UNITED STATES PATENT AND TRADEMARK OFFICE
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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 REPLY IN SUPPORT OF ITS MOTION TO
`EXCLUDE EVIDENCE PURSUANT TO 37 C.F.R. § 42.64(c)
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`CLI-2148847v2
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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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`—————————————
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`Case CBM2012-00003
`Patent 8,140,358
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`PATENT OWNER’S REPLY IN SUPPORT OF ITS MOTION TO
`EXCLUDE EVIDENCE PURSUANT TO 37 C.F.R. § 42.64(c)
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`CLI-2148847v2
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`Patent Owner Progressive Casualty Ins. Co. (“Progressive”) hereby submits
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`Case CBM2012-00003
`Patent 8,140,358
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`this Reply in support of its Motion to Exclude.
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`I.
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`LEGAL STANDARD
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`37 C.F.R. § 42.304 requires that Liberty’s Petition “specify where each element
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`of the claim is found in the prior art” and that Liberty “identify[] specific portions of
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`the evidence that support the challenge.” See 37 C.F.R. § 42.304(b)(4),(5). Progressive
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`quotes this language on page 2 of its Motion, yet nowhere in Liberty’s Opposition
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`brief does it ever mention this rule.
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`Instead, Liberty discusses NLRB and FTC cases from the 1940s and a Tax
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`Court decision from Nebraska. (Opp. at 1.) Then, Liberty cites 37 C.F.R. § 42.5 as
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`“permit[ting] administrative patent judges wide latitude in administering the
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`proceedings[.]” (Opp. at 1, emphasis added.) And, based on this “wide latitude”
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`under 37 C.F.R. § 42.5, Liberty concludes that its “evidence is entirely proper, while
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`Progressive’s objections are baseless.” (Id. at 1-2.)
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`However, 37 C.F.R. § 42.5 is inapplicable. It only applies to “situation[s] not
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`specifically covered by this part[.]” 37 C.F.R. 42.5(a). The situation at issue is plainly
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`“covered” in Part 42 under 37 C.F.R. § 42.304. Liberty’s failure to address section
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`42.304 in its brief (and its resort to the inapplicable section 42.5) does not alter the
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`mandatory requirement that its Petition must specifically identify where each claim
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`element allegedly appears in each prior art reference.
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`CLI-2148847v2
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`1
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`On page 2 of its motion, Progressive quoted the requirement under 37 C.F.R.
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`Case CBM2012-00003
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`§ 42.23(b) that a “reply may only respond to arguments raised in the…patent owner
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`response.” In addition, Progressive quoted the treatment of this rule in the Office
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`Patent Trial Practice Guide, which confirms that new evidence in a Reply is
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`prohibited if it is necessary to make out a prima facie case or could have been presented
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`in the Petition. (Motion at 2-3; see 77 Fed. Reg. 48,756, 48,767 (Aug. 14, 2012).)
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`Once again, nowhere in Liberty’s Opposition does it even mention this mandatory
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`rule.
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`Rather, Liberty simply claims that it “made a prima facie case of invalidity based
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`on the evidence submitted with the Petition” and that to view it any other way
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`“contradicts both common sense and the Board’s Institution Decision[.]” (Opp. at 2.)
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`Not so. The Trial Practice Guide addresses this exact situation of Petitioner
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`introducing new evidence after a proceeding has commended. It makes clear a reply
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`that “include[s] new evidence necessary to make out a prima facie case…and
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`new evidence that could have been presented in a prior filing” indicates that an
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`improper new issue has been raised. 77 Fed. Reg. at 48,767 (emphasis added).
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`Indeed, this language would be meaningless if deficiencies in Petitioner’s prima facie
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`case could not be identified after the Board institutes a proceeding.
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`II. ARGUMENT
`Liberty relied on ¶ 58 from Nakagawa as disclosing the claimed limitation of
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`“selected vehicle data related to a level of safety or an insurable risk in operating a
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`vehicle[.]” (Petition at 24.) Yet, with its Reply, it relied on ¶ 65 from Nakagawa and
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`on declaration evidence from O’Neil as to how a POSITA would purportedly
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`understand ¶ 65 as disclosing this limitation. (Motion at 5.)
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`Liberty claims that it “defies common sense” that O’Neil could be prevented
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`from relying on ¶ 65 in challenging Progressive’s Response, but this is a straw man
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`argument. (Opp. at 4.) Progressive did not challenge Liberty’s discussion of ¶ 65 in
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`the abstract but rather its specific reliance on ¶ 65, and O’Neil’s opinion as to how a
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`POSITA would view it, as disclosing this limitation. (Motion at 5.) If Liberty wanted
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`to rely on this evidence to demonstrate unpatentability, it needed to so specify in its
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`Petition and should have included O’Neil’s opinion in her Petition Declaration. (See
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`supra at 1-2.)
