UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`LIBERTY MUTUAL INSURANCE CO.
`Petitioner
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`v.
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`PROGRESSIVE CASUALTY INSURANCE CO.
`Patent Owner
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`Case CBM2012-00002
`Patent 6,064,970
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`PATENT OWNER’S OPPOSITION TO LIBERTY’S
`MOTION TO EXCLUDE EVIDENCE
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`CLI-2150159v2
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`—————————————
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`LIBERTY MUTUAL INSURANCE CO.
`Petitioner
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`v.
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`PROGRESSIVE CASUALTY INSURANCE CO.
`Patent Owner
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`—————————————
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`Case CBM2012-00002
`Patent 6,064,970
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`—————————————
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`PATENT OWNER’S OPPOSITION TO LIBERTY’S
`MOTION TO EXCLUDE EVIDENCE
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`CLI-2150159v2
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`Patent Owner Progressive Casualty Ins. Co. (“Progressive”) hereby opposes
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`Case CBM2012-00002
`Patent 6,064,970
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`the motion to exclude filed by Liberty Mutual Insurance Co. (“Liberty”). (Paper
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`No. 48.)
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`I.
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`SUMMARY OF ARGUMENT
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`Liberty has failed to demonstrate good cause to exclude evidence introduced
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`by Progressive. Liberty bases its motion on a misunderstanding of the facts and a
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`misapprehension of the law. The attacks lodged by Liberty in its motion go to the
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`sufficiency of the Progressive evidence in question, not to its admissibility, and
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`Liberty’s motion to exclude should therefore be denied.
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`II. LEGAL STANDARD
`A. Not Proper To Argue Weight Of Evidence In Motion To Exclude
`“A motion to exclude must explain why the evidence is not admissible (e.g.,
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`relevance or hearsay)[.]” 77 Fed. Reg. 48,756, 48,767 (Aug. 14, 2012). However,
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`the Office Patent Trial Practice Guide makes clear that such a motion to exclude
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`“may not be used to challenge the sufficiency of the evidence to prove a particular
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`fact.” Id. (emphasis added). Indeed, as set forth in the caselaw cited by Liberty,
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`the “sufficiency of evidence relates not to admissibility but to the weight of the
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`evidence and is a matter for the trier of fact to resolve.” SEC v. Guenthner, 395 F.
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`Supp. 2d 835, 842 n.3 (D. Neb. 2005) (emphasis added).
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`CLI-2150159v2
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`1
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`Case CBM2012-00002
`Patent 6,064,970
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`Liberty Argues That Progressive’s Evidence Should Be Admitted
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`B.
`Notwithstanding that Liberty is moving to exclude evidence, it spends
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`several pages of its seven-page motion setting forth caselaw for the proposition
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`that the Board should not exclude evidence. (Motion at 1-3.) Indeed, Liberty
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`claims that there is no “need for formal exclusion,” and it is “better for the Board”
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`to admit evidence “than to exclude particular pieces.” (Motion at 1, 2.)
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`Progressive does not concede or agree that Liberty’s characterization of the law
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`applies in all instances, such as where new evidence is improperly submitted with a
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`reply brief or cross-examination of a witness indicates that his or her prior
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`testimony was unreliable. Nevertheless, since Liberty has not argued that, in
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`evaluating Progressive’s evidence, there is any reason to depart from the general
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`principles favoring the admission of evidence, its motion should be denied under
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`the very caselaw it cites.
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`III. ARGUMENT
`A. Liberty Claims Erroneously That Dr. Ehsani
`Improperly Opines As To Insurance Issues
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`Liberty has failed to satisfy its burden of showing good cause that portions
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`of Progressive’s expert Dr. Mark Ehsani’s declaration (Exhibit 2016) should be
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`excluded. As demonstrated below, Liberty’s argument is based on its erroneous
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`characterization as to Dr. Ehsani’s opinions, and Dr. Ehsani properly provided
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`expert testimony as to the deficient disclosure in Kosaka.
