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 CBM2012-00003
`Patent 8,140,358
`______________
`
`Before the Honorable JAMESON LEE, JONI Y. CHANG, and MICHAEL R.
`ZECHER, Administrative Patent Judges.
`
`PETITIONER LIBERTY MUTUAL INSURANCE CO.’S REPLY TO
`PATENT OWNER PROGRESSIVE CASUALTY INSURANCE CO.’S
`RESPONSE
`
`

`

`
`
`TABLE OF CONTENTS
`I.
`Relief Requested and Preliminary Statement ............................................................. 1
`II. Nakagawa Discloses Storing and Transmitting “Selected Vehicle Data,”
`Storing Vehicle Data in a “Database,” and Generating a “Rating Factor” .......... 3
`III. The Board Correctly Concluded that the ‘358 Patent Claims Are Not
`Entitled to Priority from the ‘650 and ‘076 Applications ........................................ 9
`IV. The Board’s Institution Decision was Correct and Should be Confirmed ........ 15
`
`
`
`i
`
`

`

`
`
`Exhibit 1001
`Exhibit 1002
`
`Exhibit 1003
`
`Exhibit 1004
`
`Exhibit 1005
`
`Exhibit 1006
`
`Exhibit 1007
`
`Exhibit 1008
`
`Exhibit 1009
`
`Exhibit 1010
`
`Exhibit 1011
`
`Exhibit 1012
`
`Exhibit 1013
`
`
`
`EXHIBIT LIST
`
`United States Patent No. 8,140,358
`United States Patent No. 8,140,358 File His-
`tory
`Japan Patent Application H4-182868, filed on
`November 19, 1990, and published on June
`30, 1992 (“Kosaka”)
`UK Patent Application GB 2286369, filed on
`November 2, 1994, published on August 16,
`1995 (“Herrod”)
`United States Patent Application Publication
`No. 2002/0128882, filed February 27, 2002,
`published on September 12, 2002 (“Nakaga-
`wa”)
`United States Patent No. 5,459,304, filed on
`September 13, 1994, and issued on October
`17, 1995 (“Eisenmann”)
`United States Patent No. 5,243,530, filed on
`July 26, 1991, and issued on September 7,
`1993 (“Stanifer”)
`United States Patent No. 5,446,757, filed on
`June 14, 1993, and issued on August 29, 1995
`(“Chang”)
`United States Patent No. 5,210,854, filed on
`June 14, 1989, and issued on May 11, 1993
`(“Beaverton”)
`United States Patent No. 6,957,133, filed on
`May 8, 2003, and issued on October 18, 2005
`(“Hunt”)
`United States Patent No. 7,228,211, filed on
`March 26, 2004, and issued on June 5, 2007
`(“Lowrey”)
`United States Patent No. 4,651,157, filed on
`May 7, 1985, and issued on March 17, 1987
`(“Gray”)
`PCT Patent Pub. No. WO 90/02388, pub-
`lished on March 8, 1990 (“Pettersen”)
`
`ii
`
`

`

`Exhibit 1014
`
`Exhibit 1015
`
`Exhibit 1016
`
`Exhibit 1017
`
`Exhibit 1018
`
`Exhibit 1019
`
`Exhibit 1020
`Exhibit 1021
`Exhibit 1022
`Exhibit 1023
`Exhibit 1024
`
`Exhibit 1025
`
`Exhibit 1026
`
`United States Patent No. 5,465,079, filed on
`August 13, 1993, and issued on November 7,
`1995 (“Bouchard”)
`“An Interest in Black Magic – Motor Tech-
`nology,” Insurance Age, published on January
`1, 1994 (“Black Magic”)
`“Communications And Positioning Systems
`In The Motor Carrier Industry” by Dimitris
`A. Scapinakis and William L. Garrison, pub-
`lished January 1, 1992 (“Scapinakis”)
`“Application of GSM in High Speed Trains:
`Measurements and Simulations” by Manfred
`Goller, published on May 16, 1995 (“Gol-
`ler”)
`“AX.25 Amateur Packet-Radio Link-Layer
`Protocol, Version 2.0”, Terry L. Fox, pub-
`lished in October, 1984 (“AX.25 Specifica-
`tions”)
`“QUALCOMM's MSM6500 Multimedia Sin-
`gle-Chip Solution Enables High-Performance
`Multimode Handsets Supporting CDMA2000
`1X, 1xEV-DO and GSM/GPRS,” PR News-
`wire, published November 12, 2002
`(“MSM6500 Press Release”)
`United States Patent No. 8,090,598
`United States Patent No. 6,064,970
`United States Patent No. 6,868,386
`United States Patent No. 5,797,134
`United States Patent No. 5,438,312, filed on
`April 19, 1994 and issued on August 1, 1995
`(“Lewis”)
`Declaration of Scott Andrews, dated Septem-
`ber 15, 2012
`
`Curriculum vitae of Scott Andrews and List of
`Matters
`
`
`
`iii
`
`

