Trials@uspto.gov
`571-272-7822
`
`
`
` Paper 60
`
`Entered: January 23, 2014
`
`
`
`
`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 CBM2012-00004
`Patent 6,064,970
`____________
`
`
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`CHANG, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`571-272-7822
`
`
`
` Paper 60
`
`Entered: January 23, 2014
`
`
`
`
`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 CBM2012-00004
`Patent 6,064,970
`____________
`
`
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`CHANG, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`Case CBM2012-00004
`Patent 6,064,970
`
`I.
`
`INTRODUCTION
`
`
`
`Liberty Mutual Insurance Company (“Liberty”) filed a petition on
`
`September 16, 2012, requesting a covered business method patent review of
`
`U.S. Patent No. 6,064,970 (“the ’970 patent”) pursuant to section 18(a) of
`
`the Leahy-Smith America Invents Act (“AIA”).1 Paper 1 (“Pet.”).
`
`Progressive Casualty Insurance Company (“Progressive”) filed a patent
`
`owner preliminary response. Paper 8 (“Prelim. Resp.”). Taking into
`
`account Progressive’s preliminary response, the Board determined that the
`
`information presented in Liberty’s petition demonstrated that it was more
`
`likely than not that the challenged claims are unpatentable. Pursuant to
`
`35 U.S.C. § 324, the Board instituted this trial on January 25, 2013, as to
`
`claims 1 and 3-18 of the ’970 patent. Paper 10 (“Dec.”).
`
` During the trial, Progressive filed a patent owner response (Paper 25,
`
`“PO Resp.”), and Liberty filed a reply to the patent owner response
`
`(Paper 30, “Reply”). An oral hearing was held on October 21, 2013.2
`
`The Board has jurisdiction under 35 U.S.C. § 6(c). This decision is
`
`a final written decision under 35 U.S.C. § 328(a) as to the patentability of
`
`claims 1 and 3-18 of the ’970 patent. We hold that claims 1 and 3-18 of
`
`the ’970 patent are unpatentable under 35 U.S.C. § 103(a).
`
`
`
`1 Pub. L. 112-29, 125 Stat. 284, 329 (2011).
`2 The oral arguments for the instant trial and for CBM2012-00002 were
`merged and conducted at the same time. A transcript of the oral hearing is
`included in the record as Paper 58 (“Tr.”).
`2
`
`
`
`Case CBM2012-00004
`Patent 6,064,970
`
`A. Related Proceedings
`
`Liberty indicates that the ’970 patent was asserted against it in
`
`Progressive Casualty Ins. Co. v. Safeco Ins. Co. of Ill., Case No. 1:10-cv-
`
`01370 (N.D. Ohio). Pet. 5. The ’970 patent also is subject to a covered
`
`business method patent review in CBM2012-00002. A final written decision
`
`in CBM2012-00002 is entered concurrently with this decision.
`
`B. The ’970 Patent
`
` The ’970 patent relates to a method for determining an automobile
`
`insurance premium based on data collected from monitored motor vehicle
`
`operational characteristics and operator’s driving characteristics. Ex. 1001,
`
`Abs.; 3:61-66. The method assesses vehicle usage by collecting and
`
`recording monitored vehicle data, such as miles driven, types of roads
`
`driven, speeds driven, rate of acceleration, and rate of braking. Id. at 4:27-
`
`29; 6:29-43. According to the ’970 patent, the method determines insurance
`
`costs more precisely and fairly, because new actuarial classes generated
`
`based on actual usage of the vehicle and driver behavior are better predictors
`
`of loss. Id. at 4:27-29; 4:53-56.
`
`Claims 1, 4-6, and 18 are independent. Claim 3 depends directly from
`
`claim 1; claims 7-15 depend ultimately from claim 6; and claims 16 and 17
`
`depend directly from claim 5. Claim 4, reproduced below, is illustrative of
`
`the claimed subject matter of the ’970 patent.