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`CLI-2150159v2
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`2
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`Liberty claims erroneously that Dr. Ehsani provides expert testimony as to
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`Case CBM2012-00002
`Patent 6,064,970
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`“insurance issues.” (Motion at 5, emphasis in original.) To the contrary, Dr.
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`Ehsani relied on an opinion offered by Progressive’s other expert, Mr. Miller, as to
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`characteristics of an actuarial class. Dr. Ehsani plainly stated this assumption in
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`his declaration:
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`I have been asked to assume that an “actuarial class” has the following
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`characteristics: an actuarial class, or risk class, is a grouping of risks (i.e.,
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`insureds) with similar risk characteristics.
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`(Ex. 2016, at ¶ 33.) The underlying opinion was offered by Mr. Miller in his
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`declaration. (See Ex. 2010, at ¶ 16, “An actuarial class, or risk class, is a grouping
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`of risks (i.e., insureds) with similar risk characteristics[.]”)
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`In forming his opinions, Dr. Ehsani properly relied on Mr. Miller’s
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`description of an actuarial class. Indeed, Federal Rule of Evidence 703 expressly
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`states that “[a]n expert may base an opinion on facts or data in the case that the
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`expert has been made aware of[,]” as Dr. Ehsani has done. The caselaw is clear
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`that “under Rule 703” “an expert may rely upon another expert to form an
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`opinion[.]” See, e.g., Member Servs., Inc. v. Sec. Mut. Life Ins. Co., No. 3:06-cv-
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`1164 (TJM/DEP), 2010 WL 3907489, at *27 (N.D.N.Y. Sept. 30, 2010); see also
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`Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 286 F.R.D. 266, 271 (W.D. Pa.
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`CLI-2150159v2
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`3
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`2012) (“it is well-settled that one expert may rely upon another expert’s opinion in
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`Case CBM2012-00002
`Patent 6,064,970
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`formulating his own”).
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`Using Mr. Miller’s description of actuarial classes, Dr. Ehsani applied his
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`own expertise as to fuzzy logic and crisp logic. (See Ex. 2016, at ¶¶ 33-34.) He
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`explained that assigning an insured to an actuarial class involves crisp logic, not
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`fuzzy logic because “a single assignment” of an insured to an actuarial class
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`“generates only a single crisp value[.]” (Id. at ¶ 34.) By contrast, fuzzy logic
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`“uses multiple, partial values to show degrees of membership a variable of interest
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`might have for its membership functions” and “represent[s] [a] diametrically
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`opposite approach[]” from crisp logic.” (Id.)
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`Based on his own expertise and the assumption that an “actuarial approach”
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`involves “assignment to only one actuarial class for a particular risk category,” Dr.
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`Ehsani concluded that actuarial classes are a foreign concept to Kosaka. That is,
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`“an actuarial approach does not have a mechanism to generate multiple fuzzy
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`values such as the multiple fuzzy risk evaluation values of Kosaka[.]” (Id.) Dr.
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`Ehsani further concluded that “[i]t would constitute a fundamental change in
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`operation for an actuarial class approach to use the multiple, partial membership
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`assignment fuzzy risk evaluation values of Kosaka” and that the notion of such a
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`“selection of a fuzzy logic approach over a crisp actuarial class approach [would]
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`CLI-2150159v2
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`4
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`reflect[] not a general preference but rather a totally different philosophical
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`Case CBM2012-00002
`Patent 6,064,970
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`approach[.]” (Id.)
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`Liberty plucks the terms “‘philosoph[y]’ and ‘fundamental…operation’ of
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`‘actuarial approach’” from Dr. Ehsani’s declaration and then alleges that they
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`prove Dr. Ehsani is opining about “insurance aspects of the ‘970 patent” with “no
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`qualifications to do so.” (Motion at 5, emphasis removed.) A simple reading of
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`Dr. Ehsani’s declaration debunks this allegation, as demonstrated above. Mr.
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`Miller opined about insurance aspects, and Dr. Ehsani properly relied on that
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`pursuant to Rule 703 to opine on the fuzzy logic and crisp logic aspects.