`

`Exhibit 1027
`
`Exhibit 1028
`
`Exhibit 1029
`
`Exhibit 1030
`
`Exhibit 1031
`
`Exhibit 1032
`
`Exhibit 1033
`
`Exhibit 1034
`
`Exhibit 1035
`
`Exhibit 1036
`
`Exhibit 1037
`
`OBD-II Background—Where’d It Come
`From?,
`http://www.OBDii.com/background.html
`(follow “Where’d it come from?” hyperlink)
`
`Excerpt from Shuji Mizutani, Car Electronics,
`page 250 (Nippondenso Co. Ltd. 1992)
`
`Excerpt from David S. Boehner, Automotive
`Microcontrollers, in Automotive Electronics
`Handbook, pages 11.24-11.29 (Ronald K.
`Jurgen ed., 1995)
`
`Declaration of Amanda F. Wieker
`
`Declaration of Georginne Blundell
`
`Rebuttal Declaration of Mary L. O’Neil, dated
`August 15, 2013 (“O’Neil Rebuttal Dec.”)
`
`Curriculum vitae of Mary L. O’Neil and List
`of Matters
`
`Rebuttal Declaration of Scott Andrews, dated
`August 15, 2013 (“Andrews Rebuttal Dec.”)
`
`ISO8790-1987 – “Information Processing
`Systems – Computer System Configuration
`Diagram Symbols and Conventions”
`
`Excerpt from Microsoft Press Computer Dic-
`tionary, Third Ed.
`
`The Apache Software Foundation History
`Project – Timeline,
`http://www.apache.org/history/timeline.html
`
`Exhibit 1038
`
`Declaration of Jordan M. Rossen
`
`
`
`iv
`
`

`

`I.
`
`Relief Requested and Preliminary Statement
`
`Petitioner requests cancellation of all claims (1-20) of the ‘358 patent1 as un-
`
`patentable under 35 U.S.C. §§ 102 and 103 for the reasons in its Petition and below.
`
`In initiating trial the Board correctly found that, unless rebutted by Progressive, the
`
`disclosure of Nakagawa (EX1005)—combined with other references for specific de-
`
`pendent claims—invalidate every claim of the ‘358 patent. Nakagawa (assigned to
`
`Toyota, the world’s largest auto manufacturer) discloses transmission of “Safe Driving
`
`Information” to a “Car Insurance Company” for “Insurance Premium Discount or
`
`Increase.” Id., Fig. 1. In response,2 Progressive’s “expert,” Mr. Zatkovich, argues
`
`Nakagawa’s driver information is not transmitted in its raw state, but instead as pro-
`
`cessed “point” values.3 This is wrong: Nakagawa explicitly discloses wireless trans-
`
`
`1 EX1001. Except as noted, Exhibits are referenced “EX” or, for rebuttal exhibits,
`“RX”; abbreviations are defined in the Petition (“Pet.,” Dkt. 1); and all emphases are
`added. Petitioner does not undertake to address all of Progressive’s errors, but only
`its most egregious. Progressive identified no material facts under Rule 42.23(a), and
`its Opposition (“Opp.” Dkt. 33, at 30) does not separately dispute the unpatentability
`of dependent claims 2-20, but merely alleges Nakagawa fails to invalidate independent
`claim 1. The Board should thus hold claims 2-20 unpatentable for at least the rea-
`sons in the Petition, which are unrebutted. As to other unchallenged aspects, Pro-
`gressive similarly failed to rebut the Petition’s evidence and the Board’s determination.
`2 Progressive purports now to object to the Board’s initiation of trial based on de-
`termining claim 1 qualifies for review under AIA§ 18, but it sought no rehearing and
`waived any objection to this non-appealable determination. 35 U.S.C. § 324(e); 37
`C.F.R. § 42.71(c). In any event, the Board’s determination was entirely proper. E.g.,
`AIA § 18(d) (“‘covered business method patent’’ means a patent that claims a method
`or corresponding apparatus…”); Final Rule, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012).
`3 Mr. Zatkovich does not purport to be a POSITA regarding insurance, and thus has
`no basis to render the various opinions he provides regarding a POSITA’s under-
`standings of insurance matters. E.g., EX2007 ¶¶ 8, 99, 104; RX1034 ¶ 44. In addi-
`1
`
`
`
`