`
`3
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`Case CBM2012-00004
`Patent 6,064,970
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`4. A method of insuring a vehicle operator for a selected
`
`period based upon operator driving characteristics during the
`period, comprising, steps of:
`
`generating an initial operator profile;
`
`generating an insured profile for the vehicle operator
`prior to any monitoring of any of the vehicle operator’s driving
`characteristics wherein the insured profile comprises coverage
`information, including limits and deductibles, for determining a
`base cost of vehicle insurance for the vehicle operator;
`
`monitoring the vehicle operator’s driving characteristics
`during the selected period; and
`
`deciding a total cost of vehicle insurance for the selected
`period based upon the vehicle operator’s driving characteristics
`monitored in that selected period and the base cost of
`insurance.3
`
`C. Covered Business Method Patent
`
`Upon consideration of Liberty’s contentions in the petition and
`
`Progressive’s arguments in the preliminary response, the Board, in the
`
`Decision on Institution, determined that the ’970 patent is a covered business
`
`method patent as defined in section 18(a)(1)(E) of the AIA and 37 C.F.R.
`
`§ 42.301, because at least one claim of the ’970 patent is directed to a
`
`covered business method. Dec. 3-8. Accordingly, the Board concluded that
`
`the ’970 patent is eligible for a covered business method patent review. Id.
`
`In its patent owner response, Progressive argues that the Board must
`
`conduct a claim-by-claim analysis and determine that every challenged
`
`
`
`3 Ex. 1001, Reexam. Cert., 1:50-65 (original emphases and bracketed
`matters omitted).
`
`4
`
`
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`Case CBM2012-00004
`Patent 6,064,970
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`claim is directed to a covered business method, before it is authorized, under
`
`section 18(a)(1)(E) of the AIA, to review all of the challenged claims.
`
`PO Resp. 2-3, n.1. Progressive asserts that the Board exceeded its “statutory
`
`authority to institute review of any patent claim which the Board has not
`
`determined to be directed to a covered business method.” Id.
`
`Progressive’s argument is based on an erroneous statutory
`
`construction that interprets the word “patent” in the statutory provision on
`
`what is subject to review as “claim.” We decline to adopt such an
`
`interpretation.
`
`As in any statutory construction analysis, we begin with the language
`
`of the statute. In re Swanson, 540 F.3d 1368, 1374-75 (Fed. Cir. 2008);
`
`Duncan v. Walker, 533 U.S. 167, 172 (2001); Crandon v. United States, 494
`
`U.S. 152, 158 (1990). “In the absence of a clearly expressed legislative
`
`intention to the contrary, the language of the statute itself must ordinarily be
`
`regarded as conclusive.” United States v. James, 478 U.S. 597, 606 (1986)
`
`(internal quotation marks and citations omitted). “It is well settled law that
`
`the plain and unambiguous meaning of the words used by Congress prevails
`
`in the absence of a clearly expressed legislative intent to the contrary.”
`
`Hoechst AG v. Quigg, 917 F.2d 522, 526 (Fed. Cir. 1990).
`
`Section 18(d)(1) of the AIA defines the term “covered business
`
`method patent” to mean (emphases added):
`
`[A] patent that claims a method or corresponding apparatus for
`performing data processing or other operations used in the
`practice, administration, or management of a financial product
`
`5
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`Case CBM2012-00004
`Patent 6,064,970
`
`or service, except that the term does not include patents for
`technological inventions.
`
`If Congress intended to limit the availability of the covered business
`
`method patent review on a claim-by-claim basis, as urged by Progressive, it
`
`could have used the term “claim” rather than “patent.” Notably, when
`
`specifying the subject matter for review, Congress could have used the
`
`language “a claim that is directed to a method or corresponding apparatus”
`
`rather than “a patent that claims a method or corresponding apparatus.”
`
`Section 18(d)(1) of the AIA sets forth a single threshold based on just one
`
`claim—the satisfaction of which qualifies an entire patent as eligible for
`
`review—rather than a test that must be applied on a claim-by-claim basis to
`
`justify review of each claim.4 Therefore, a patent is eligible for a covered
`
`business method patent review if the subject matter of at least one claim is
`
`directed to a covered business method. Nothing in the legislative history, or
`
`other parts of the AIA, requires us to deviate from the plain meaning of the
`
`definition set forth in section 18(d)(1) of the AIA, as proposed by
`
`Progressive. Moreover, Progressive has not identified any statutory
`
`provision or legislative history that requires “each” claim for which trial is
`
`instituted to meet the test for a covered business method patent.
