Trial@USPTO.GOV
`571-272-7822
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`LIBERTY MUTUAL INSURANCE COMPANY
`Petitioner,
`
`v.
`
`PROGRESSIVE CASUAL INSURANCE COMPANY
`Patent Owner,
`
`
`Case CBM2012-00003 (JL)
`Patent 8,140,358
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`LEE, Administrative Patent Judge.
`
`
`ORDER
`(DENIAL OF GROUNDS -- 37 C.F.R. § 42.208(b))
`
`INTRODUCTION
`
`This petition for covered business method patent review of Patent 8,140,358
`(’358 patent) was filed on September 16, 2012. Petitioner has asserted four
`hundred and twenty two (422) grounds of unpatentability against the 20 claims of
`the ’358 patent, averaging more than 21 grounds per claim. The Patent Owner has
`not yet filed a preliminary response. In this order, we deny one hundred and ninety
`six (196) of the asserted grounds as not meeting the threshold for institution of
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`trial. See 37 C.F.R. §§ 42.208(b) and 300(a). In any response to be filed by the
`Patent Owner, the denied grounds need not be addressed.
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`There are two types of grounds being denied.
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`The first type includes those grounds which rely on the disclosure in Kosaka
`(Japanese Published Application H4-182868, Published June 30, 1992, Ex. 1003)
`of a wireless transmitter on the gear of a diver, which transmits an emergency
`signal to an aid boat or buoy when evaluation in real-time of the diving data
`indicates an extremely high risk situation, to meet the claim limitation of “a
`wireless transmitter configured to transfer the selected vehicle data retained within
`the memory to a distributed network and a server” without any reference’s
`disclosing wireless transmission of selected vehicle data for subsequent evaluation.
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`For the first type, the grounds of obviousness are, for independent claim 1:
`
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`over Kosaka,
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`over Kosaka and Bouchard
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`The grounds are, for dependent claims 2-20, over Kosaka and over Kosaka and
`Bouchard, plus at least one more reference relied on by the Petitioner to meet the
`additional features recited in dependent claims 2-20.
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`The second type includes those same grounds as in the first type, but
`modified to substitute the wireless transmitter of Kosaka with a more sophisticated
`wireless transmission system disclosed in another reference to provide or convey
`“different types of data more efficiently to better determine driver performance.”
`(Pet. 38:5-9; 40:4-8; 42:16 to 43:5).
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`For the second type, the grounds of obviousness are, for claim 1:
`over Kosaka and Scapinakis
`over Kosaka,, Bouchard, and Scapinakis
`over Kosaka and Eisenmann
`over Kosaka, Bouchard, and Eisenmann
`over Kosaka and Stanifer
`over Kosaka,, Bouchard, and Stanifer
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
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`The grounds of obviousness for claims 2-20 are the same as those listed above for
`claim 1, but with the addition of at least one more reference relied on by the
`Petitioner to account for the additional features recited in dependent claims 2-20.
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`Using the system of designating asserted grounds of unpatentability as
`revealed in the chart on pages 17-22 of the petition, we identify the denied grounds
`for instituting trial as follows:
`1:2
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`2:2
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`1:4
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`2:4
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`1:6
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`2:6
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`1:7
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`2:7
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`1:10
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`2:10
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`1:11
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`2:11
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`1:14
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`2:14
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`1:15
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`2:15
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`7:2
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`8:2
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`7:4
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`8:4
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`7:6
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`8:6
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`7:7
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`8:7
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`5:2
`5:4
`5:6
`5:7
`5:10
`5:11
`5:14
`5:15
`11:2
`11:4
`11:6
`11:7
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`6:2
`6:4
`6:6
`6:7
`6:10
`6:11
`6:14
`6:15
`12:2
`12:4
`12:6
`12:7
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`3:2
`3:4
`3:6
`3:7
`3:10
`3:11
`3:14
`3:15
`9:2
`9:4
`9:6
`9:7
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`4:2
`4:4
`4:6
`4:7
`4:10
`4:11
`4:14
`4:15
`10:2
`10:4
`10:6
`10:7
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
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`10:10
`10:11
`10:14
`10:15
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`11:10
`11:11
`11:14
`11:15
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`12:10
`12:11
`12:14
`12:15
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`18:20
`18:22
`18:24
`18:26
`20:19
`20:21
`20:23
`20:24
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`19:36
`19:38
`19:40
`19:41
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`20:36
`20:38
`20:40
`20:41
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`8:10
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`8:11
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`8:14
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`8:15
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`14:2
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`14:4
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`14:6
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`14:7
`14:10
`14:11
`14:14
`14:15
`17:2
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`17:4
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`17:6
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`17:8
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`18:11
`18:13
`18:15
`18:17
`20:2
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`20:4