`

`mission of detected data, and the other point values Mr. Zatkovich complains of are also
`
`clearly within data types contemplated by the ‘358, which expressly describes not only
`
`“raw data elements” but also “calculated” and “derived data elements.” Progressive
`
`further argues Nakagawa does not show a database, but it clearly does, disclosing stor-
`
`ing and updating a range of user data values all keyed to a particular user ID. Pro-
`
`gressive also tries to negate Nakagawa’s disclosure of a server configured to generate
`
`“rating factors,” first by improperly redefining the term, and then arguing Nakagawa’s
`
`rating factors are generated elsewhere. But Nakagawa clearly discloses generating
`
`the same type of safety assessment the ‘358 patent itself ties to expected insurance
`
`claim losses, and it does so at the server. Progressive’s contrary reading is nonsense.
`
`Finally, in an attempt to escape Nakagawa altogether for certain claims, Pro-
`
`gressive tries to reach back to an earlier priority date, hoping to fill gaps in its very dif-
`
`ferent ‘650 and ‘076 parent applications by relying on “expert” declarations arguing
`
`that the many missing aspects of written description are somehow “inherent.” To
`
`the contrary, the missing support is simply missing, and the purported priority chain
`
`lacks several critical links, including, inter alia, a remote server performing functions
`
`required by every ‘358 claim. Progressive picks through the ‘650 application to conjure
`
`
`tion, while Mr. Zatkovich purports to interpret disclosures in the ’650 application orig-
`inally made in its January 1996 grandparent, and concedes a POSITA in the technical as-
`pects of the ‘358 patent must have “as of January 1996 …at least one to two years of experi-
`ence with telematics systems for vehicles…including communications and locations
`technologies” (EX2007), he had no such experience in 1996. Id. ¶¶ 4, 5 (asserting
`telematics experience only with Utility Partners); EX2008 (CV) at 4 (this work began in
`1996). The Board should thus disregard this testimony. See F.R.E. 702.
`2
`
`
`
`

`

`generalized arguments that certain activities were inherently performed somewhere, but
`
`never shows a remote server configured to (1) generate a “rating factor” based on the “selected
`
`vehicle data” (claim 1) or (2) then generate a premium, surcharge, or discount based on
`
`that “rating factor” (claim 19). ID 19-20. Progressive’s baseless inherency arguments
`
`never place such functions on a remote server, and its attempts to stretch “rating fac-
`
`tor” to match unrelated disclosures would render meaningless both the claim language
`
`and the Board’s definition (which Progressive purports to apply). The question is not
`
`whether a POSITA could have figured out how to make the claimed invention without refer-
`
`ence to the ‘358 specification (from which Petitioner asserts no invention arises to
`
`begin with), but whether the earlier ‘650 and ‘076 applications “clearly” disclose the ‘358
`
`claims from the “proper vantage point of one with no foreknowledge” of those claims.
`
`Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc); No-
`
`vozymes A/S v. DuPont Nutrition Biosciences APS, 2012-1433, 2013 WL 3779376, *13
`
`(Fed. Cir. July 22, 2013). They do not, and Progressive and its “experts” improperly
`
`“work[] backward from a knowledge of the claims, that is by hindsight” to “derive
`
`written description support from an amalgam of disclosures plucked selectively” from
`
`the ‘650 and ‘076 applications. Id., 2013 WL 3779376, *13.
`
`II. Nakagawa Discloses Storing and Transmitting “Selected Vehicle Data,”
`Storing Vehicle Data in a “Database,” and Generating a “Rating Factor”
`
`Nakagawa discloses storing and transmitting “selected vehicle data.” Progres-
`
`sive concedes Nakagawa “does collect ‘vehicle data’ from a control bus, using ‘various
`
`sensors to detect how a user is operating [the] car’” (Opp. 21 (emph. orig.)), but ar-
`3
`
`
`
`