`
`Further, Progressive provides no meaningful explanation as to why
`
`the Board’s analysis—e.g., “[d]etermining a cost of vehicle insurance is a
`
`
`
`4 See also Transitional Program for Covered Business Method Patents –
`Definitions of Covered Business Method Patent and Technological
`Invention; Final Rule, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012).
`6
`
`
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`Case CBM2012-00004
`Patent 6,064,970
`
`financial problem rather than a technical problem” (Dec. 8)—was incorrect.
`
`PO Resp. 2-3, n. 1.
`
`For the foregoing reasons, we disagree with Progressive that the
`
`Board exceeded its statutory authority to institute a covered business method
`
`patent review as to claims 1 and 3, 5-18 of the ’970 patent.
`
`D. Prior Art Relied Upon
`
`Liberty relies upon the following prior art references:
`
`July 4, 1995
`Nov. 7, 1995
`Mar. 8, 1990
`Aug. 16, 1995
`
`(Ex. 1010)
`(Ex. 1004)
`(Ex. 1005)
`(Ex. 1007)
`
`US 5,430,432
`Camhi
`Bouchard US 5,465,079
`Pettersen WO 90/02388
`Herrod
`GB 2 286 369 A
`
`Paul Dorweiler, Notes on Exposure and Premium Bases in XVI,
`Part II, PROCEEDINGS OF THE CASUALTY ACTUARIAL SOCIETY 319-343
`(1930) (“Dorweiler”) (Ex. 1009).
`
`FLA. DEPT. OF INS., 1988 Automobile Insurance Shoppers’ Guide
`(1988) (“Florida Guide”) (Ex. 1008).
`
`N.Y. STATE INS. DEPT., 1995 Consumers Guide on Automobile
`Insurance (Downstate) (1995) (“New York Guide”) (Ex. 1006).
`
`
`
`
`
`
`
`
`
`
`
`
`7
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`Case CBM2012-00004
`Patent 6,064,970
`
`E. Grounds of Unpatentability
`
`The Board instituted the instant covered business method patent
`
`review based on the following grounds of unpatentability:
`
`Claims
`
`Basis References
`
`1, 3, 6-8, 10, 11,
`13, 14, and 18
`
`§ 103
`
`Bouchard, Pettersen, and Herrod
`
`4, 5, 16, and 17
`
`§ 103
`
`Bouchard, Pettersen, and Florida Guide
`
`9
`
`§ 103
`
`Bouchard, Pettersen, Herrod, and Camhi
`
`12 and 15
`
`§ 103
`
`Bouchard, Pettersen, Herrod, and Dorweiler
`
`
`
`II. ANALYSIS
`
`A. Claim Construction
`
`
`
`In a covered business method patent review, claim terms are given
`
`their broadest reasonable construction in light of the specification of the
`
`patent in which they appear. 37 C.F.R. § 42.300(b). Under the broadest
`
`reasonable construction standard, claim terms are given their ordinary and
`
`customary meaning as would be understood by one of ordinary skill in the
`
`art in the context of the entire disclosure. In re Translogic Tech. Inc., 504
`
`F.3d 1249, 1257 (Fed. Cir. 2007). In that regard, we must be careful not to
`
`read limitations from a particular embodiment appearing in the written
`
`description into the claim if the claim language is broader than the
`
`embodiment. In re Van Geuns, 988 F.2d 1181, 1184 (Fed. Cir. 1993).