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`20:6
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`20:7
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`9:10
`9:11
`9:14
`9:15
`15:2
`15:4
`15:6
`15:7
`15:10
`15:11
`15:14
`15:15
`18:2
`18:4
`18:6
`18:8
`17:20
`17:22
`17:24
`17:26
`19:19
`19:21
`19:23
`19:24
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`7:10
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`7:11
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`7:14
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`7:15
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`13:2
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`13:4
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`13:6
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`13:7
`13:10
`13:11
`13:14
`13:15
`16:2
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`16:4
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`16:6
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`16:8
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`17:11
`17:13
`17:15
`17:17
`19:2
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`19:4
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`19:6
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`19:7
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
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`19:10
`19:11
`19:14
`19:15
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`20:10
`20:11
`20:14
`20:15
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`19:44
`19:45
`19:48
`19:49
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`20:44
`20:45
`20:48
`20:49
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`20:27
`19:27
`20:28
`19:28
`20:31
`19:31
`20:32
`19:32
`The claimed invention
`The ’358 patent discloses a data logging device that tracks the operation of a
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`vehicle or operator behavior. (Spec. 1:33-34). A processor reads data from an
`automotive bus that transfers data from vehicle sensors to other components and
`stores the data into memory. (Spec. 1:40-45). A communication device links the
`data logging device to a network of computers. (Spec. 1:44-45).
`
`Claim 1 is the only independent claim, and is reproduced below:
`
`1.
`A system that monitors and facilitates a review of data
`collected from a vehicle that is used to determine a level of safety or
`cost of insurance comprising:
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`a processor that collects vehicle data from a vehicle bus that
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`represents aspects of operating the vehicle;
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`a memory that stores selected vehicle data related to a level of
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`safety or an insurable risk in operating a vehicle;
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`a wireless transmitter configured to transfer the selected vehicle
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`data retained within the memory to a distributed network and a server;
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`a database operatively linked to the server to store the selected
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`vehicle data transmitted by the wireless transmitter, the database
`comprising a storage system remote from the wireless transmitter and
`the memory comprising records with operations for searching the
`records and other functions;
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
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`where the server is configured to process selected vehicle data
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`that represents one or more aspects of operating the vehicle with data
`that reflects how the selected vehicle data affects a premium of an
`insurance policy, safety or level of risk; and
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`where the server is further configured to generate a rating factor
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`based on the selected vehicle data stored in the database.
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`Thus, the claimed invention is about collecting sensed vehicle data from a
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`vehicle bus, storing in memory that sensed vehicle data which pertains to level of
`safety or insurable risk in operating the vehicle, and wirelessly transmitting that
`stored data to a distributed network and a server. A database is operatively linked
`to the server to store the wirelessly transmitted vehicle data, and that database is
`remote from the wireless transmitter and the memory providing the data for
`wireless transmission. Also, the server receiving the wirelessly transmitted vehicle
`data performs two functions: (1) processes the vehicle data with data that reflects
`how the vehicle data affects an insurance policy premium, safety, or level of risk;
`and (2) generates a rating factor based on the vehicle data stored in the database.
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`The wireless transmitter transmits vehicle data already stored in a memory to
`a distributed network and a server, and a database linked to the server in turn stores
`the wirelessly transmitted data. That database is remote from the wireless
`transmitter and the memory. Thus, according to the claim, at least the database
`operatively linked to the server is not onboard the vehicle.
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`-6-
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
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`Each of claims 1-10, 14, 16, 19, and 20 depends directly on claim 1. Each of
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`claims 11-13 depends directly on claim 10. Claim 15 depends directly on claim
`14, claim 17 directly on claim 16, and claim 18 directly on claim 17.
`Kosaka
`In this opinion, specific references to the content of Kosaka are to the
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`English translation of the original Japanese Unpublished Application, that is
`contained in Exhibit 1003. Kosaka discloses a combination risk evaluation device
`and insurance premium determination device that makes use of the risk evaluation
`device. (Kosaka 2:col.1:53 to 2:col.2:3). The risk evaluation device evaluates risk
`in moving bodies such as vehicles or insurance customers. (Id.) With regard to
`prior art, Kosaka describes that pre-existing conventional insurance premium
`determination systems have determined rates based on static attributes of the
`customer. (Kosaka 2:col.2:15-19). For instance, Kosaka describes that in pre-
`existing systems, it is normal for there to be no insurance premiums between
`operators who always operate safely, and operators who occasionally take risks,
`and that it is therefore unfair to apply the same insurance premium to both.
