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
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
`
`
`______________
`
`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
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
`
`
`
`Case CBM2012-00003
`Patent 8,140,358
`Petitioner, Liberty Mutual Insurance Company (“Petitioner”), respectfully
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`submits this Motion to Exclude pursuant to 37 C.F.R. §§ 42.62 and 42.64, and Sched-
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`uling Order §4(b) (Dkt. 16; 42; 45).
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`As an initial matter, and as Petitioner has indicated in parallel proceedings in-
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`volving these same parties (CBM2012-00010, Paper 46, and CBM2013-00002, Paper
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`48), Petitioner respectfully submits that the Board, sitting as a non-jury tribunal with
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`administrative expertise, is well-positioned to determine and assign the appropriate
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`weight to be accorded to the evidence presented by both Petitioner and Patent Owner
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`Progressive Casualty Insurance Co. (“Patent Owner”) in this patent invalidity trial
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`without the need for formal exclusion. See, e.g., S.E.C. v. Guenthner, 395 F. Supp. 2d
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`835, 842 n.3 (D. Neb. 2005) (admitting expert testimony over objections; “Trial courts
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`should be more reluctant to exclude evidence in a bench trial than a jury trial. . . .
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`Thus, in bench trials evidence should be admitted and then sifted when the district
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`court makes its findings of fact and conclusions of law. In a nonjury case, the trial
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`court is presumed to consider only the competent evidence and to disregard all evi-
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`dence that is incompetent. Where the court has assumed the role of fact-finder in a
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`bench trial, ‘the better course’ is to ‘hear the testimony, and continue to sustain objec-
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`tions when appropriate.’ . . . [T]he court has admitted the testimony of [plaintiff’s ex-
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`pert] and has accorded it appropriate weight.” (citations omitted)); Builders Steel Co. v.
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`Comm’r of Internal Revenue, 179 F.2d 377, 379 (8th Cir. 1950) (vacating Tax Court deci-
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`sion for exclusion of competent and material evidence; “In the trial of a nonjury case,
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`1
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`Case CBM2012-00003
`Patent 8,140,358
`it is virtually impossible for a trial judge to commit reversible error by receiving in-
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`competent evidence, whether objected to or not. An appellate court will not reverse a
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`judgment in a nonjury case because of the admission of incompetent evidence, unless
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`all of the competent evidence is sufficient to support the judgment or unless if affirm-
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`atively appears that the incompetent evidence induced the court to make an essential
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`finding which would not otherwise have been made. . . . On the other hand, a trial
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`judge who, in the trial of a nonjury case, attempts to make strict rulings on the admis-
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`sibility of evidence, can easily get his decision reversed by excluding evidence which is
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`objected to, but which, on review, the appellate court believes should have been ad-
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`mitted.”). Petitioner accordingly submits that it is, as a general matter, better for the
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`Board to have before it a complete record of the evidence submitted by the parties
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`than to exclude particular pieces of it and thereby risk improper exclusion that could
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`later be assigned as error. See, e.g., Builders Steel, 379; Donnelly Garment Co. v. NLRB,
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`123 F.2d 215, 224 (8th Cir. 1942) (finding NLRB’s refusal to receive testimonial evi-
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`dence amounted to a denial of due process; “One who is capable of ruling accurately
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`upon the admissibility of evidence is equally capable of sifting it accurately after it has
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`been received, and, since he will base his findings upon the evidence which he regards
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`as competent, material and convincing, he cannot be injured by the presence in the
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`record of testimony which he does not consider competent or material. Lawyers and
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`judges frequently differ as to the admissibility of evidence, and it occasionally happens
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`that a reviewing court regards as admissible evidence which was rejected by the judge,
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`Case CBM2012-00003
`Patent 8,140,358
`special master, or trial examiner. If the record on review contains not only all evidence
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`which was clearly admissible, but also all evidence of doubtful admissibility, the court
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`which is called upon to review the case can usually make an end of it, whereas if evi-
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`dence was excluded which that court regards as having been admissible, a new trial or
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`rehearing cannot be avoided.”). See also, e.g., Samuel H. Moss, Inc. v. FTC, 148 F.2d 378,
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`380 (2d Cir.), cert. denied, 326 U.S. 734 (1945) (observing that, “if the case was to be
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`tried with strictness, the examiner was right [but w]hy [the examiner] or the Commis-
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`sion’s attorney should have thought it desirable to be so formal about the admission
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`of evidence, we cannot understand. Even in criminal trials to a jury it is better, nine
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`times out of ten, to admit, than exclude evidence and in such proceedings as these the
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`only conceivable interest that can suffer by admitting any evidence is the time lost,
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`which is seldom as much as that inevitably lost by idle bickering about irrelevancy or
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`incompetence. In the case at bar it chances that no injustice was done, but we take
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`this occasion to point out the danger always involved in conducting such a proceeding
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`in such a spirit, and the absence of any advantage in depriving either the Commission
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`or ourselves of all evidence which can conceivably throw any light upon the contro-
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`versy.”).