`

`gues (1) all detected data is processed into “usage data” (e.g., “point values”) before it
`
`is stored and transmitted, and (2) such numeric “usage data” would not satisfy Pro-
`
`gressive’s newly-minted construction of “selected vehicle data” (which drags in other
`
`claim language). Opp. 21-22; EX2007 ¶¶ 39-41. Progressive’s first argument flies
`
`in the face of Nakagawa’s clear disclosure of detected vehicle data being stored and
`
`transmitted without being processed into point values. E.g., EX1005 [0058], [0056]
`
`(“memory [in control part 12] stores data collected by operating status detection means 7”; “The
`
`on-board radio part 9 sends data detected as above [including “[d]ata collected by the oper-
`
`ating status detection means 7”] to server apparatus 6”); Pet. 24; EX2007 ¶ 11 (acknowl-
`
`edging “data obtained from these two detection means 7 and 8 is sent by the on-board radio
`
`part 9 to the server apparatus 6.”); RX1034 (Andrews Reb. Dec.) ¶¶ 5-7. It is further
`
`belied by Nakagawa’s express teachings that the data received and stored at server 6 (i.e.,
`
`“user data”) includes this same detected data, “includ[ing] data relating to speeding and
`
`the length of time for which speeding occurs, non-use or inappropriate use of seatbelts,
`
`application of ABS other than during an accident, sudden acceleration and deceleration…”
`
`EX1005 [0072] (describing server-side premium increases when user data includes
`
`certain detected events); RX1034 ¶¶ 8, 20. Cf. Opp. 17 (suggesting server cannot
`
`recognize if “based on seatbelt non-use or speeding or something else”); EX2007 ¶
`
`42. Indeed, these are precisely the types of “selected vehicle data” disclosed in the ‘358 patent.
`
`E.g., EX1001, 16:7-14 (“recorded aspects of machine operation may include speed, ac-
`
`celeration events, deceleration events…seat belt use”); RX1034 ¶¶ 8-10. Second, despite
`
`
`
`4
`
`

`

`Progressive’s hand-waving, Nakagawa’s additional calculated numeric “usage data”
`
`also satisfy the “selected vehicle data” limitation: they are clearly “vehicle data” be-
`
`cause they are at least calculated or derived from vehicle sensors, as the ‘358 itself
`
`confirms by explaining that vehicle data “monitored and/or recorded by [in-vehicle]
`
`device 300 include [not only] raw data elements [but also] calculated data elements, de-
`
`rived data elements, and subsets of these elements.” EX1001, 7:12-13; RX1034 ¶¶ 8-
`
`10. They are also “related to a level of safety or an insurable risk in operating a vehi-
`
`cle” (Opp. 10, 21; EX2007 ¶ 42) because they represent “degree of safe operation”
`
`and “danger status.” EX1005, [0065]; RX1032 (O’Neil Reb. Dec.) ¶ 26; RX1034 ¶ 9.
`
`Nakagawa also discloses the “database” limitation. E.g., EX1025 ¶ 36. Pro-
`
`gressive does not dispute that Nakagawa discloses “user data” is “stored”/“recorded” at
`
`the server and that user data corresponding to a particular user ID is “updated” when new
`
`data are received. Opp. 25; EX2007 ¶ 15. For a particular user’s “user data”—
`
`including data on such attributes as that user’s speeding, seatbelt use, braking, acceler-
`
`ation, etc.4 (EX1005 [0072])—to be “recorded” in memory (EX1005 [0068]) in a way
`
`that can be located and retrieved later (e.g., to update or calculate with a particular
`
`piece of data), it must necessarily be stored in a form maintaining this link to user ID,
`
`described in Progressive’s cited dictionary as a “file”: the “basic unit of storage that ena-
`
`bles a computer to distinguish one set of information from another.” RX1036 at 194;
`
`RX1034 ¶¶ 12-22; EX1025 ¶ 36. Contrary to Mr. Zatkovich’s suggestion (EX2007
`
`4 Mr. Zatkovich’s assertion that no database is required rests (and falls) on his mistak-
`en assumption that Nakagawa discloses “only... a point value.” EX2007 ¶¶ 54-55.
`5
`
`
`
`

