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
`
`—————————————
`
`PATENT OWNER’S OBSERVATIONS ON
`TESTIMONY OF MARY L. O’NEIL
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`CLI-2145882v1
`
`
`
`—————————————
`
`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
`
`—————————————
`
`PATENT OWNER’S OBSERVATIONS ON
`TESTIMONY OF MARY L. O’NEIL
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`CLI-2145882v1
`
`
`
`The Patent Owner, Progressive Casualty Ins. Co., has the following
`
`Case CBM2012-00003
`Patent 8,140,358
`
`
`
`observations on the September 13, 2013 cross-examination testimony of the
`
`Petitioner’s reply declarant, Mary L. O’Neil:
`
`1.
`
`In Ex. 2015, p. 43, line 17 to p. 44, line 20, Ms. O’Neil testified
`
`regarding the type of data that would be collected to establish proper actuarial
`
`classes:
`
`But in order to actually use them as classes in setting
`Q.
`insurance premiums, am I correct that expected claims loss data
`would be used to determine whether they were actually useable in that
`fashion?
`MR. MYERS: Objection. 402, 403.
`A.
`It is not that simple of an analysis to determine what the
`appropriate -- Well, let me go back.
`You’re setting up the class, is what I understand. Is that
`correct?
`Q. You’re considering setting up that class, that’s right.
`That’s my hypothetical.
`A.
`So we don’t already have it. Well, I think what would be
`done, if one did not want to collect any information ahead of time, is
`we would hypothecate that drivers with more accidents might be
`drivers who have more claims. So we set up the classes and we
`collect data, and then we look at the data to see if indeed it is true that
`those drivers that have more accidents have more claims.
`Q.
`So the data you collect is claims data. Am I right?
`
`CLI-2145882v1
`
`1
`
`
`
`
`
`Case CBM2012-00003
`Patent 8,140,358
`
`A. Well, you collect more than that. You would collect
`premium data, claims data, obviously the number of exposures. You
`would collect a lot of data.
`
`This testimony is relevant because it supports that making an actuarial class (and
`
`its associated rating factor) involves determining or estimating expected claims
`
`losses (whether from historical claims loss data or other means), as Progressive’s
`
`expert Mr. Miller testified. This refutes Liberty’s and Ms. O’Neil’s criticism of
`
`Mr. Miller on this point (Reply Decl., Ex. 1032 at ¶¶ 18-19, and Reply at 11:5-12).
`
`2.
`
`In Ex. 2015, p. 98, line 11 to p. 99, line 22, Ms. O’Neil testified as
`
`follows with respect to the term “rating factor”:
`
`Is the term -- Well, what do you mean, the term is
`Q.
`utilized in current classification systems?
`A.
`In the current classification system, which is described, I
`don’t believe the ’358 patent goes into detail, but it is described in
`more detail in the ’970. The current system describes several rating
`characteristics, such as age, sex, marital status, and so on. The
`standard class plan utilizes those. And I believe it comes up with
`possibly 260 or so cells of people that are classed -- might be classed
`in. So there is a lengthy description of that.
`And so how do we price an insured using that system? We
`would -- we could have a premium for each of those cells, but as I
`mentioned earlier, because of the fact that the data by each little cell
`are not analyzed all the time to come up with a different premium in
`that particular cell in particular, for convenience sake a single
`
`CLI-2145882v1
`
`2
`
`
`
`
`
`Case CBM2012-00003
`Patent 8,140,358
`
`classification is taken as a base, and it’s usually like the adult driver.
`And all the other prices are related to that. And it’s sort of a
`classification relativity.
`But any rate manual, which is the thing the agent uses to price a
`policy, will call those rating factors because they are used to rate or
`price the policy. And so for convenience sake, for the agent’s use, for
`publication of the rate manual, all of the cells were ratioed to the base
`class.
`
`So now the insurance company only has to publish new base
`rates. They don’t have to publish a price for each class every time
`they issue the rate manual to the agent.
`
`This testimony is relevant because it is inconsistent with Liberty’s Reply argument
`
`(at 11:5-12) and Ms. O’Neil’s testimony at ¶ 19 of her Rebuttal Declaration (Ex.
`
`1032), and is consistent with the way in which Progressive’s expert Mr. Miller
`
`testified that the term “rating factor” is used and understood in the insurance
`
`industry.
`
`3.
`
`In Ex. 2015, p. 100, line 25 to p. 101, line 6, Ms. O’Neil testified as
`
`follows with respect to the common term “rating factor”:
`
`Q. Well, I didn’t understand your last answer when you said
`that they aren’t calculated but they’re a ratio. Isn’t the ratio
`calculated?
`A. Well, all right. I guess if you want to call it that, yeah,
`it’s calculated in that respect. It’s a ratio.