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`At the same time, however, Petitioner recognizes that this trial is an early ex-
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`ample of a new set of proceedings. Thus, to the extent that the Board intends to ap-
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`ply the Federal Rules of Evidence strictly in these proceedings, cf. 77 Fed. Reg. 48612,
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`48616 (Aug. 14, 2012) (“42.5(a) and (b) permit administrative patent judges wide lati-
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`3
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`Case CBM2012-00003
`Patent 8,140,358
`tude in administering the proceedings to balance the ideal of precise rules against the
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`need for flexibility to achieve reasonably fast, inexpensive and fair proceedings”), Peti-
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`tioner respectfully submits that Patent Owner’s testimonial submissions from its pur-
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`ported expert witnesses, do not meet these standards and should be excluded—in par-
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`ticular, at least ¶¶ 10-149 of EX2007,1 the Declaration of Ivan Zatkovich, ¶ 15 of
`
`EX2005, the Declaration of Michael J. Miller, and ¶¶ 2-5 of EX2013, the Supple-
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`mental Declaration of Michael J. Miller—together with any reference to or reliance on
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`the foregoing in Patent Owner’s Response (Dkt. 33). Petitioner’s objections to these
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`Exhibits were previously set forth in Petitioner’s First Set of Objections to Patent
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`Owner Progressive Casualty Insurance Co.’s Exhibits, served June 19, 2013 and Peti-
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`tioner’s Second Set of Objections to Patent Owner Progressive Casualty Insurance
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`Co.’s Exhibits, served July 3, 2013 (“Objections”) pursuant to 37 C.F.R. § 42.64(b)(1),
`
`see MX1045 §§ III & IV and MX1046 §§ I & II, and are further explained below pur-
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`suant to 37 C.F.R. § 42.64(c).
`
`I. Legal Standard
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`Rule 702 of the Federal Rules of Evidence, which applies to this proceeding (37
`
`C.F.R. § 42.62), governs the admissibility of expert testimony and states: “A witness
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`who is qualified as an expert by knowledge, skill, experience, training, or education
`
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`1 Exhibits are referenced “EX” or, for rebuttal or motion exhibits, “RX” or “MX”;
`
`abbreviations are defined in the Petition (“Pet.,” Dkt. 1), and emphases are added.
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`4
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`Case CBM2012-00003
`Patent 8,140,358
`may testify in the form of an opinion or otherwise if: (a) the expert’s scientific, tech-
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`nical, or other specialized knowledge will help the trier of fact to understand the evi-
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`dence or to determine a fact in issue; (b) the testimony is based on sufficient facts or
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`data; (c) the testimony is the product of reliable principles and methods; and (d) the
`
`expert has reliably applied the principles and methods to the facts of the case.” F.R.E.
`
`702. The proponent of expert testimony must demonstrate admissibility by a pre-
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`ponderance of the evidence, see Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579,
`
`592 n.10 (1993), and Patent Owner has failed to meet this burden. Furthermore, all
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`evidence must be filed in the form of an exhibit. 37 C.F.R. § 42.63(a). However, Pa-
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`tent Owner’s expert, Mr. Miller, has relied on evidence that has not been provided in
`
`the form of an exhibit. See EX2005 ¶ 15.
`
`II. Mr. Zatkovich is Not Qualified to Opine on a POSITA’s Understanding
`of Insurance Matters or Telematics Matters in 1996
`
`Mr. Zatkovich lacks the necessary “scientific, technical, or other specialized
`
`knowledge” on insurance and telematics issues pertinent to the ‘358 patent to provide
`
`testimony on those subjects, but he nonetheless proceeds to do so in his June 11,
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`2013 declaration. See e.g., EX2007 ¶¶ 8, 60-61, 63, 95-107, 111-115, 128-142, 144-149.