`
`8
`
`
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`Case CBM2012-00004
`Patent 6,064,970
`
`1. “actuarial class” (claims 1, 3, 6-15, and 18)
`
`Claim 1 recites “generating [actuarial] classes of insurance, which
`
`group operators or vehicles having a similar risk characteristic.” Liberty
`
`proposes that the claim term “actuarial class” should be construed as
`
`“a combination/group/groupings related to loss/risk/safety which are
`
`determined from classifications/characteristics representative of motor
`
`vehicle operational characteristics and driver behavior for which data is
`
`gathered.” Pet. 20-21 (citing Ex. 1003, 937-38). Progressive counters that
`
`the claim term should be construed as “a grouping of risks (i.e., insureds)
`
`with similar risk characteristics and expected insurance claims loss (or
`
`insurance costs).” PO Resp. 12; see also id. at 9-13. Progressive argues that
`
`its proposed construction is consistent with the specification and the
`
`understanding of one of ordinary skill in the art. Id. at 9-10 (citing Ex. 1001,
`
`4:52-54 (“new and more precise actuarial classes are considered to be better
`
`predictors of loss because they are based on actual use of the vehicle and the
`
`behaviors demonstrated by the driver.”)).
`
`Although we agree with Progressive that, in light of the specification
`
`and in the context of vehicle insurance, actuarial classes are generated based
`
`on expected loss, we are not persuaded that the construction proposed by
`
`either Liberty or Progressive is the broadest reasonable interpretation of the
`
`claim term “actuarial class.” The phrases that contain the “/” symbol in
`
`Liberty’s proposed construction are subject to multiple interpretations,
`
`which cause confusion. For instance, replacing “/” symbol with the word
`
`“or” would render the construction too broad, and replacing “/” symbol with
`
`9
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`Case CBM2012-00004
`Patent 6,064,970
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`the word “and” would render the construction too narrow. Further, as
`
`acknowledged by Liberty during the oral hearing, “a combination/
`
`group/groupings” may simply be read as “grouping.” Tr. 79:9-80:6.
`
`On the other hand, Progressive’s proposed construction would render
`
`the claim limitation “having a similar risk characteristic” recited in claim 1
`
`insignificant, if not wholly superfluous. Progressive’s proposed construction
`
`also would redefine the term “risks” as “insureds” to exclude a grouping of
`
`vehicles. Such an interpretation would be inconsistent with the claim
`
`language “generating [actuarial] classes of insurance, which group operators
`
`or vehicles,” and inconsistent with the specification of the ’970 patent.
`
`See, e.g., Ex. 1001, 1:28-35 (the “current system of insurance creates
`
`groupings of vehicles and drivers (actuarial classes) based on the following
`
`types of classifications. Vehicle: Age, manufacturer, model; and value.”);
`
`id. at 4:30-52 (“Examples of possible actuarial classes developed from
`
`vehicle provided data.”)
`
`Progressive, through its arguments regarding the asserted grounds of
`
`unpatentability based in part on Herrod, attempts to import limitations into
`
`the construction of the claim term “actuarial class”—requiring homogeneity
`
`as pertaining to acceleration data from different locations, and the risk
`
`characteristics of all drivers resident in the household. PO Resp. 25-33.
`
`We decline to accept those additional requirements as part of the broadest
`
`reasonable interpretation, because it would import limitations into the
`
`claims, and it would be inconsistent with the specification of the ’970 patent.
`
`For instance, some of the actuarial classes provided in the specification are
`
`10
`
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`Case CBM2012-00004
`Patent 6,064,970
`
`based on data that are not associated with any location or household—e.g.,
`
`“driving time in minutes by each driver of the insured vehicle,” “number of
`
`minutes driving at high/low risk times,” and “number of sudden acceleration
`
`situations.” Ex. 1001, 4:30-52. It is well established that if a feature is not
`
`necessary to give meaning to what the inventor means by a claim term, it
`
`would be “extraneous” and should not be read into the claim. Renishaw
`
`PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1249 (Fed. Cir. 1998);
`
`E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430,
`
`1433 (Fed. Cir. 1988).
`
`Moreover, we decline to import those limitations into the claims in
`
`absence of a special definition set forth in the specification. An inventor
`
`may rebut the presumption that a claim term be given its ordinary meaning
`
`by providing a definition of the term in the specification with reasonable
`
`clarity, deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480
`
`(Fed. Cir. 1994). Here, the parties have not alleged that the inventor of the
`
`’970 patent acted as his own lexicographer and provided a special definition
`
`in the specification for the claim term “actuarial class” that is different from
`
`its recognized meaning to one with ordinary skill.