`(Kosaka 2:col.2:36-42). It is a stated objective of Kosaka that insurance premiums
`can be increased or decreased by “continually” determining insurance premium
`changes through the detection of states that lead to risk. (Kosaka 2:col.2:42-52).
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`Figure 1 of Kosaka is reproduced below, which illustrates a high level
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`block diagram of Kosaka’s device:
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`Fig.1 shows a block diagram of Kosaka’s device
`External sensor 1 and internal sensor 2 detect data about the vehicle or
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`insurance customer to provide as input to fuzzy logic part 3 (FLU 3).
`(Kosaka 4:col.2:4-20). The FLU 3 determines the comprehensive risk based on the
`input sensor data, making use of risk evaluation values stored in fuzzy memory 4
`(FLM 4). (Kosaka 4:col.2:20-26). The premium calculation part 6 (CAL 6)
`performs temporal integration and computation of risk evaluation values, and
`thereby calculates insurance premiums. (Kosaka 4:col.2:26-31). A system clock
`CLK 5 supplies a timing signal to CAL 6, and CAL 6 is connected to an output
`interface MRW 7. (Kosaka 4:col.2:31-35). MRW 7 includes an electronic
`currency transfer request means or a prepayment amount erasing means,
`making use of MEM 8, a monetary amount file part including memory that
`stores a prepayment balance or a transfer-side currency on-line system.
`(Kosaka 4:col.2:36-38).
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`-8-
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`Kosaka discloses specific use of its device of Figure 1 in two application
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`embodiments. In the first, the device is incorporated within a diving watch to be
`worn by a diver while diving. (Kosaka 4:col.2:39-41). In the second, the device is
`installed on a vehicle. (Kosaka 6:col.2:3-6). The vehicle embodiment employs as
`a sensor a doppler radar, or alternatively ultrasound waves, to detect the operating
`speed of the vehicle. (Kosaka 6:col.2:7-11). For the diver embodiment only,
`Kosaka discloses that an electromagnetic wave antenna 18 is attached to a fin 17
`that is worn on the foot of the diver, and that the antenna transmits an emergency
`signal to a buoy or an aid boat if the logical output of the device reaches an
`emergency level. (Kosaka 5:col.1:13-18). In the alternative, an ultrasonic wave
`generator may be provided instead of the antenna 18 to send the emergency signal.
`(Kosaka 5:col.1:18-21).
`
`Kosaka describes an effect of its invention as follows (emphasis
`added)(Kosaka 9:col.1:27-34):
`Moreover, by using the risk evaluation device employing a risk
`evaluation part that operates by fuzzy logic together with an insurance
`premium determination system, change in insurance premiums in
`accordance with continually varying risk evaluation values can be
`settled in real time, thereby allowing insurance to be more equitable.
`
`
`ANALYSIS
`When promulgating the regulations of Part 42, Code of Federal Regulations,
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`Title 35, the Board considered “the effect of the regulations on the economy, the
`integrity of the patent system, the efficient administration of the Office, and the
`ability of the Office to timely complete proceedings” as mandated by 35 U.S.C.
`§ 326(b). It is provided in 37 C.F.R. § 42.1(b) that: “[t]his part shall be construed
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`

`
`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
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`to secure the just, speedy, and inexpensive resolution of every proceeding.”
`Furthermore, the Petitioner has the burden of proof to establish that it is entitled to
`the requested relief. 37 C.F.R. § 42.20(c). Thus, we will address only the basis,
`rationale, and reasoning put forth by the Petitioner in the petition, and resolve all
`vagueness and ambiguity in Petitioner’s arguments against the Petitioner.
`
`As noted above, claim 1 requires for storage both a local memory and a
`database remote from the local memory. Sensed selected vehicle data is first
`stored in the local memory and then sent by a wireless transmitter to a distributed
`network and a server. A database remote from the wireless transmitter and the
`local memory is operatively linked to the server and stores the wirelessly
`transmitted vehicle data. The server processes the wirelessly transmitted selected
`vehicle data with data that reflects how that vehicle data affects a premium of an
`insurance policy, safety, or level of risk, and generates a rating factor based on the
`selected vehicle data stored in the database.
