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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`—————————————
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`—————————————
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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 REPLY IN SUPPORT OF ITS MOTION TO
`EXCLUDE EVIDENCE PURSUANT TO 37 C.F.R. § 42.64(c)
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`CLI-2151574v2
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`Patent Owner Progressive Casualty Ins. Co. (“Progressive”) hereby submits
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`Case CBM2012-00002
`Patent 6,064,970
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`this Reply in support of its Motion to Exclude.
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`I.
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`LEGAL STANDARD
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`37 C.F.R. § 42.304 requires that Liberty’s Petition “specify where each element
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`of the claim is found in the prior art” and that Liberty “identify[] specific portions of
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`the evidence that support the challenge.” See 37 C.F.R. § 42.304(b)(4),(5). Progressive
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`quotes this language on page 2 of its Motion, yet nowhere in Liberty’s Opposition
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`brief does it ever mention this rule.
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`Instead, Liberty discusses FTC and NLRB cases from the 1940s and a Tax
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`Court decision from 1950. (Opp. at 1.) Then, Liberty cites 37 C.F.R. § 42.5 as
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`“permit[ting] administrative patent judges wide latitude in administering the
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`proceedings[.]” (Opp. at 1, emphasis added.) And, based on this “wide latitude”
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`under § 42.5, Liberty concludes that its “evidence is entirely proper, while
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`Progressive’s objections are baseless.” (Id. at 1-2.)
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`However, § 42.5 is inapplicable. It only applies to “situation[s] not specifically
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`covered by this part[.]” 37 C.F.R. § 42.5(a). The situation at issue is plainly “covered”
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`in Part 42 under § 42.304. Liberty’s refusal to address § 42.304 in its brief (and its
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`resort to the inapplicable § 42.5) does not alter the mandatory requirement that its
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`Petition must specifically identify where each claim element allegedly appears in each
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`prior art reference.
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`CLI-2151574v2
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`On page 2 of its motion, Progressive quoted the requirement under 37 C.F.R.
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`Case CBM2012-00002
`Patent 6,064,970
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`§ 42.23(b) that a “reply may only respond to arguments raised in the…patent owner
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`response.” In addition, Progressive quoted the treatment of this rule in the Office
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`Patent Trial Practice Guide, which confirms that new evidence in a Reply is
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`prohibited if it is necessary to make out a prima facie case or could have been presented
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`in the Petition. (Motion at 2-3; see 77 Fed. Reg. 48,756, 48,767 (Aug. 14, 2012).)
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`Once again, nowhere in Liberty’s Opposition does it even mention this mandatory
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`rule or the recitation in the Trial Practice Guide as to how it operates.
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`Rather, Liberty simply claims its “prima facie case was complete when [it] filed its
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`Petition commencing this proceeding” and to view it any other way “contradicts both
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`common sense and the Board’s Institution Decision[.]” (Opp. at 2, 5.) Not so. The
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`Trial Practice Guide addresses this exact situation of Petitioner introducing new
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`evidence after a proceeding has commended. It makes clear a reply that “include[s]
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`new evidence necessary to make out a prima facie case…and new evidence
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`that could have been presented in a prior filing” indicates an improper new issue
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`has been raised. 77 Fed. Reg. at 48,767 (emphasis added). This language would be
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`meaningless if deficiencies in Petitioner’s prima facie case could not be identified after
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`instituting a proceeding. Indeed, the Board applied these principles in ordering that a
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`revised reply be filed that “eliminate[d] all improper material under 37 C.F.R. §
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`42.23(b) and the Office Patent Trial Practice Guide.” BlackBerry Corp v. MobileMedia
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`CLI-2151574v2
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`2
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`Ideas, LLC, No. IPR2013-00036 (JYC), Paper 40, at 2-3 (P.T.A.B. July 26, 2013).
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`Case CBM2012-00002
`Patent 6,064,970
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`II. ARGUMENT
`A.
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`Liberty’s Reply Introduced New Fuzzy Logic Evidence
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`Liberty’s Petition did not allege – or offer any evidence to show – that a
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`POSITA would understand fuzzy logic. (Motion at 5.) It argues instead that there
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`was “no need” for it to do so, and it was “proper[]” for it to raise for the first time in its
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`Reply that a POSITA understands fuzzy logic. (See Opp. at 3, 3 n.2.) However, this is
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`not a deficiency Liberty can cure with its Reply. (See supra at 1-3.) In its Petition,
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`Liberty cited Kosaka’s “fuzzy logic” disclosure in contending that every independent
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`claim was unpatentable. (Motion at 5.) It is a damning admission that Liberty can cite
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`only to Reply Declarations in support of its claim that a POSITA “would in fact
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`understand Kosaka’s approach and know how to use it.” (Opp. at 3.) The knowledge
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`and experience of a POSITA is an element of Liberty’s prima facie obviousness case.