`

`¶¶ 26, 31), Nakagawa’s files containing “user data” must necessarily be comprised of
`
`“records” because the “user data” represents “different types of information”
`
`(EX2010 at 399) that must be associated and accessible. EX1005 [0072]; RX1034
`
`¶¶ 23-24. Compare, e.g., EX2007 ¶¶ 33 (suggesting Nakagawa never shows “adding”
`
`records), and 93 (arguing “ability to write records” evidenced by stored “events and
`
`data”). Progressive acknowledges Nakagawa could use “arrays” of data (EX2007 ¶
`
`55), and while Mr. Zatkovich apparently excludes “arrays” from his personal defini-
`
`tion of “records” (id. ¶ 55), Progressive conspicuously does not. Cf. Opp. 11. See also
`
`EX2011 at 129:8-130:7 (excluding “array” renders Microsoft definition incomplete);
`
`EX2007 ¶ 23 (citing Microsoft definition but omitting “array” exclusion). Indeed,
`
`arrays or “flat files” are specifically identified by the ‘358 patent as a type of database:
`
`“data may be retained in database(s)…(e.g., relational databases that may comprise one or
`
`more flat files (2-dimensional arrays) that may be transformed to form new combinations
`
`because of relations between the data in the records or other databases.” EX1001,
`
`31:36-41; RX1036, 199 (defining “flat file” as “a file consisting of records of a single record
`
`type.”); RX1034 ¶¶ 25-26. Moreover, updating stored “user data” that corresponds
`
`to a received user ID necessarily requires (a) searching for and locating the user data
`
`corresponding to that particular ID and (b) retrieving and updating that located data.5
`
`
`5 Progressive imagines uncertainty where none exists: Mr. Andrews clearly testified
`that Nakagawa discloses what any POSITA would know is a database. EX1025 ¶ 36
`(“would be understood…as indicating a database”); cf. Opp. 25. While Mr. Andrews
`indicated some basic operations that do not involve storing data (such as rudimentary loca-
`tion processing) could be done in temporary memory rather than a database (EX2011
`6
`
`
`
`

`

`RX1034 ¶¶ 27-31. Cf. EX2007 ¶¶ 27-31, 55. Progressive’s insistence that such up-
`
`dating does not disclose searching is belied by Progressive’s own assertion that merely the
`
`“need” to “store” and “access” data “necessarily” discloses (i) a database; (ii) search-
`
`ing; and (iii) “other” functionality. Opp. 42-43; EX2007 ¶ 93; RX1034 ¶ 32.
`
`Finally, notwithstanding Progressive’s meritless arguments, Nakagawa discloses
`
`an insurer’s server configured to generate a “rating factor.” First, Progressive now
`
`tries to redefine “rating factor” to encompass insurance premiums, “surcharges and
`
`discounts” (Opp. 49; EX2005 ¶ 43; see also CBM2013-00004 (U.S. Pat. No. 8,090,598)
`
`Dkt. 19 at 39-40;6 but see discussion infra), and Progressive does not dispute that Nak-
`
`agawa’s calculations of premiums, discounts and surcharges are performed at the server. See
`
`Opp. 15, 17 (“Insurance premiums are calculated by the server”), 19; EX1005 [0072].
`
`Nakagawa would certainly disclose this limitation under Progressive’s new construc-
`
`tion of “rating factor.” Second, Nakagawa’s disclosed “operating level,” which
`
`“show[s] driving techniques and the level of safe driving” (EX1005 [0076]), satisfies the
`
`Board’s construction of “rating factor,” despite Progressive’s attempts (Opp. 29,
`
`EX2005 ¶ 44) to graft another requirement onto the definition requiring that it be
`
`“based on or tied somehow to expected claims losses or actuarial classes.” RX1032
`
`¶¶ 17-19, 27-28. Indeed, the ‘358 patent itself ties the level of safe driving to expected claim
`
`at 106:20-108:19 (“a latitude and a longitude value that I want to perform a calculation
`on”)), this is palpably not the case for Nakagawa, whose storage and maintenance of
`user data keyed to a user ID requires a database. E.g., EX1025 ¶ 36.
`6 In the related ‘598 proceeding, Progressive alleges insurance costs can be “rating
`factors,” “driver safety scores” (id), “relationship data” (id. 31), and “levels of risk” (id.
`36), which it says are also “actuarial classes” (id. 29-30).
`7
`
`
`
`