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`The only other material Liberty cites in support of its argument is from the
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`Reply Declarations of its own witnesses, Andrews and O’Neil, but this is to no
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`avail. Liberty cites ¶ 8 from the Andrews Reply Declaration, in which he admits
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`he is not “qualified” to opine as to “insurance underwriting.” (Ex. 1019.) And,
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`Liberty cites ¶¶ 24-30 and 37 from the O’Neil Reply Declaration, in which she is
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`addressing Mr. Miller’s opinions. (Ex. 1022.) Indeed, it is a damning fact that
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`Liberty did not move to exclude any statement by Mr. Miller, but then asks the
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`Board to exclude a recitation of one of them when it is repeated by Dr. Ehsani in
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`stating his assumption.
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`Moreover, if Liberty wanted to explore Dr. Ehsani’s opinions and any
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`assumptions on which they are based, it could have deposed him. However,
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`CLI-2150159v2
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`5
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`Liberty noticed the deposition of Dr. Ehsani, but then chose never to conduct it.
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`Case CBM2012-00002
`Patent 6,064,970
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`(Paper No. 30.) Liberty has failed to show good cause that any portion of Dr.
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`Ehsani’s Declaration should be excluded.
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`B.
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`Liberty Claims Erroneously That Dr. Ehsani
`Failed To Provide Sufficient Underlying Facts Or Data
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`Liberty also argues that Dr. Ehsani failed to set forth a legitimate basis for
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`his opinions and ignores prior art. Liberty once again premises its argument on a
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`misapprehension of the law and has failed to satisfy its burden of showing good
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`cause to exclude evidence. Liberty relies on the caselaw proposition that a
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`POSITA “is presumed to know of all relevant prior art.” (Motion at 6 (emphasis in
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`original), citing Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454 (Fed.
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`Cir. 1985).) While this is a correct statement of law, Liberty goes astray when it
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`attempts to turn it into a rule of evidence requiring the exclusion of any expert who
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`is alleged to be not aware of every piece of prior art in existence, including prior
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`art not mentioned or asserted in an original petition and that is deliberately
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`withheld by a petitioner. No such rule of evidence exists.
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`More specifically, with its Reply, Liberty submitted seven new references to
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`combine with Kosaka (Exhibits 1020-1021 and 1024-1028), along with supporting
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`Reply Declarations from Andrews (Exhibit 1019 at ¶¶ 5-9) and O’Neil (Exhibit
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`1022, at ¶¶ 24, 26, 28, and 31), in an effort to state a prima facie case based on
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`CLI-2150159v2
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`6
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`Kosaka’s deficient disclosure. (See Paper No. 51, Progressive’s Motion to
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`Case CBM2012-00002
`Patent 6,064,970
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`Exclude, at 5-7; see also Liberty’s Motion at 7.) It was improper to introduce such
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`new unpatentability arguments and evidence in a Reply, and Progressive has
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`moved to exclude these new references and supporting declaration evidence. (See
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`Paper No. 51.) Liberty (in its Reply) tried to blame its tardy submission on
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`Progressive, claiming that Progressive had “ignore[d]” “relevant prior art” and
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`thus compelled Liberty to introduce it in its Reply. (Paper No. 33, Liberty’s Reply
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`at 5, emphasis added.) This is nothing more than a smokescreen to cover Liberty’s
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`improper introduction of new evidence with its Reply, as Progressive could not
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`have “ignored” these references since Liberty never submitted them with its
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`Petition.1
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`Liberty now rehashes this same ill conceived argument in its motion to
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`exclude, claiming Dr. Ehsani “ignore[d]” Liberty’s untimely references and that
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`Progressive should be penalized by having a portion of its expert’s opinions
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`1 Liberty’s own witnesses did not mention anything about these references in
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`any Petition submissions. Either Liberty and its witnesses knew about them and
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`concealed them from Progressive, or they did not know about them and Liberty’s
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`own witnesses would have to be excluded by virtue of Liberty’s newly-created
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`rule.