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`See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007). Yet there is not a shred of
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`evidence in Liberty’s Petition that supports its claim that a POSITA would be familiar
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`with fuzzy logic so as to be able to understand and know how to apply Kosaka.
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`Instead, Liberty offers seven new references. (Motion at 5-7.) To defend this
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`blatantly improper reliance on new art in a Reply, Liberty attempts to transform the
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`substantive law of a POSITA’s knowledge of prior art into a new evidentiary rule, one
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`which would allow Liberty to introduce any prior art at any time, simply by claiming
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`CLI-2151574v2
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`that it “would have been known to a POSITA[.]” (Opp. at 4.) This is plainly not the
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`Patent 6,064,970
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`law, and Liberty’s argument is a smokescreen to cover its improper introduction of
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`new evidence with its Reply.
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`Liberty further claims that it is not “combin[ing] these seven references with
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`Kosaka” because its “prima facie case was complete” when this proceeding was
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`commenced, and it is doing “nothing more than rebut[ting.]” (Opp. at 4-5.)
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`However, as demonstrated above, Liberty misapprehends the effect of instituting this
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`proceeding. (See supra at 1-3.) And, Liberty’s repeated recitation of the word
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`“rebuttal” does not transform its tardy evidence into a timely submission.
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`Liberty next offers a straw man argument, claiming that it “defies common
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`sense” that Andrews cannot rely on Kosaka’s Figures 10 and 11 in his Reply
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`Declaration, simply because they “were not specifically called out in the Petition or his
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`previous declaration.” (Opp. at 6.) What Progressive actually argued was that
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`Andrews “relied on Figures 10 and 11” to improperly raise a new argument as to “how
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`fuzzy logic would be used to classify [] input values in a way that could be used by an
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`insurance expert[.]” (Motion at 8, emphasis added.) This is a new argument based on a
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`new opinion as to how an “insurance expert” would benefit from “fuzzy logic,” and it
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`needed to be raised in its Petition if Liberty wanted to rely on it in arguing invalidity.
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`Indeed, Liberty further claimed that Andrews offered “no opinions on ‘insurance
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`aspects’ of Kosaka” (Opp. at 8), but Progressive directly quotes from his Reply
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`CLI-2151574v2
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`Declaration as to his opinion on “use[] by an insurance expert[.]” (Motion at 8, 9.)
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`Case CBM2012-00002
`Patent 6,064,970
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`B.
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`Liberty’s Reply Raised New Fuzzy And Non-Fuzzy Embodiments
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`Liberty admits that it did not “refer to ‘crisp’ values or ‘defuzzification’ as a
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`basis for invalidity in the Petition” and that it “relies upon previously-uncited words in
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`Kosaka” as to the non-fuzzy aspects of Kosaka. (See Opp. at 10, 13; Mot. at 10-14.)
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`Yet, Liberty claims “there was no reason” for it to raise these arguments and identify
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`these embodiments until its Reply. (Opp. at 10.) The reason is set forth in § 42.304,
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`and the consequence for not doing so is set forth in § 42.23, which requires exclusion.
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`III. CONCLUSION
`Liberty invites error by raising new issues in its Reply. Progressive has not
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`been afforded any opportunity to offer its own expert declarations to challenge
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`Liberty’s seven new references, Liberty’s use of the purported defuzzification/crisp
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`and non-fuzzy disclosures in Kosaka, or the myriad of other new issues identified by
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`Progressive in its Motion. The AIA did not create a Due Process loophole, such that
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`a patentee could be denied an opportunity to substantively respond to an
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`unpatentability argument with its own evidence. Yet that is exactly what Liberty urges
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`by arguing that the ‘970 patent should be invalidated based on new issues in its Reply.
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`Case CBM2012-00002
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`By:
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`JONES DAY
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`/s/Calvin P. Griffith
`Calvin P. Griffith
`Registration No. 34,831
`JONES DAY
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`(216) 586-3939
`(216) 579-0212 (Fax)
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`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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`October 17, 2013
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`CLI-2151574v2
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`6
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing PATENT OWNER’S REPLY IN
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`SUPPORT OF ITS MOTION TO EXCLUDE EVIDENCE PURSUANT TO 37
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`C.F.R. § 42.64(c) was served on October 17, 2013 by causing them to be sent by email
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`to counsel for Petitioner at the following email 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
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
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`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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