`
`In light of the claims and specification of the ’970 patent, we construe
`
`the claim term “actuarial class” broadly, but reasonably, as “a grouping
`
`related to expected loss, which is determined from motor vehicle
`
`characteristics or driving characteristics.”
`
`11
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`Case CBM2012-00004
`Patent 6,064,970
`
`2. “initial operator profile” (claim 4)
`
`Liberty proposes to construe the claim term “initial operator profile”
`
`as “initial files or information with respect to the operator or the insuring
`
`thereof.” Pet. 20 (citing Ex. 1003, 756). Progressive counters that Liberty’s
`
`proposed construction is overly broad and fails to give meaning to the word
`
`“profile.” PO Resp. 13. According to Progressive, the claim term should be
`
`construed as “an initial collection of actual driving data associated with a
`
`driver that distinguishes that driver from other drivers and is related to
`
`insurance.” Id.
`
`We note that the specification of the ’970 patent does not assign or
`
`suggest a particular definition for the term “initial operator profile.” In fact,
`
`that claim term, in its entirety, does not appear in the specification other than
`
`in the claims. Progressive cites, instead, to a discussion of “operator
`
`profiles” in the specification (id):
`
`It is yet another object of the present invention to generate
`actuarial classes and operator profiles relative thereto based
`upon actual driving characteristics of the vehicle and driver, as
`represented by the monitored and recorded data elements for
`providing a more knowledgeable, enhanced insurance rating
`precision.
`
`Ex. 1001, 5:28-33 (emphasis added).
`
`The plain and ordinary meaning of the term “profile” is “a set of
`
`characteristics or qualities that identify a type or category of person or
`
`thing.”5 Nothing in the specification or the plain and ordinary meaning of
`
`
`5 RANDOM HOUSE WEBSTER’S COLLEGE DICTIONARY 1053 (9th ed. 1999).
`
`12
`
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`Case CBM2012-00004
`Patent 6,064,970
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`the term “profile” precludes two drivers having the same initial operator
`
`profile. Therefore, we decline to import the limitation “that distinguishes
`
`that driver from other drivers” into the claims, as suggested by Progressive.
`
`See Renishaw, 158 F.3d at 1249.
`
`In the light of the specification, we construe the claim term “initial
`
`operator profile” broadly, but reasonably, as “an initial collection of
`
`information associated with an operator that is related to motor vehicle
`
`characteristics or driving characteristics.”
`
`3. “insured profile” (claim 4)
`
`Claim 4 recites “wherein the insured profile comprises coverage
`
`information, including limits and deductibles, for determining a base cost of
`
`vehicle insurance for the vehicle operator.” Claim 5 recites “determining an
`
`initial insured profile for the operator of the vehicle prior to any monitoring
`
`of any data elements representative of an operating state of the vehicle or an
`
`action of the operator of the vehicle.”
`
`
`
`Liberty proposes to construe the claim term “initial insured profile”
`
`the same as “initial operator profile” to mean “initial files or information
`
`with respect to the operator or the insuring thereof.” Pet. 20 (citing Ex.
`
`1003, 756). Although both terms are similar, we nevertheless decline to give
`
`two different claim terms the same construction. See CAE Screenplates Inc.
`
`v. Heinrich Fiedler GmbH & Co. KG, 224 F.3d 1308, 1317 (Fed. Cir. 2000)
`
`(“In the absence of any evidence to the contrary, we must presume that the
`
`use [of] different terms in the claims connotes different meanings.”).
`
`13
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`Case CBM2012-00004
`Patent 6,064,970
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`Progressive argues that the claim term “insured profile” should be
`
`construed as “basic insurance information pertaining to the insured from
`
`which an initial insurance cost is determined.” PO Resp. 14 (emphasis
`
`added). Progressive’s proposed construction, however, would render the
`
`claim limitation “for determining a base cost of vehicle insurance” recited in
`
`claim 4, and the word “initial” in the claim term “initial insured profile”
`
`recited in claim 5, insignificant, if not wholly superfluous.