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`Liberty also claims that O’Neil’s new testimony is proper “rebuttal” and
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`“‘help[s] crystallize issues for decision,’…whether the disclosures in Nakagawa meet
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`this limitation.” (Opp. at 4.) But Liberty’s reliance on this new evidence only
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`crystallizes the deficiencies in its prima facie case, the failure of its Petition to specify
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`supporting evidence pursuant to 37 C.F.R. § 42.304(b), and the need to exclude this
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`new evidence as violating 37 C.F.R. § 42.23(b). Liberty concludes by stating that it
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`“has introduced no ‘new evidence as to unpatentability[.]’” (Opp. at 5, emphasis
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`added.) To the contrary, Liberty’s Reply introduces a new paragraph of Nakagawa
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`CLI-2148847v2
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`and new declaration evidence. This is – by definition – new evidence, and it should
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`be excluded.
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`Liberty parrots these same arguments as to the other claim elements, i.e.,
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`“rating factor,” “database,” and “storing” and “transmitting.” (Opp. at 5-12.) Liberty
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`again attempts to blame Progressive for its need to introduce different paragraphs of
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`Nakagawa and new declarations, but it cannot escape the fact that its new evidence is
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`offered to plug holes in its prima facie case. (See id.; Motion at 6-12.)
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`For example, Liberty argues that it properly raised an inherency argument as to
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`the database limitation. While its Petition contains a conclusory statement that
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`Nakagawa “explicitly…or at a minimum inherently” discloses a database (Petition at
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`25; Opp. at 6), the only support cited was the testimony in the Andrews Petition
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`Declaration opining that a POSITA would understand ¶ 69 of Nakagawa “as
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`indicating a database.” (Motion at 9-11.) It is a damning fact that the only evidence
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`Liberty can cite that the database limitation is “necessarily” disclosed is from the
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`untimely Andrews Reply Declaration. (Opp. at 8.)
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`Within pages of claiming that it was entitled to raise inherency arguments in its
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`Reply, Liberty contradicts itself by claiming that Progressive improperly raised
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`inherency arguments in its Response. Liberty argues that Progressive’s “‘expert’
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`declarations” and “reliance on inherent disclosure is a new position that stands in
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`stark contrast to what Progressive argued in its Preliminary Response, where it
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`CLI-2148847v2
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`attempted to rely on explicit disclosures.” (Opp. at 13, emphasis in original.) But
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`Progressive was not obligated to make all arguments in its Preliminary Response and
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`was entitled to show in its full Response that Liberty had failed to prove inherent
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`disclosure, and this was the first opportunity it had to offer an expert declaration. In
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`contrast, Liberty had no justification or right to withhold its inherency arguments until
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`its Reply, and it was permitted to rely on witness declarations with its Petition.
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`Indeed, Liberty argues it should get the “last word” on issues for which it bears
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`the burden (Opp. at 12), but it confuses getting the last word with impermissibly
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`introducing new arguments and evidence at the Reply stage. (See supra at 1-2.)
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`III. CONCLUSION
`Liberty invites error by raising new issues in its Reply. Progressive has not
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`been afforded any opportunity to offer its own expert declarations to challenge
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`Liberty’s new invalidity arguments as to inherency, priority, a POSITA’s
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`understanding, or the myriad of other new issues identified by Progressive in its
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`Motion. The AIA did not create a Due Process loop hole, such that a patentee could
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`be denied an opportunity to respond substantively to an unpatentability argument
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`with its own evidence. Yet that is exactly what Liberty urges by arguing that the ‘358
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`patent should be found unpatentable based on the new issues and evidence raised in
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`its Reply.
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`CLI-2148847v2
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`Case CBM2012-00003
`Patent 8,140,358
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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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`October 8, 2013
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`CLI-2148847v2
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`6
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing PATENT OWNER’S REPLY IN
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`SUPPORT OF ITS MOTION TO EXCLUDE EVIDENCE PURSUANT TO 37
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`C.F.R. § 42.64(c) was served on October 8, 2013 by causing them to be sent by email
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`to counsel for Petitioner at the following email addresses:
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`Steven.baughman@ropesgray.com
`Nicole.jantzi@ropesgray.com
`James.myers@ropesgray.com
`LibertyMutualPTABService@ropesgray.com
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`/s/ John V. Biernacki
`John V. Biernacki
`Registration No. 40,511
`JONES DAY
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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