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`For both the local memory and the remote database, Petitioner asserts
`inherent disclosure based on the disclosure in Kosaka that risk evaluation values
`and insurance premiums “may” be determined subsequently. It is true that while
`Kosaka discloses that its risk evaluation means and insurance premium change
`determination means operate “in real time” (Kosaka 3:col.2:9-12;19-21;
`4:col.1:30-34;45-47), it also indicates that the calculations “may” be performed
`subsequently as is noted by Petitioner. However, in order to preserve data values
`to be processed later, the selected sensed vehicle data need only be stored in one
`location. Petitioner’s inherency argument cannot carry the day for both the local
`memory and the remote database.
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`-10-
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
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`More importantly, the only wireless data transmitter disclosed in Kosaka is
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`that in the diver embodiment for sending a distress signal to an aid boat or a buoy
`when the evaluated data indicates an extremely hazardous condition. Claim 1
`requires a wireless transmitter that transmits the vehicle data stored in the local
`memory to a distributed network and a server and specifies that the server which
`receives the wireless transmission makes the risk evaluation. Petitioner has not
`identified any disclosure, in Kosaka’s vehicle embodiment, that sensed vehicle
`data is wirelessly transmitted to any component anywhere. Even in Kosaka’s diver
`embodiment, what is wirelessly transmitted is a distress signal and not sensed data.
`Also, an aid boat or a buoy is not a distributed network or a server.
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`In that regard, Petitioner’s argument is as follows (Pet. 30:9-15):
`POSITA would have found obvious, based on Kosaka’s disclosure of
`transferring selected vehicle data (e.g., states that contribute to risk,
`such as speed) to a risk evaluation unit, including sending signals via
`an antenna to a remote receiver, to implement the system of Kosaka to
`comprise a wireless transmitter configured to transfer the selected
`vehicle data to the risk evaluation unit via a distributed network for a
`more rapid transmission of data. See Ex. 1025, Andrews Dec. ¶¶ 23-
`24.
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`The argument has numerous infirmities. As noted above, Kosaka does not
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`disclose wireless transmission of sensed vehicle data to any component anywhere.
`The wireless transmission in Kosaka’s diver embodiment transmits only a distress
`signal after the collected risk data has been evaluated and determined as invoking
`an emergency situation. Petitioner has not advanced a credible rationale why
`wireless transmission of an emergency distress signal after risk data has been
`evaluated and determined as invoking an emergency situation would have
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`suggested wireless transmission of the raw data before risk evaluation to a
`distributed network and a server which performs the evaluation. Furthermore,
`focusing on the above-quoted text, we regard Petitioner’s stated reasoning of
`applying wireless transmission of data from the sensing unit to the risk evaluation
`unit, through a distributed network, for the purpose of achieving more rapid
`transmission of data to be unsupported by the record and simply unpersuasive.
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`In Kosaka, the data sensing component and the risk evaluation component
`are both parts of the same device worn by the diver or positioned onboard the
`vehicle. The declaration of Andrews, in the cited paragraphs 23 and 24, contains
`no testimony to the effect that the speed of data transmission from Kosaka’s
`sensing component to risk evaluation component, both being parts of the same
`onboard device, would be improved by using wireless transmission through a
`distributed network. We note that for such an assertion, even if there is testimony
`presenting that opinion, the testimony should also provide a detailed explanation.
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`For all of the foregoing reasons pertaining to the local memory, the remote
`database, and the wireless transmission to a distributed network and a server, we
`conclude that Petitioner has not demonstrated that it is more likely than not that
`claim 1 of the ’358 patent is unpatentable over Kosaka.
`
`Petitioner has also asserted that claim 1 of the ’358 patent is unpatentable
`over the combined teachings of Kosaka and Bouchard (US Patent 5,465,079).
`Bouchard, however, is applied by the Petitioner only for its teachings with regard
`to claim 1’s requirement of a vehicle bus from which sensed vehicle data is
`collected, and does not cure the deficiencies of Kosaka with regard to the other
`features of claim 1 as discussed above. Accordingly, we conclude that Petitioner
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`-12-
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`has not demonstrated that it is more likely than not that claim 1 of the ’358 patent
`is unpatentable over Kosaka and Bouchard.
`
`Based on the asserted grounds relying on Kosaka alone and Kosaka in
`combination with Bouchard, Petitioner: (1) adds Scapinakis to form two more
`grounds against claim 1 based on Kosaka and Scapinakis, and Kosaka, Bouchard,
`and Scapinakis; (2) adds Eisenmann to form two more grounds against claim 1
`based on Kosaka and Eisenmann, and Kosaka, Bouchard, and Eisenmann; and
`(3) adds Stanifer to form two more grounds against claim 1 based on Kosaka and
`Stanifer, and Kosaka, Bouchard, and Stanifer.