`
`Consistent with the language of claim 4, the specification of the ’970
`
`patent provides: “This insured profile includes the information about
`
`[insurance] coverages including limits and deductibles, which are necessary
`
`for establishing the appropriate cost of insurance of the subject insured.”
`
`Ex. 1001, 10:36-39.
`
`In the light of the claims and specification, we construe the claim term
`
`“insured profile” broadly, but reasonably, as “insurance information
`
`pertaining to the insured and the insured vehicle,” which includes, for
`
`example, insurance coverage information such as limits and deductibles.
`
`4. “cost of insurance” and “base cost of insurance” (claims 1, 4, and 5)
`
`Liberty contends that the claim term “cost of insurance” should be
`
`construed as “a/one or more or all cost(s) associated with insurance of the
`
`vehicle, including, but not limited to, a cost to the insured and/or
`
`insurer/underwriter associated with the insurance.” Pet. 21 (citing Ex. 1003,
`
`758-61). On the other hand, Progressive argues that, in the context of the
`
`claim, the word “cost” refers to the insured’s cost (i.e., the premium), and
`
`14
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`Case CBM2012-00004
`Patent 6,064,970
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`not the insurer’s cost. PO Resp. 14-15. We agree with Progressive, as such
`
`a construction would be consistent with the specification and claims of the
`
`’970 patent.
`
`The specification of the ’970 patent provides that “the following
`
`information would produce a unique vehicle insurance cost. . . . A change to
`
`any of this information would result in a different premium being charged, if
`
`the change resulted in a different actuarial class for that variable.” Ex. 1001,
`
`1:56-2:16 (emphases added). Claim 5 recites “identifying a surcharge or
`
`discount to be applied to the base cost [of vehicle insurance],” and
`
`“producing a final cost of vehicle insurance for the selected period from the
`
`base cost and the surcharge or discount.” In the context of the specification
`
`and claims, “cost of insurance” is the premium paid by the policyholder for
`
`the insurance coverage. The plain and ordinary meaning of the term
`
`“premium” is the amount paid in installment by a policyholder for coverage
`
`under a contract.6
`
`
`
` Therefore, in the light of the specification and claims, we construe the
`
`claim term “cost of insurance” as “the amount paid or to be paid by the
`
`policyholder for insurance coverage of a selected time period under the
`
`policy contract.” Similarly, we construe the claim term “base cost of
`
`insurance” as “the initial amount paid or to be paid by the policyholder for
`
`insurance coverage under the policy contract, during a time period, before
`
`any surcharge or bonus is applied.”
`
`
`
`6 RANDOM HOUSE WEBSTER’S COLLEGE DICTIONARY 1041 (9th ed. 1999).
`
`15
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`Case CBM2012-00004
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`5. “safety standard” (claims 5, 10, 11, 13, 14, and 16-18)
`
`Liberty proposes that the claim term “safety standard” be construed as
`
`“value/criteria associated with the promotion of safety/prevention of
`
`risk/loss/injury.” Pet. 21 (citing Ex. 1003, 761). Progressive does not
`
`dispute Liberty’s proposed construction. The specification of the ’970
`
`patent does not provide a special definition.
`
`The ordinary meaning of the claim term “safety standard” includes
`
`a measure or criterion of exemption from injury, danger, or loss.”7
`
` In the
`
`context of the vehicle insurance, Liberty’s proposed interpretation is broad,
`
`consistent with that ordinary meaning, and consistent with the specification
`
`as it would be understood by one of ordinary skill in the art. See, e.g.,
`
`Ex. 1001, 8:44-46 (“Select[ed] ones of the plurality of data elements are
`
`recorded when the ones are determined to have an identified relationship to
`
`the safety standards.”).
`
`We, therefore, adopt Liberty’s proffered construction as the broadest
`
`reasonable construction consistent with the specification. But we further
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`clarify that the “/” symbol should be replaced with the word “or”—“value or
`
`criteria associated with the promotion of safety or prevention of risk, loss, or
`
`injury.”