`

`losses. E.g., id. ¶ 28; EX1001, 3:40-55 (metrics and monitoring can, e.g., “be used to
`
`measure the relative safety of [a machine’s] operation” and “generate data that may determine the
`
`cost to protect against a risk of loss”), 3:61-63 (“The data may establish a safe driving rec-
`
`ord [sic, and] a lower risk of being subject to a claim”). See also, e.g., Figs. 8-13 (driving tech-
`
`niques (e.g., “# Aggressive Accelerations,” etc.) and level of safe driving (e.g., “Safety
`
`Score”) used in determining premium). Third, Progressive’s assertion that the in-
`
`vehicle “display means” only shows “point values” stored in on-board memory as
`
`“operating levels” (Opp. 28) is simply not true. In fact, the only type of data dis-
`
`closed in Nakagawa as being displayed on the “display means” is “data relating to the
`
`car insurance premium” received from the server. EX1005 [0073] (“When the insurance
`
`premium calculation means 20 has calculated the car insurance premium…the fixed
`
`radio part 18 sends, by radio, the data relating to the calculated car insurance premium to the
`
`on-board apparatus 4…on-board apparatus 4 receives the data relating to the car insurance
`
`premium…and the display means 10 displays the data relating to the car insurance premium”),
`
`Fig. 5; RX1034 ¶¶ 33-34. Finally, even if individual operation levels were the same
`
`“usage data” calculated at the vehicle (they are not7), the server is necessarily analyzing
`
`“usage data” to determine a total operating level for the month: the data sent by the
`
`server and displayed in the vehicle contains an “evaluation of operating levels for one
`
`month [that] is calculated in numeric form and displayed to reflect the amount by which the insur-
`
`ance premium will be multiplied.” EX1005 [0076]; Fig. 7 (displaying total operating level for
`
`7 See also, e.g., Comaper Corp. v. Antec, Inc., 596 F.3d 1343, 1348 (Fed. Cir. 2010) (noting
`inference that “two different terms used in a patent have different meanings.”).
`8
`
`
`
`

`

`each month); RX1034 ¶ 35-36. For example, the types of data Progressive contends
`
`are “operating levels” calculated at the vehicle include at least two types of “evalua-
`
`tions”: (1) “evaluation of driving techniques,” including “deceleration” and “unrea-
`
`sonable steering,” and (2) “evaluation of safe driving,” including “whether…safe dis-
`
`tance is being maintained.” Opp. 27-28. At minimum, even under Progressive’s
`
`misreading, the server must still calculate a monthly aggregate of such evaluations to
`
`determine the premium to be charged and send the results for in-vehicle display.
`
`RX1034 ¶ 37. Nakagawa’s only disclosure of “calculat[ing] in numeric form” the
`
`“operating levels for one month…to reflect the amount by which the insurance premium will be
`
`multiplied” is in connection with results received from the server and then displayed.
`
`RX1034 ¶ 38. Indeed, if total operating levels were already calculated at the vehicle,
`
`there would be no need for the server to store all of the user data to calculate premi-
`
`ums, or for the operating levels to be “sent back down to the vehicle” (EX2007 ¶
`
`60)—precisely the sort of “expensive and unnecessary complexity” Progressive’s “ex-
`
`pert” says a POSITA would never add to Nakagawa (EX2007 ¶ 54). RX1034 ¶ 38.
`
`III. The Board Correctly Concluded that the ‘358 Patent Claims Are Not En-
`titled to Priority from the ‘650 and ‘076 Applications
`
`The Board correctly determined that, even as to claim 1, the ‘650 application
`
`fails to provide written description of the various operations of the claimed “server.”
`
`ID 19. Despite the Board’s admonition that Progressive’s initial response referred
`
`only “to overall activities that are performed and a general rating system” (id.), Pro-
`
`gressive and its “experts” offer nothing more than “an amalgam of disclosures
`9
`
`
`
`