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`In adding each of Scapinakis, Eisenmann, and Stanifer, to Kosaka and to
`Kosaka and Bouchard, Petitioner simply states that one with ordinary skill in the
`art would have recognized that Kosaka’s device would be enhanced by
`incorporating more sophisticated wireless telematics system discussed in
`Scapinakis, Eisenmann, and Stanifer to convey different types of data more
`efficiently to better determine driver performance. (Pet. 38:5-9; 40:4-8;43:1-5).
`However, as we discussed above, Petitioner has not persuasively argued even that
`one with ordinary skill has reason to wirelessly transmit any vehicle data to
`anywhere. Thus, Petitioner’s argument that Kosaka’s wireless transmission of data
`would benefit by enhancement via adoption of a more sophisticated telematics
`wireless transmission system is unpersuasive. Indeed, it would appear that to send
`vehicle data from Kosaka’s data collection component to Kosaka’s data evaluation
`component, both parts of the same onboard device, the more sophisticated the
`telematics the more inefficient it would be. And as noted above, Petitioner’s
`witness Mr. Andrews provides no explanation as to why that is not so.
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`Even without the problem relating to any need for a more sophisticated
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`telematics system, Petitioner still has not cleared the problems relating to a local
`memory and a remote database, notwithstanding the addition of Scapinakis,
`Eisenmann, or Stanifer. For all of the foregoing reasons, we conclude that
`Petitioner has not demonstrated that it is more likely than not that claim 1 of the
`’358 patent is unpatentable over: (1) Kosaka and any one of Scapinakis,
`Eisenmann, and Stanifer; and (2) Kosaka, Bouchard, and any one of Scapinakis,
`Eisenmann, and Stanifer.
`
`Based on all the asserted grounds against claim 1 as discussed above, for
`each dependent claims 2-20, Petitioner adds one or more additional references to
`account for the features added by the dependent claims. The additional reference
`or references do not cure the deficiencies noted above with regard to the features of
`independent claim 1. We conclude that Petitioner has not demonstrated that it is
`more likely than not that claims 2-20 of the ’358 patent are unpatentable over any
`one of the above-discussed grounds with the addition of one or more references
`relied on by the Petitioner to account for the features of the dependent claims.
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`As is stated above at the beginning of the analysis, we address only the
`basis, rationale, and reasoning put forth by the Petitioner and resolve all vagueness
`and ambiguity in Petitioner’s arguments against the Petitioner. If there is any other
`way Scapinakis, Eisenmann, and Stanifer can be combined with Kosaka and yield
`a better combination, it is the responsibility of the Petitioner to clearly articulate it.
`It would be unfair to expect the Patent Owner to conjure up arguments against its
`own patent and just as inappropriate for the Board to take the side of the Petitioner
`to salvage an inadequately expressed ground proposing an alternative rationale.
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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`We recommend that all petitioners clearly express and explain their
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`positions, especially on precisely how the teachings of multiple references are used
`in combination to meet a claim feature. We also recommend that all petitioners
`clearly state what the differences are between the subject matter claimed in a claim
`alleged as obvious over prior art, and the prior art. Here, Petitioner has not clearly
`identified the differences between claim 1 and Kosaka, and the Petitioner’s
`reasoning on adding Scapinakis, Eisenmann, or Stanifer to the basic combination
`of Kosaka or Kosaka and Bouchard is vague and ambiguous at best.
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`CONCLUSION
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`It is
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`ORDERED that each of the one hundred ninety six (196) alleged grounds
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`of unpatentability based in whole or in part on Kosaka and identified in the
`Introduction section of this opinion is denied as a basis for instituting trial;
`FURTHER ORDERED that no trial will be instituted based on those one
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`hundred ninety six (196) grounds of unpatentability; and
`FURTHER ORDERED that the Patent Owner shall not, in any response,
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`address the merits of any of the one hundred and ninety six (196) denied grounds
`of unpatentability for instituting trial.
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`

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`CBM-2012-00003
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.
`
`By Electronic Transmission
`Attorney for Petitioner Liberty Mutual Ins. Co.:
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`J. Steven Baughman, Esq.
`Ropes & Gray LLP
`steven.baughman@ropesgray.com
`
`
`Attorneys for Patent Owner Progressive Casualty Ins. Co.:
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`Calvin P. Griffith, Esq.
`James L. Wamsley, III, Esq.
`John V. Biernacki, Esq.
`Jones Day
`cpgriffith@jonesday.com
`jlwamsleyiii@jonesday.com
`jvbiernacki@jonesday.com
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