`
`
`
`7 RANDOM HOUSE WEBSTER’S COLLEGE DICTIONARY 1157 (9th ed. 1999).
`
`16
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`Case CBM2012-00004
`Patent 6,064,970
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`B. The Level of Ordinary Skill in the Art
`
`On the record before us, the evidence shows that the level of ordinary
`
`skill in the art is high.8 We also note that a hypothetical person of ordinary
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`skill in the art possesses ordinary skill both in the determination of insurance
`
`premiums and in telematics. PO Resp. 21-23. Notably, conventional
`
`insurance schemes that use actuarial classes to determine vehicle insurance
`
`costs were well known in the art at the time of the invention. See, e.g.,
`
`Prelim. Resp. 13-14; 33-34; PO Resp. 23 (stating one of ordinary skill in the
`
`art “would have had knowledge of multi-variant analysis of risk
`
`classifications . . . [and] actuarial standards applicable to risk classification
`
`systems.”).
`
`We agree with Progressive that the Florida Guide and New York
`
`Guide, cited by Liberty, reflect conventional or basic knowledge of one with
`
`ordinary skill in the art, and include the conventional insurance
`
`determination methods disclosed in the background section of the ’970
`
`patent. Prelim. Resp. 13-14 (stating the Florida and New York Guides
`
`“discuss the same subject matter (i.e., the existence of traditional actuarial
`
`
`
`8 For instance, Liberty submits that a person of ordinary skill in the art as to
`insurance pricing would have at least a Bachelor of Science (“B.S.”) in
`Mathematics, or equivalent, with at least five years of experience in the
`insurance industry setting premiums for auto insurance, and as an associate
`in the Casualty Actuarial Society. Ex. 1011 ¶ 17. Liberty also provides that
`a person of ordinary skill in the art as to telematics data would have at least a
`B.S. degree in electrical engineering, computer engineering, computer
`science, or the equivalent thereof, and at least one to two years of experience
`with vehicle telematics systems. Ex. 1014 ¶ 17.
`17
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`Case CBM2012-00004
`Patent 6,064,970
`
`classes) that . . . is disclosed in the background section of the ’970 patent”);
`
`id. at 34 (stating the cited portions of the Florida Guide are “essentially
`
`identical to the prior art knowledge disclosed in columns 1 and 2 of the ’970
`
`patent.”). We conclude that the background section of the ’970 patent
`
`(Ex. 1001, 1:17-2:37) reflects the level of ordinary skill in the art.
`
`Therefore, one with ordinary skill in the art would have had a thorough
`
`understanding of using the principle of actuarial classes to determine
`
`vehicle insurance costs.
`
`The ’970 patent also indicates that the electronic motor vehicle control
`
`and operating systems were known in the art at the time of invention, and
`
`those systems could be modified readily to obtain the desired types of
`
`information relevant to determine the cost of insurance. Ex. 1001, 3:25-28.
`
`Indeed, Liberty’s expert, Mr. Scott Andrew, testifies that “several companies
`
`had developed vehicle telematics systems that measured vehicle data, such
`
`as speed, acceleration, time of day, etc.,” and these “systems commonly
`
`included in-vehicle data monitoring devices that would monitor the data,
`
`store it, and/or transmit it to a remote location outside of the vehicle.”
`
`Ex. 1014 ¶ 20. As noted in the ’970 patent, vehicle tracking systems—those
`
`that used communication links with satellite navigation systems for
`
`providing information describing a vehicle’s location based upon navigation
`
`signals—were also well known in the art. Ex. 1001, 3:28-32. The ’970
`
`patent further provides that it was known in the art to detect and record
`
`seatbelt usage to assist in determination of the vehicle insurance costs.
`
`Ex. 1001, 2:66-3:2 (citing U.S. Patent No. 4,667,336, Abs. (“a system for
`
`18
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`Case CBM2012-00004
`Patent 6,064,970
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`detecting and recording each time a seat belt is used [and depending] on the
`
`level of seat belt usage the driver earns discounts on car insurance
`
`premiums.”)). Therefore, one with ordinary skill in the art would have
`
`possessed the knowledge of determining insurance premiums using
`
`monitored vehicle data.