`
`CLI-2145882v1
`
`3
`
`
`
`
`This testimony is relevant because it is an admission that the common term “rating
`
`Case CBM2012-00003
`Patent 8,140,358
`
`factor” associated with actuarial classification plans is a calculated numerical
`
`value. This common understanding of “rating factor” is within the Board’s
`
`preliminary construction of “rating factor” and is part of the disclosure of the
`
`priority documents to the ’358 patent, and contravenes Liberty’s argument on this
`
`point (Reply at 11:5-12).
`
`4.
`
`In Ex. 2015, p. 101, line 20 to p. 102, line 15, Ms. O’Neil testified:
`
`Q. Well, you just described a procedure in which rating
`factors are used in coming up with rates for a whole universe of
`people. I’m just asking whether in your experience that’s the way
`insurance companies go about doing that.
`* * *
`In my experience, every company has a rate manual, and
`A.
`they have agents that need to apply that. And so they all have the
`same procedures basically where they will publish the relativities,
`which you’re calling a rating factor, and they will publish the base
`rate. And that is to be used by the agents to rate the policy.
`
`Now, at this point in time a lot of places aren’t even using
`those. They’re using little calculators.
`
`This testimony is relevant for the same reason as Observation No. 3. In addition, it
`
`is relevant because it is an admission that insurers commonly use rating factors in
`
`calculating premiums based on actuarial classes.
`
`CLI-2145882v1
`
`4
`
`
`
`5.
`
`In Ex. 2015, p. 102, line 16 to p. 105, line 14, Ms. O’Neil testified:
`
`Case CBM2012-00003
`Patent 8,140,358
`
`
`
`Q. A new exhibit. So I’ll hand you an exhibit that’s been
`premarked in -- and it has three numbers because it applies in three of
`the CBMs that we are here talking about today. So CBM2012-3,
`Progressive Exhibit 2014; CBM2013-4, Progressive Exhibit 2018;
`CBM2013-9, Progressive Exhibit 2027.
`(Progressive Exhibit 2014, 2018, 2027, [a single document]
`having been marked for identification, is attached hereto.)
`Q. Ms. O’Neil, do you recognize that document?
`A. Yes. This is -- The cover is, I guess, the copy of a cover
`of a book, and you have attached to that a chapter in that book that I
`contributed. The book was a compendium of chapters written by
`different people.
`Q.
`So you wrote Chapter 3 of this book “Dealing with
`Automobile Insurance in North America”?
`A.
`Correct.
`Q. Okay. So do you recall the book?
`A. Yes.
`Q. And the procedure you just described for insurers to use
`base premiums and rating factors, that’s described in this chapter,
`correct?
`Correct, yes. The purpose of this chapter, I might add,
`A.
`was Mr. Lemaire was putting this book together, and so it was to
`provide general background as to how auto insurance basically
`worked at the time.
`
`CLI-2145882v1
`
`5
`
`
`
`
`
`Case CBM2012-00003
`Patent 8,140,358
`
`So on page 47 you present a sample formula and rate
`Q.
`calculation, correct?
`A.
`Correct.
`Q. And at the top there you’re adding up rating factors,
`coming up with a total rating factor, right?
`A.
`Correct.
`Q. And then the computation that is made is to compute the
`liability coverage premium by base premium?
`A.
`Right. This is what I explained to you in words before.
`If you just look right at the page before, it describes which class we’re
`making the price for is a youthful unmarried male, age 18, owner or
`principal operator, with driver training, without a good student
`discount, with pleasure use, one accident, inexperienced, using one
`standard performance car. So all of those things in that list were the
`risk characteristics. And so we had to now find this cell within that
`class plan for that price.
`Now, the insured could have published the price. But as I said
`before, one class is selected as the base, which is what is referred to in
`the equation or base premium. That base premium for the coverage
`and territory is the adult driver with none of these special discounts, et
`cetera. And this relativity rating factor is applied to that. And the
`reason the other part of this is added on is because the rating
`algorithm that was in place at the time was to look at driving record
`experience such as number of accidents, and add the other factor on,
`not multiply it, and come up with this total amendment to the base
`premium. And the base premium was, like I said, for just like an adult
`
`CLI-2145882v1
`
`6
`
`
`
`
`
`Case CBM2012-00003
`Patent 8,140,358
`
`driver without any of these other characteristics that we just
`mentioned.
`
`This testimony is relevant for the same reason as Observation Nos. 3 and 5.
`
`
`
`
`
`
`
`
`
`
`September 30, 2013
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`By:
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`JONES DAY
`
`/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.
`
`CLI-2145882v1
`
`7
`
`
`
`CERTIFICATE OF SERVICE
`
`I certify that a copy of the foregoing PATENT OWNER’S
`
`OBSERVATIONS ON TESTIMONY OF MARY L. O’NEIL were served on
`
`September 30, 2013 by causing them to be sent by email to counsel for the
`
`Petitioner at the following email addresses:
`
`Steven.baughman@ropesgray.com
`Nicole.jantzi@ropesgray.com
`James.myers@ropesgray.com
`LibertyMutualPTABService@ropesgray.com
`
`
`
`/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.
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