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`CLI-2150159v2
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`7
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`excluded. (Motion at 7.) Liberty’s argument provides neither a justification for
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`Case CBM2012-00002
`Patent 6,064,970
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`introducing new evidence and arguments in its Reply, nor a basis to exclude the
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`testimony of Dr. Ehsani. And, Liberty still provides no caselaw support for its
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`attempt to transform the substantive law as to a POSITA’s knowledge into a new
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`evidentiary rule.
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`In addition to alleging that Dr. Ehsani “ignores” art that Liberty did not
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`submit until its Reply, Liberty also alleges that Dr. Ehsani somehow
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`“ignores…portions of his own testimony, which [purportedly] confirm Kosaka
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`employs very basic fuzzy logic and omits only insurance details.” (Motion at 7,
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`emphasis added.) The only example that Liberty offers in support of this theory is
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`a supposed concession by Dr. Ehsani that “the membership functions provided by
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`Kosaka…can be found in conceptual introductions to basic fuzzy logic,” and that
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`any complaint about “what the actual membership functions are” is simply a
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`question of what particular “mathematical specifications” to use, which is not Dr.
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`Ehsani’s specialty. (Motion at 7.)
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`Once again, a simple reading of the Dr. Ehsani’s declaration (including the
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`text removed by Liberty with ellipses) debunks this erroneous claim. The full text
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`from which Liberty quoted reads as follows (with underlining for the language
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`Liberty quotes):
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`CLI-2150159v2
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`8
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`Case CBM2012-00002
`Patent 6,064,970
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`The corresponding disclosure in Kosaka’s specification is sparse and
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`provides no additional details other than what is provided in these figures
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`with respect to the mathematical specifications of the membership functions.
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`The membership functions provided by Kosaka are more symbolic than
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`specific and can be found in conceptual introductions to basic fuzzy logic
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`and hence they do not provide any description as to what the actual
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`membership functions are.
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`(Ex. 2016 at ¶ 31.) Liberty contorts this quote to insinuate that Kosaka’s
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`membership functions are easy to understand and readily disclosed in other
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`references and that Dr. Ehsani’s only complaint about Kosaka’s disclosure has to
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`do with a topic on which he should not be opining. (Motion at 7.) To the contrary,
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`what Dr. Ehsani actually states is that the Kosaka disclosure is so deficient that it
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`does “not provide any description as to what the actual membership functions are.”
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`(Ex. 2016 at ¶ 31, emphasis added.)
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`At the core of Liberty’s arguments is that it simply disagrees with Dr.
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`Ehsani’s view as to Kosaka. This is not a basis for moving to exclude. Indeed,
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`these arguments go to the sufficiency of evidence Progressive has marshaled, and
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`cannot be raised in a motion to exclude. (See supra at 1-2.) As such, Liberty has
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`failed to demonstrate good cause to exclude Progressive’s evidence, and its motion
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`should be denied.
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`CLI-2150159v2
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`9
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`IV. CONCLUSION
`For at least these reasons, Liberty’s Motion should be denied.
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`Case CBM2012-00002
`Patent 6,064,970
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`October 11, 2013
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`By:
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`Respectfully submitted,
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`JONES DAY
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`/s/Calvin P. Griffith
`Calvin P. Griffith
`Registration No. 34,831
`JONES DAY
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`(216) 586-3939
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`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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`CLI-2150159v2
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`10
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing PATENT OWNER’S OPPOSITION
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`TO MOTION TO EXCLUDE EVIDENCE was served on October 11, 2013 by
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`causing them to be sent by email to counsel for Petitioner at the following email
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`addresses:
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`Steven.baughman@ropesgray.com
`Nicole.jantzi@ropesgray.com
`James.myers@ropesgray.com
`LibertyMutualPTABService@ropesgray.com
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`/s/ John V. Biernacki
`John V. Biernacki
`Registration No. 40,511
`JONES DAY
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
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`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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