`
`In determining the knowledge level of one with ordinary skill in the
`
`art, we note that various factors may be considered, including “type of
`
`problems encountered in the art; prior art solutions to those problems;
`
`rapidity with which innovations are made; sophistication of the technology;
`
`and educational level of active workers in the field.” In re GPAC, Inc., 57
`
`F.3d 1573, 1579 (Fed. Cir. 1995) (citing Custom Accessories, Inc. v. Jeffrey-
`
`Allan Indus., Inc., 807 F.2d 955, 962 (Fed. Cir. 1986)). We also recognize
`
`that the knowledge of one with ordinary skill in the art would have included
`
`the basic principles, standards, and practices of insurance premium
`
`determination—e.g., Risk Classification Statement of Principles of the
`
`American Academy of Actuaries (Ex. 2012), Actuarial Standard of Practice
`
`No. 12, Concerning Risk Classification, issued by the Actuarial Standards
`
`Board (Ex. 2020), Interpretative Opinion 3: Professional Communications
`
`of Actuaries and Interpretative Opinion 4: Actuarial Principles and Practices
`
`(Ex. 1023). Ex. 2011 ¶ 16; Ex. 2020 ¶ 5.
`
`C. Principles of Law
`
`A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
`
`differences between the claimed subject matter and the prior art are such that
`
`19
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`Case CBM2012-00004
`Patent 6,064,970
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`the subject matter, as a whole, would have been obvious at the time the
`
`invention was made to a person having ordinary skill in the art to which said
`
`subject matter pertains. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406
`
`(2007). The question of obviousness is resolved on the basis of underlying
`
`factual determinations including: (1) the scope and content of the prior art;
`
`(2) any differences between the claimed subject matter and the prior art;
`
`(3) the level of skill in the art; and (4) where in evidence, so-called
`
`secondary considerations. Graham v. John Deere Co., 383 U.S. 1, 17-18
`
`(1966).
`
`We analyze the instituted grounds of unpatentability in accordance
`
`with the above-stated principles. We also recognize that prior art references
`
`must be “considered together with the knowledge of one of ordinary skill in
`
`the pertinent art.” Paulsen, 30 F.3d at 1480. Moreover, “it is proper to take
`
`into account not only specific teachings of the reference but also the
`
`inferences which one skilled in the art would reasonably be expected to draw
`
`therefrom.” In re Preda, 401 F.2d 825, 826 (CCPA 1968). That is because
`
`an obviousness analysis “need not seek out precise teachings directed to the
`
`specific subject matter of the challenged claim, for a court can take account
`
`of the inferences and creative steps that a person of ordinary skill in the art
`
`would employ.” KSR, 550 U.S. at 418; see also Translogic, 504 F.3d at
`
`1259.
`
`
`
`20
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`Case CBM2012-00004
`Patent 6,064,970
`
`D. Claims 4, 5, 16, and 17
`
`Liberty asserts that claims 4, 5, 16, and 17 are unpatentable under
`
`35 U.S.C. § 103(a) over the combination of Bouchard, Pettersen, and Florida
`
`Guide. Pet. 31-33, 41-50, 71-72. In support of that asserted ground of
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`unpatentability, Liberty provides explanations as to how each claim
`
`limitation is met by the combination of the cited prior art references (Pet. 41-
`
`50, 71-72) and rationales for combining the references (Pet. 31-33). Liberty
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`also submits declarations of Ms. Mary L. O’Neil (Ex. 1011) and
`
`Mr. Andrews (Ex. 1014) to support its positions.
`
`Upon review of Liberty’s petition and supporting evidence, as well as
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`Progressive’s response and supporting evidence, we determine that Liberty
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`has demonstrated, by a preponderance of the evidence, that claims 4, 5, 16,
`
`and 17 are unpatentable over the combination of Bouchard, Pettersen, and
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`Florida Guide.
`
`1. Florida Guide
`
`The Florida Guide is an automobile
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