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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 CBM2012-00003
`Patent 8,140,358
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`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
`PURSUANT TO 37 C.F.R. § 42.64(c)
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`CLI-2144869v6
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`Pursuant to 37 C.F.R. § 42.64(c) and Notice of Stipulation of Due Dates
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`Case CBM2012-00003
`Patent 8,140,358
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`(Paper No. 42), Patent Owner Progressive Casualty Ins. Co. (“Progressive”),
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`hereby moves to exclude Exhibits 1032 and 1034 filed by Liberty Mutual
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`Insurance Co. (“Liberty”) with its Reply (Paper No. 39).
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`I.
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`SUMMARY OF ARGUMENT
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`Liberty and its reply declarants have belatedly sought to introduce new prior
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`art references, new invalidity arguments and theories, and new declarations with
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`Liberty’s Reply in an effort to plug the holes in its original case. This is not proper
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`rebuttal evidence, and is without justification. Liberty’s belated new evidence not
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`only violates the Board’s rules, but it unfairly prejudices Progressive. Because
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`Liberty delayed in submitting this improper new evidence with its Reply,
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`Progressive has no opportunity to respond by surreply or with declarations of its
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`own expert witnesses. The Board should grant Progressive’s motion to exclude,
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`otherwise Liberty would be rewarded with an unfair procedural advantage
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`resulting from shifting its theories and evidence of unpatentability at the Reply
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`stage, in an effort to now make out a prima facie case that the Board’s rules
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`required them to establish with their Petition.
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`II. LEGAL STANDARD
`A.
`Petition Must Identify All Supporting Evidence
`A petition to institute a Covered Business Method (“CBM”) Review must be
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`accompanied by all the evidence upon which the petitioner relies in challenging
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`patentability. See 37 C.F.R. § 42.304(b)(4),(5); 77 Fed. Reg. 48,756, 48,756-57
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`(Aug. 14, 2012) (petition must be “accompanied by the evidence the petitioner
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`seeks to rely upon” and “identif[y] all…supporting evidence on a claim-by-claim
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`basis”). It must also “identify[] the specific portions of the evidence that support
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`the challenge,” including “specify[ing] where each element of the claim is found in
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`the prior art[.]” See 37 C.F.R. § 42.304(b)(4),(5); see also 77 Fed. Reg. at 48,757.
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`The Board will not consider any basis for invalidity that is not specifically
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`identified in a petition and will “resolve all vagueness and ambiguity in
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`Petitioner’s arguments against the Petitioner.” (Paper No. 8 at 14.)
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`B. Reply Evidence Cannot Fix Deficiencies In Prima Facie Case
`A “reply may only respond to arguments raised in the…patent owner
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`response.” 37 C.F.R. § 42.23(b). A Petitioner is prohibited from using its reply to
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`submit (i) new evidence necessary to make out its prima facie case, or (ii) new
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`evidence that could have been presented in its petition. See 77 Fed. Reg. at 48,767.
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`The Office Patent Trial Practice Guide further explains this prohibition:
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`While replies can help crystallize issues for decision, a reply that raises a
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`new issue or belatedly presents evidence will not be considered and may be
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`returned….Examples of indications that a new issue has been raised in a
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`reply include new evidence necessary to make out a prima facie case for
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`the patentability or unpatentability of an original or proposed substitute
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`claim, and new evidence that could have been presented in a prior filing.
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`77 Fed. Reg. at 48,767 (emphasis added). The Board has quoted and referenced
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`this language in explaining that “a reply that raises a new issue or belatedly
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`presents evidence will not be considered” and that “a new issue is raised if the
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`reply includes new evidence necessary to make out a prima facie case for the
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`unpatentability of a challenged claim.” BlackBerry Corp v. MobileMedia Ideas,
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`LLC, No. IPR2013-00036 (JYC), Paper 40, at 2. Further, such evidence would be
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`both irrelevant and unfairly prejudicial and therefore not admissible under F.R.E.
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`402 and 403.