`
`Mr. Zatkovich does not even purport to be a POSITA regarding insurance, and thus
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`has no basis to render the various opinions he provides regarding a POSITA’s under-
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`standings of insurance matters. E.g., EX2007 ¶¶ 8, 99, 104; RX1034 (Andrews Rebut-
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`tal Declaration) ¶ 44. In addition, while Mr. Zatkovich purports to interpret disclo-
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`5
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`Case CBM2012-00003
`Patent 8,140,358
`sures in the ’650 application originally made in its January 1996 grandparent, and he
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`concedes a POSITA in the technical aspects of the ‘358 patent must have “as of January
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`1996 …at least one to two years of experience with telematics systems for vehi-
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`cles…including communications and locations technologies” (EX2007), he had no
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`such experience in 1996. Id. ¶¶ 4, 5 (asserting telematics experience only with Utility
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`Partners); EX2008 (CV) at 4 (this work began in 1996).
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`As set forth in Petitioner’s Objections and further explained above, Mr. Zatko-
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`vich is not an expert in the pertinent subject matter qualified to provide the opinions
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`contained in at least ¶¶ 10-149 of Exhibit 2007 and lacks the necessary “scientific,
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`technical, or other specialized knowledge [to] help the trier of fact to understand the
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`evidence or to determine a fact in issue” because he is not sufficiently knowledgeable
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`about insurance matters or telematics matters as of 1996, in violation of F.R.E. 702.
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`Accordingly, to the extent that the Board determines to apply the Federal Rules of
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`Evidence strictly in this proceeding, these identified portions of Exhibit 2007, and any
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`reference to or reliance on this testimony in Patent Owner’s Response, should be ex-
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`cluded.
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`III.
`Mr. Miller Has Relied on Improper Evidence in Forming His
`Opinions
`
`In paragraph 15 of Exhibit 2005, Mr. Miller purports to define “actuarial class,”
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`and alleges that his “definition is consistent with the definition in the Risk Classifica-
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`tion Statement of Principles of the American Academy of Actuaries.” Patent Owner,
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`6
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`Case CBM2012-00003
`Patent 8,140,358
`however, did not provide this document as an Exhibit, as required by 37 C.F.R. §§
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`42.63(a). Petitioner objects to Patent Owner’s purported reference to (in Exhibits
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`2005 and 2013) and any reliance on Exhibit 2012 from another trial involving a differ-
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`ent patent (CBM2012-00002) as an exhibit not of record in this CBM2012-00003 pro-
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`ceeding and not properly numbered or submitted in this CBM proceeding, pursuant
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`to 37 C.F.R. §§ 42.6(c), 42.51(b)(1), 42.63, and 42.64(b)(2). See also 37 C.F.R. § 42.223.
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`Because the document referred to in paragraph 15 of Exhibit 2005 and para-
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`graphs 2-5 of Exhibit 2013 has not been included as an exhibit, to the extent that the
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`Board determines to apply the Federal Rules of Evidence strictly in this proceeding,
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`any reference to the document or reliance thereon by Mr. Miller or Patent Owner
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`should be excluded.
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`7
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`Case CBM2012-00003
`Patent 8,140,358
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`Respectfully submitted,
`
`
`ROPES & GRAY LLP
`
`
`
`
`
`
`By /J. Steven Baughman/
`J. Steven Baughman, Lead Counsel
`James R. Myers (pro hac vice)
`Nicole M. Jantzi
`ROPES & GRAY LLP
`700 12th St. NW, Suite 900
`Washington, DC 20005
`Steven.baughman@ropesgray.com
`James.myers@ropesgray.com
`Nicole.jantzi@ropesgray.com
`
`Attorneys for Petitioner Liberty Mutual Insurance Co.
`
`Mailing address for all PTAB correspondence:
`ROPES & GRAY LLP
`IPRM – Floor 43
`Prudential Tower
`800 Boylston Street
`Boston, Massachusetts 02199-3600
`
`8
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`September 30, 2013
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`CERTIFICATE OF SERVICE
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`It is certified that a copy of PETITIONER LIBERTY MUTUAL INSUR-
`
`
`
`
`
`ANCE CO.’S MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND
`
`42.64 has been served in its entirety on the Patent Owner as provided in 37 CFR §
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`42.6.
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`The copy has been served on September 30, 2013 by causing the aforemen-
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`tioned document to be electronically mailed to:
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`Calvin P. Griffith, at: cpgriffith@jonesday.com
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`James L. Wamsley, III at: jlwamsleyiii@jonesday.com
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`John V. Biernacki at: jvbiernacki@jonesday.com
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`pursuant to the Petitioner and Patent Owner’s agreement.
`
`
` /s/ Jordan M. Rossen
`Jordan M. Rossen
`
`
`ROPES & GRAY LLP
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