`

`plucked selectively” from the ‘650 application that compels anything but a “clear con-
`
`clusion” that Progressive had possession of the claimed server configuration as of the
`
`‘650 application’s filing date (May 15, 2000). Novozymes, 2013 WL 3779376, *13;
`
`Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1331 (Fed. Cir. 2008); RX1034 ¶
`
`43. Accordingly, because claim 1 (the only independent claim) is not supported by
`
`the ‘650 application, no claim of the ‘358 patent8 is entitled to its priority date, and
`
`Nakagawa is prior art (under 35 U.S.C. §§ 102 and 103) as to every claim.9
`
`As the Board noted, the ‘358 patent claims are directed to a “two-step” proce-
`
`dure where a remote server is configured to, inter alia, (1) generate a “rating factor” based on
`
`the “selected vehicle data” (claim 1) and subsequently (2) generate a premium, surcharge,
`
`or discount based on that “rating factor” (claim 19). ID 19-20. The ‘650 application,
`
`however, at most refers to insurance premium determination generally, with no dis-
`
`closure of any server configured either to calculate a “rating factor” or to further calcu-
`
`late a premium or surcharge/discount based on that “rating factor” as required by the
`
`8 Progressive attempts to predate Nakagawa only as to claims 1, 9, 19 and 20 (see Opp.
`30-63; EX2007 at ¶¶ 63-148); it makes no priority argument at all as to claims 2-8 and 10-
`18. See ID 18-19. Thus, as to these claims Progressive concedes Nakagawa is prior art,
`and, because Progressive cannot rebut the showing of obviousness established in the
`Petition (see, e.g., ID 16)—apart from its baseless arguments about claim 1 (debunked
`above) it does not even try—they are all invalid.
`9 Progressive’s attempts to conflate the knowledge of a POSITA in determining suf-
`ficiency of ‘650 application for priority and Nakagawa for anticipation is contrary to
`the law. See e.g., Opp. 51 n.4. Whereas for priority, “it must be shown that a per-
`son of ordinary skill would have understood, at the time the [‘650] patent application was filed,
`that the description requires that limitation,” for anticipation by inherency, “recognition
`by a person of ordinary skill in the art before the critical date of [Nakagawa] is not re-
`quired.” Compare Hyatt v. Boone, 146 F.3d 1348, 1353 (Fed. Cir. 1998), with Schering
`Corp. v. Geneva Pharms. Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003).
`10
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`‘358 claims. In an effort to stretch the ‘650 application’s bare-bones disclosure to
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`cover this two-step process, Progressive first contends that determining insurance
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`charges “necessarily involves generating and using a rating factor,” and, failing that,
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`contends that the insurance charges (i.e., surcharges and discounts) are themselves the
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`“rating factors.” Opp. 48-49. As discussed below, they are not. And contrary to
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`Progressive’s contention (e.g., Opp. 48), insurance costs may be determined based on
`
`detected driving characteristics without “necessarily” generating a “rating factor” prior
`
`to such determination. RX1032 ¶ 20-25. Nor would a POSITA understand the
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`‘650 application’s cursory references to insurance cost determination—devoid of any
`
`disclosure on how to calculate (much less use) “actuarial classes” to determine insur-
`
`ance premiums—to “necessarily” disclose the additional calculation of a “rating fac-
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`tor,” as used in the ‘358 patent and construed by the Board. Id. Cf. Opp. 48.
`
`Even assuming, arguendo, that determining insurance costs “necessarily in-
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`volves” generating a “rating factor,” the ‘650 application is devoid of any disclosure
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`that the “rating factor” is “necessarily” calculated at the server, as all ‘358 claims require.
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`RX1034 ¶ 40-43, 45-46. In fact, the ‘650 and ‘076 applications disclose that while
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`the “charges/billing” algorithm “530” (which Progressive contends is used to calcu-
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`late insurance costs), “rating algorithms 522” and “processing logic” are “developed” by
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`the insurer, they are actually communicated to, and located on, the “on-board computer.” See
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`e.g., EX2012, 21:7-12 (“An insurer can…develop improved rating algorithms 522,
`
`530…Such improved algorithms can be regularly communicated to the units of risk 200 for
`
`
`
`11
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`improved insurance cost computation accuracies. The improved rating algorithms can be
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`communicated 524 to the units of risk on-board device 300 (FIG. 4).”); EX2004, 18:19-20
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`(“Each unit of risk 200…includes…data process logic”); 20:30-21:4; 19:10-13 (“Data pro-
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`cess logic 504…can be transferred from the insurer to the unit of risk that is adapted for acquir-