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`C. Unreliable Testimony Improper Under F.R.E. 702
`Pursuant to Federal Evidence Rule 702, expert testimony can only be
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`admitted if it is reliable. Rule 702 requires the Board to act as a gatekeeper for
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`expert testimony and exclude such testimony if it is unreliable. See Daubert v.
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`Merrell Dow Pharm., Inc., 509 U.S. 579 (1993); see also 37 C.F.R. § 42.62
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`(Federal Rules of Evidence apply to proceedings before the Board).
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`D. Board May Exclude Or Not Consider Improper Evidence
`The Board has two options if a petitioner submits improper evidence with its
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`reply. CBS Interactive Inc. v. Helferich Patent Licensing, LLC, No. IPR2013-
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`00033 (JYC), Paper 79, at 3. It can exclude or decline to consider the evidence.
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`See id. (“Should there be improper…evidence presented with a reply, the Board,
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`exercising its discretion, may exclude the…related evidence in their entirety, or
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`alternatively, decline to consider the…related evidence.”).
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`III. ARGUMENT
`A. The Belatedly-Introduced O’Neil Reply Declaration
`Liberty chose not to include a declaration by O’Neil with its Petition, but
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`instead waited to introduce her opinions in a Reply Declaration (Exhibit 1032). As
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`demonstrated below, this belatedly-introduced Declaration includes new arguments
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`and constitutes new evidence as to unpatentability that should have been
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`introduced with Liberty’s Petition. It violates the prohibition on raising new issues
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`in a reply brief, and Patent Owner timely objected. (Paper No. 40.) As such,
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`¶¶ 26-27 of the O’Neil Reply Declaration should be excluded.
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`1.
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`New Issues As To Claimed “Selected Vehicle Data”
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`In its Petition, Liberty relied on only paragraph 58 from Nakagawa as
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`disclosing the claim limitation “selected vehicle data related to a level of safety or
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`an insurable risk in operating a vehicle.” (See Petition at 24.) It relied on no
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`supporting declarations as to a POSITA’s understanding of whether Nakagawa
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`disclosed this limitation. (Compare Petition at 24 with Petition at 25 citing
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`Andrews’ opinion as to a POSITA’s understanding for the “database” claim
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`limitation.)
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`With its Reply, Liberty introduced new evidence as to a POSITA’s
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`understanding concerning this claim limitation based on a portion of Nakagawa
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`that was not identified in the Petition. That is, in her Reply Declaration, O’Neil
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`quoted paragraph 65 of Nakagawa in opining that: “a POSITA would find that
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`Nakagawa’s ‘usage data’ ‘relates to a level of safety or an insurable risk in
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`operating a vehicle’ because it includes ‘degree of safe operation’ and ‘danger
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`status’ that are based on determinations of ‘whether the operation and installation
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`statuses of a vehicle are safe or dangerous.’” (O’Neil Reply Declaration at ¶ 26,
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`paragraph 65 text underlined.)
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`To the extent Liberty wanted to rely on paragraph 65 of Nakagawa and
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`O’Neil’s opinions as to how a POSITA would interpret this language, it should
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`have specifically identified this argument and evidence in its Petition, which it did
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`not. (See supra at 2.) As such, ¶ 26 of the O’Neil Reply Declaration should be
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`excluded.
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`2.
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`New Issues As To Claimed “Rating Factors”
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`In its Petition, Liberty relied on paragraph 76 from Nakagawa as disclosing
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`the claimed “rating factors.” (See Petition at 26.) It also quoted from paragraph
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`76, inter alia, as to “driving techniques and the level of safe driving.” (Id.; Ex.
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`2005, ¶ 76.) Liberty did not rely on any supporting declaration as to a POSITA’s
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`understanding of whether Nakagawa disclosed this limitation. (See Petition at 26.)
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`Yet in her Reply Declaration, O’Neil opined that a POSITA would find that
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`Nakagawa discloses rating factors. (See O’Neil Reply Declaration at ¶ 27.)
