are subtracted.” (PR 35.)
`
`We do not agree with Progressive since its arguments are based on an
`
`overly narrow reading of the prior art references without sufficient
`
`consideration of the knowledge of one with ordinary skill in the art. We
`
`note that an obviousness analysis “need not seek out precise teachings
`
`directed to the specific subject matter of the challenged claim, for a court
`
`can take account of the inferences and creative steps that a person of
`
`ordinary skill in the art would employ.” KSR, 550 U.S. at 418; In re
`
`Translogic Tech., 504 F.3d 1249, 1259 (Fed. Cir. 2007). Prior art references
`
`must be “considered together with the knowledge of one of ordinary skill in
`
`18
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`the pertinent art.” In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
`
`Moreover, “it is proper to take into account not only specific teachings of the
`
`references but also the inferences which one skilled in the art would
`
`reasonably be expected to draw therefrom.” In re Preda, 401 F.2d 825, 826
`
`(CCPA 1968).
`
`On this record, the evidence shows that the knowledge level of one
`
`with ordinary skill in the art is quite advanced.7 For instance, conventional
`
`insurance schemes that use actuarial classes to determine vehicle insurance
`
`costs were well known in the art at the time of the invention. (See e.g.,
`
`PR 13-14; 39.) Further, we agree with Progressive that the Florida Guide
`
`and New York Guide cited by Liberty discuss the same conventional prior
`
`art knowledge that is disclosed in the background section of the ’970 patent.
`
`(See e.g., PR 13-14 (The Florida Guide and New York Guide “discuss the
`
`same subject matter (i.e., the existence of traditional actuarial classes) that is
`
`disclosed in the background section of the ’970 patent”); PR 39 (The cited
`
`portions of the Florida Guide are “essentially identical to the prior art
`
`
`
`7 The field of the ’970 patent is insurance which includes determining a cost
`of vehicle insurance based on telematics data. Ex 1009, ¶ 17; Ex 1012, ¶ 17.
`A person of ordinary skill in the art as to insurance pricing would have at
`least a B.S. in Mathematics, or equivalent, with at least 5 years of experience
`in the insurance industry setting premiums for auto insurance, and as an
`associate in the Casualty Actuarial Society. Ex 1009, ¶ 17. A person of
`ordinary skill in the art as to telematics data would have at least a B.S.
`degree in electrical engineering, computer engineering, computer science or
`the equivalent thereof and at least one to two years of experience with
`vehicle telematics systems. Ex 1012, ¶ 17.
`19
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`knowledge disclosed in columns 1 and 2 of the ’970 patent.”)) We therefore
`
`conclude that the background section of the ‘970 patent (specifically col.
`
`1:17-2:37) is admitted conventional prior art. In re Nomiya, 509 F.2d 566,
`
`571 (CCPA 1975). And thus the knowledge of one with ordinary skill in the
`
`art would include a thorough understanding of using actuarial classes to
`
`determine vehicle insurance costs.
`
`We regard the conventional insurance cost determination techniques
`
`noted in the background section of the ’970 patent (col. 1:17-2:37) as basic
`
`knowledge within the level of ordinary skill in the art. Hence, a person of
`
`ordinary skill in the art would have appreciated that when a vehicle operator
`
`is applying for an insurance policy from an insurance company, an insured
`
`profile for the vehicle operator would be generated to determine a base cost
`
`(a unique vehicle insurance cost), and such an insured profile includes
`
`coverage information such as limits and deductibles. We also observe that a
`
`person of ordinary skill in the art would have recognized that the base cost is
`
`the amount that the insurance company charges prior to applying any
`
`discounts or surcharges, and the total cost is calculated based on the base
`
`cost and any applicable discounts or surcharges.
`
`Although Kosaka’s prepayment amount is a deposit amount, one of
`
`ordinary skill in the art would have comprehended that insurance companies
`
`would want to make the prepayment amount equal to the base cost of
`
`insurance when utilizing Kosaka’s insurance premium determination device.
`
`This is so because the base cost is the amount that the policy holder is
`
`obligated to pay the insurance company initially before any monitoring of
`
`20
`
`
`
`Case CBM2012-00002
`Patent 6,064,970
`
`the vehicle operator’s driving characteristics. See KSR, 550 U.S. at 421, (“A
`
`person of ordinary skill is also a person of ordinary creativity, not an
`
`automaton.”).
`
`For the foregoing reasons, we conclude that Liberty’s petition has
`
`demonstrated that it is more likely than not that claim 4 would have been
`
`obvious over Kosaka and the Florida Guide. As to claims 5, 16, and 17,
`
`Progressive relies upon the same arguments presented with regard to
`
`claim 4. (PR 42-43, 50.) The explanations provided by Liberty as to how
`
`each element of those claims is met by the cited prior art references appear
`
`to have merit and are otherwise unrebutted. Therefore, we likewise
`
`conclude that Liberty has demonstrated that it is more likely than not that
`
`claims 5, 16, and 17 are unpatentable over the same prior art of record.
`
`C. Claims 1 and 3
`
`Claim 1, reproduced below, is representative:
`
`A method of generating a database comprising data
`elements representative of operator or vehicle driving
`characteristics, the method comprising:
`
`generating acturial [sic] classes of insurance, which
`group operators or vehicles having a similar risk
`characteristic, from actual monitored driving characteristics
`during a selected time period as represented by recorded data
`elements representative of an operating state of the vehicles or
`an action of the operators; and
`
`monitoring a plurality of the data elements representative
`of an operating state of a vehicle or an action of [the] an
`operator during a lat
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