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`ing data especially important for assessing the particular unit’s insurance costs.”); RX1034 ¶ 47.
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`Given the ‘650 and ‘076 applications’ disclosures that the charges, billing, and rating
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`algorithms are downloaded to and stored in the vehicle device, a POSITA would cer-
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`tainly not conclude that a “rating factor,” to the extent it is “necessarily” calculated at all, is
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`“necessarily” calculated at the remote server. RX1034 ¶ 48. Indeed, the Board has al-
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`ready determined that such a disclosure is not enough to show the limitations of claim 1,
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`declining to initiate trial based on Herrod because “the description only indicates that
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`the remote computer updates the algorithm for [the rating factor] analysis and not that it carries
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`out the analysis.” ID 23. The ‘650 application similarly fails this test, merely indicating
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`the insurer “develops” improved “rating algorithms” and downloads them to the on-board de-
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`vice, not that the insurer (or any server remote from the device) “carries out the analysis.”
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`For each server limitation Progressive claims is “inherently” or “necessarily” disclosed
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`(Opp. 39, 43, 48), Progressive fails to show such functionality must “necessarily” be
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`performed at a remote server of the insurer, as opposed to at the vehicle unit.
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`RX1034 ¶ 48. There is simply no ‘650 written description of the server functions
`
`required in every claim being carried out remotely from the vehicle,10 and the ‘650
`
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`10 The only “server” actually mentioned in the ‘650 application is a “web server”
`12
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`application provides no basis for any ‘358 claim to predate Nakagawa.
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`Moreover, even apart from the ‘650 applications clear failure to provide any
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`disclosure of a remote server performing the required functions, Progressive’s at-
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`tempts to shoehorn insurance costs into multiple elements of the ‘358 claims, hoping
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`to find any ‘650 disclosure of a “rating factor” to begin with, also fail: they are contra-
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`dicted by the language of the claims, the Board’s constructions, and the understanding
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`of a POSITA. Claim 1 requires a “server” configured to “generate a rating factor
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`based on the selected vehicle data stored in the database,” while dependent claim 19
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`adds the server is “further configured” to “calculate an insured's premium under the in-
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`sured’s insurance policy based on the rating factor, or a surcharge or a discount to the in-
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`sured's premium, based on the rating factor.” Consistent with the actual ‘358 claims and
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`specification, the Board’s construction of “rating factor” in claim 1 also recites “a cal-
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`culated insurance risk value” that “reflects…a corresponding insurance premium.” ID 6.
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`These recitations make clear that the insurance premium and premium surcharges and
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`discounts are “based on” the “rating factor”—they are not themselves the “rating factor.”11 See
`
`
`serving “informational content.” E.g., EX2004, 10:13; 19:1-5; 20:8-9; Figs. 2, 5.
`There is no ‘650 disclosure that the “web server” is configured, e.g., to calculate a “rat-
`ing factor” based on the “selected vehicle data” or a premium based on such “rating
`factor,” nor would a POSITA understand this “web server” to perform such func-
`tions. RX1034 ¶ 46.
`11 Progressive’s attempt to confuse calculated insurance costs in the form of “surcharg-
`es” or “discounts” with the ‘358 patent’s “usage discounts” included in the definition of
`“rating factor” —i.e., percentages applied in calculating insurance charges—is willful
`distortion. E.g., Opp. 49 (referring to “usage surcharges or discounts”). The “usage
`discount 858” of Fig. 8, expressly referred to in the ’358 specification’s description of
`“rating factor” (EX1001, 22:21-24 (“a rating factor, such as a safety score 856 and/or a
`13
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`also ID at 19-20 (claim 19 requires “a two-step procedure where a rating factor is first gener-
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`ated and then a premium or surcharge or dis