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`If Liberty wanted to rely on a declaration as to how a POSITA would
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`understand paragraph 76, it should have included this evidence with its Petition,
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`not simply quoted the paragraph. Indeed, O’Neil admitted that if Liberty had
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`asked her, she “would have been able to provide a declaration on the ‘358 patent
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`back at the time of Liberty’s original petition.” (See Ex. 2015, O’Neil Tr. at 97:11-
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`17, emphasis added.) As such, ¶ 27 of the O’Neil Reply Declaration should be
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`excluded.
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`Belatedly-Introduced Andrews Reply Declaration
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`B.
`Liberty submitted a Declaration from Andrews with its Petition (Exhibit
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`1025), in which he offered only conclusory statements as to Nakagawa, with less
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`than one page of text addressing it. (See id. at 17.) Yet, with its Reply, Liberty
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`submitted an Andrews Reply Declaration (Exhibit 1034) that addressed Nakagawa
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`at length, offering a 20-page discussion and opinions on Nakagawa, which should
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`have been offered at the time of filing the Petition and violates the prohibition on
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`raising new issues in a reply brief. Progressive timely objected, and ¶¶ 6, 9, 11,
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`19-24, 26, 28, 30, and 31 of Andrews Reply Declaration should be excluded.
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`(Paper No. 40.)
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`1.
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`New Issues As To Claimed “Database”
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`In its Petition, Liberty relied on paragraphs 61 and 69 from Nakagawa and
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`Andrews’ one-page discussion of Nakagawa in his Petition Declaration as the
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`evidence that Nakagawa anticipated the “database” claim limitation. (See Petition
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`at 26; Ex. 1025 at 17.) As demonstrated below, Liberty improperly introduced
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`new invalidity arguments and evidence through the Andrews Reply Declaration at
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`¶¶ 11, 19-24, 26, 28, 30, and 31 as to the “database” claim limitation.
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`First, Andrews relied on different parts of Nakagawa in his Reply
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`Declaration that were not cited in the Petition or his Petition Declaration. That is,
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`he relied on paragraphs 67-68 and Figure 6 from Nakagawa in arguing that it
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`discloses the “database” claim limitation. (See Andrews Reply Declaration at
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`¶¶ 19-24, 28, and 30.) Indeed, in an apparent attempt to disguise the fact that he
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`was relying on new portions of Nakagawa, Andrews writes, “[a]s I pointed out in
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`my prior Declaration, for example, Nakagawa discloses that ‘the control part 22
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`on the server side updates the “user data” recorded in memory that corresponds to
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`the received ID.’” (See id. at ¶ 28.) Yet, this language does not appear in his
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`Petition Declaration, as he claims. Rather, Andrews is quoting language from
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`paragraph 68 of Nakagawa, which was not cited in his Petition Declaration or in
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`the Petition.
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`Further confirming Andrews’ erroneous characterization of the subject
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`matter addressed in his Petition Declaration, Andrews admitted that he did not
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`opine on “user data.” (Ex. 2016, Andrews Tr. at 296:24-297:13.) He opined on
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`“usage data” in his Petition Declaration, and he concedes that “user data” and
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`“usage data” “are not exactly one and the same interchangeable[.]” (Id. at 296:24-
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`297:13, 299:22-300:4, emphasis added.)
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`Second, Andrews offered new opinions in his Reply Declaration as to how a
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`POSITA would view Nakagawa’s disclosure concerning the “database” claim
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`limitation. In his Petition Declaration, Andrews simply offered the conclusory
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`statement that the “correspondence between a driver’s stored ‘usage data’ and an
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`ID…would be understood by one skilled in the art as indicating a database.”
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`(Andrews Petition Declaration at ¶ 36.) However, in the Andrews Reply
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`Declaration, Liberty improperly offers numerous additional opinions as to a
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`POSITA’s understanding of Nakagawa as follows: “[a]s explained below, a
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`POSITA would understand Nakagawa to disclose a database;” “[a] POSITA would
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`also find that Nakagawa’s ‘user data’ is necessarily stored in a database;” “a
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`POSITA would understand that such data is stored in a form that maintains this
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`link to user ID;” “[t]his is consistent with the understanding of a POSITA;” “a
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`POSITA would understand that ‘user data’ disclosed in Nakagawa is stored in a
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`file that comprises ‘records;’” “a POSITA would understand Nakagawa to disclose
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`a database comprising records;” “[t]his is common sense and certainly would have
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`been understood by a POSITA;” “[a] POSITA would thus understand Nakagawa
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`to disclose a database with ‘operations for searching the records;’” “a POSITA
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`would understand Nakagawa to disclose storing the ‘user data’ in a ‘file’
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`containing records, which necessarily allows a user to ‘retrieve, change, delete,
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`save, or send [the stored information] to an output device,’ such as shown in the
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`user display of Figure 6;” “for at least the reasons stated above, a POSITA would
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`understand Nakagawa to disclose a database comprised of records with operations
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`for searching the records and other functions.” (See Andrews Reply Declaration at
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`¶¶ 11, 19, 22, 23, 26, 28, 30, 31 emphasis added.)
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`Third, the new evidence in Liberty’s Reply is an attempt to fix the lack of a
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`prima facie case. Indeed, Liberty offered no evidence with its Petition to
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`demonstrate that the database claim limitation is inherently disclosed by
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`Nakagawa. In his Petition Declaration, Andrews stated in conclusory fashion that
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`“the correspondence between a driver’s stored ‘usage data’ and an ID…would be
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`understood by one skilled in the art as indicating a database.” (Andrews Petition
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`Declaration at ¶ 36, emphasis added.) This Petition testimony was not sufficient to
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`establish inherency. See Trintec Ind., Inc. v. Top-U.S.A. Corp., 295 F.3d 1292,
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`1295 (Fed. Cir. 2002).
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`As the Board explained in a related case:
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`To establish inherency, that which is missing in the express description must
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`necessarily be present and would be so recognized by one with ordinary
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`skill in the art. Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268
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`(Fed. Cir. 1991). Inherency may not be established by probabilities or
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`possibilities, and the mere fact that a certain thing may result from a given
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`set of circumstance is not sufficient for establishing inherency. In re
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`Oelrich, 666 F.2d 578, 581 (CCPA 1981).
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`(CBM2013-00009, Paper No. 10, at 27, emphasis added.) Indeed, in the Institution
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`Decision for the same patent at issue in this CBM Review, the Board addressed
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`Andrews’ testimony and held that his “meander[ing] around the critical question of
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`inherent disclosure” meant that “Liberty ha[d] not established…inheren[cy].” (Id.)
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`That same description applies to the Andrews Petition Declaration in this
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`proceeding. He meanders around the issue of inherency by simply stating that
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`Nakagawa “indicat[es] a database.” (Andrews Petition Declaration at ¶ 36.)
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`Moreover, Liberty improperly raised new issues with its Reply by offering
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`numerous belated opinions by Andrews as to inherency in his Reply Declaration as
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`follows: “Nakagawa’s ‘user data’ is necessarily stored in a database;”
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`“Nakagawa’s user data is necessarily stored in a database;” “‘user data’…must
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`necessarily be stored in ‘records;’” “[t]o update such stored data keyed to a
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`particular user, the server must necessarily ‘locate and retrieve one or more
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`specific records from among the many records;’” “the particular data to be updated
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`must necessarily be ‘located’ and ‘retrieved;’” “Nakagawa’s discussion of
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`updating a particular user’s data necessarily discloses such a database;” and
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`“Nakagawa to disclose storing the ‘user data’ in a ‘file’ containing records, which
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`necessarily allows a user to ‘retrieve, change, delete, save, or send [the stored
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`information] to an output device.’” (See Andrews Reply Declaration at ¶¶ 19, 21,
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`23, 28, 30, emphasis added.)
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`If Liberty wanted to rely on paragraphs 68-69 and Figure 6 of Nakagawa and
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`the opinions as to a POSITA’s understanding of Nakagawa and inherency in
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`Andrews Reply Declaration, Liberty should have specifically identified them in its
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`Petition and had Andrews opine on them in his Petition Declaration. As such,
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`¶¶ 11, 19-24, 26, 28, 30, and 31 of the Andrews Reply Declaration should be
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`excluded.
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`2.
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`New Issues As To “Storing” And “Transmitting”
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`In his Reply Declaration, Andrews opined that “Nakagawa discloses storing
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`and transmitting ‘selected vehicle data,’” and he relies on paragraphs 48 and 65
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`from Nakagawa as evidence of that disclosure. (See Andrews Reply Declaration at
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`¶ 5, 6, 9.) However, these portions of Nakagawa were not cited in the Petition or
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`the Andrews Petition Declaration. Liberty’s use of these new portions of
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`Nakagawa is an improper attempt to introduce new arguments and evidence with
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`its Reply. (See supra at 2-3.) Indeed, Andrews admitted that if Liberty had asked
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`him, he could have provided “additional opinions” as to Nakagawa when Liberty
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`submitted its Petition, but he “wasn’t asked to do that.” (See Ex. 2016, Andrews
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`Tr. at 284:17-23, emphasis added.) As such, Andrews Reply Declaration at ¶¶ 6
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`and 9 should be excluded.
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`C. Belatedly-Introduced Issues As To Priority
`Liberty argued in its Petition that “the claims of the ‘358 Patent are not
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`entitled to claim priority to the applications issuing as the parent ‘134, ‘970, ‘386,
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`or ‘598 patents.” (See Petition at 4; see also id. at 14, “claims 1, 16-17 and 19-20
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`cannot claim priority to any application dated earlier than January 23, 2004 – the
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`filing date of the ‘598 Patent, and claims 2-15 and 18 cannot claim priority to any
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`application dated earlier than June 3, 2008 – the filing date of the ‘358 Patent.”)
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`Indeed, Andrews even opined in his Petition Declaration that he “understand[s]”
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`that the ‘358 patent “claims priority to an application filed on January 29, 1996”
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`and that he knew that Liberty “disputes the 1996 priority date claimed by the '358
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`Patent.” (Andrews Petition Declaration at ¶ 14.) But, neither Andrews nor O’Neil
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`offered any declaration support for Liberty’s priority arguments with the Petition.
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`However, both Andrews and O’Neil offered declaration support with the Reply.
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`(Andrews Reply Declaration at ¶¶ 43-51; O’Neil Reply Declaration at ¶¶ 22-25.)
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`For example, Liberty argued in its Petition that “[i]ndependent claim 1’s
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`recitation of a ‘server…configured to generate a rating factor based on the
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`selected vehicle data stored in the database’ is an entirely new concept distinct
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`from what those [applications’] written descriptions disclosed.” (Petition at 4,
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`emphasis added.) Yet, Andrews waited until his Reply Declaration to offer this
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`very same opinion that “a POSITA would not clearly conclude that the ‘650 and
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`‘076 disclosures require that a ‘rating factor’…is calculated at the remote server.”
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`(Andrews Reply Declaration, at ¶ 48, emphasis added.)
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`If Liberty wanted to rely on opinions by Andrews and O’Neil as to its
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`priority arguments, it should have had them so opine in Petition Declarations and
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`specifically identified this evidence in the Petition. Patent Owner timely objected
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`(Paper No. 40), and as such, ¶¶ 43-51 of the Andrews Reply Declaration and ¶¶ 22-
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`25 of the O’Neil Reply Declaration should be excluded.
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`IV. CONCLUSION
`For at least these reasons, Patent Owner’s Motion to Exclude should be
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`granted.
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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
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`(216) 586-3939
`(216) 579-0212 (Fax)
`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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`September 30, 2013
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing PATENT OWNER’S MOTION TO
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`EXCLUDE EVIDENCE PURSUANT TO 37 C.F.R. § 42.64(c) was served on
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`September 30, 2013 by causing them to be sent by email to counsel for Petitioner
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`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
`Attorney For Patent Owner
`Progressive Casualty Insurance Co.