initial operator profile and whether Kosaka discloses determining a base cost of vehicle
`
`insurance. For the obviousness rejections, the discussion focused on whether the proposed
`
`combination of Bouchard, Kosaka, and Black Magic discloses an output data value used to
`
`compute an insurance rating for the vehicle for the data collection period and whether the
`
`combination discloses a process of generating a database.
`
`The EMB “Usage-based Insurance” document attached to the Interview Summary mailed
`
`by the Patent Office on April 1, 2011 was also discussed. That discussion focused on the
`
`background of the technology and Pro gressive’s leadership position in the field of usage-based
`
`insurance.
`
`This paper is submitted with the response to the Office Action mailed March 07, 2011. A
`
`copy of this submission is being served on the Third Party Requester pursuant to 37 C.F.R. §
`
`l.550(f) as indicated on the attached certificate of service. It is believed that no fee is due for
`
`this submission. However, the Director is authorized to debit our Deposit Account 23-125,
`
`Request 12741-32 for any fee required.
`
`In summary, the assignee respectfully submits that the present claims are allowable. If
`
`for any reason the Examiner feels that a discussion would be helpful to advance these
`
`reexamination proceedings, it is respectfully requested that the Examiner contact the undersigned
`
`attorney directly at (312)-321-4786.
`
`BRINKS HOFER GILSON & LIONE
`312-321-4200
`
`Respectfully submitted,
`
`/James A. Collins/
`James A. Collins
`
`Registration No. 43,557
`Attorney for Patentee
`
`Reexamination Control No. 90/011,252
`U.S. Patent 6,064,970
`
`Atty. Dkt. No. 12741-32
`Page 2 of 2
`
`Page 000642
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`

`
`Attachment 1
`
`Page 000643
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`

`
`EX PARTE REEXAM
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`CENTRAL REEXAMINATION UNIT
`
`Ex parte Reexamination U.S. Patent 6,064,970
`
`Robert J. McMillan, et al.
`
`Confirmation No. 4116
`
`Control No. 90/011,252
`
`Examiner: Karin M. Reichle
`
`Filing Date: August 17, 1998
`
`Group Art Unit: 3992
`
`For: MoToR VEHICLE MONITORING SYSTEM FOR
`DETERMINING A CosT OF INSURANCE
`
`2
`
`Attorney Docket No. 12741-32
`
`DECLARATION OF BETH VECCHIOLI
`
`1, Beth Vecchioli, hereby declare:
`
`Qualifications
`
`1.
`
`I received a B.S., with honors, in Business Administration, with a major in Finance,
`
`from the University of Florida.
`
`2.
`
`3.
`
`I have worked in various capacities in the insurance industry for more than 18 years.
`
`From 1993 to 1996, I was employed as a Financial Administrator for the Bureau of
`
`Self-Insurance of the Department of Insurance in the State of Florida.
`
`In that role,
`
`I was
`
`involved with the regulation of workers compensation self—insurance trust
`
`funds and
`
`individually self-insured employers. My duties included the review and audit of various
`
`actuarial and financial reports relating to self—insureds’ loss experience, as well as experience
`
`rating and statistical reports and the actuarial classes identified therein.
`
`In this position,
`
`I
`
`Page 000644
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`

`
`became accustomed to the terminology relating to the development and determination of
`
`insurance rates and ratings.
`
`4.
`
`From 1996 to 1999, I worked as a Financial Administrator for the Bureau of Property &
`
`Casualty Insurer Solvency of the Department of Insurance in the State of Florida. In that position,
`
`I managed the regulation of all property and casualty insurers, including automobile insurers,
`
`licensed in the State of Florida. My responsibilities included the review and audit of insurers’
`
`solvency. As part of the review and audit process,
`
`I evaluated individual insurer’s rating
`
`structures and their impact on the insurer’s solvency.
`
`I was also responsible for the licensing of
`
`new property and casualty insurers in the State of Florida, which process included the review of
`
`those insurers’ business plans, as well as the rates and products they intended to offer.
`
`In this
`
`position, I became knowledgeable of the terminology used in the field of automobile insurance,
`
`including the terminology relating to automobile insurance rates and rating plans.
`
`5.
`
`Thereafter, from 2000-2001, I held the position of Bureau Chief for the Bureau of
`
`Property & Casualty Forms and Rates of the Department of Insurance in the State of Florida. As
`
`Bureau Chief, I was responsible for managing and approving rate filings for property and
`
`casualty insurers in the State of Florida, including automobile insurers. That process involved
`
`actuarial review of rate filings and rating manuals to confirm compliance with statutory
`
`requirements, including the evaluation of rate adequacy, excessiveness, and non-discriminatory
`
`application. Those rate filings comprised various aspects of an insurer’s rating programs, such
`
`as, for example, particular base rates charged to individual
`
`insureds, actuarial classes of
`
`insureds, profiling of insureds, and surcharges or discounts offered by the insurer. As Bureau
`
`Chief, I was also responsible for managing and approving policy forms and endorsements. That
`
`Page 000645
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`

`
`process included the review of insurance contracts to confirm compliance with statutorily
`
`mandated provisions and requirements.
`
`6.
`
`From 2001-2003, I held the position of Deputy Director for the Office of Insurance
`
`Regulation in the State of Florida. As Deputy Director, I managed the regulation of the solvency
`
`and licensing of property and casualty insurers, life and health insurers, and specialty insurers
`
`licensed in the State of Florida.
`
`In this position, my responsibilities focused on the regulation of
`
`financially troubled insurers. That process included the audit and review of insurers’ operations
`
`and their rate adequacy, including a number of Florida-based automobile insurers.
`
`7.
`
`Currently, I am a Senior Government Consultant with the Carlton Fields law firm.
`
`I
`
`am not an attorney. However, I am a member of the firm’s Insurance Practice Group and the
`
`Government Law and Consulting Practice Group, specializing in insurance regulatory and
`
`financial services matters. As a Senior Government Consultant, I advise clients regarding
`
`insurance products, plans, and offerings.
`
`I also review, evaluate, and assist
`
`insurers in
`
`developing rate filings, including specific base rates, rating manuals, underwriting guidelines,
`
`classifications, discounts and surcharges, and other
`
`rating factors. Furthermore,
`
`I assist
`
`automobile insurance companies with the submission and approval of rate filings and insurance
`
`contracts in the States of Florida, Georgia, and South Carolina. Neither I nor the Carlton Fields
`
`law firm has worked in this capacity for the Progressive Group of Insurance Companies.
`
`Scope of Engagement
`
`8.
`
`I have been retained by Progressive Casualty Insurance Company to provide
`
`background on the insurance industry and the field of risk assessment.
`
`1 am being compensated
`
`at my normal hourly rate. My compensation does not depend on the outcome of this
`
`reexamination proceeding.
`
`Page 000646
`
`

`
`9.
`
`I have been asked to provide my opinion on the interpretation of various limitations
`
`recited in the claims of the ’970 patent, including: (a) “operator profile,” as used in claim 4; (b)
`
`“insured profile,” as used in claim 5; (c) “base cost of vehicle insurance,” as used in claim 5; (d)
`
`“insurance rating,” as used in claim 6 and pending claim 70; and (e) “insurance actuarial class,”
`
`as used in pending claims 41, 44-50, and 71-73. For select limitations, I have also been asked to
`
`provide an opinion on whether certain disclosures in the prior art references relied upon by the
`
`Examiner teach or necessarily include the limitation.
`
`10.
`
`I have read U.S. Patent No. 6,064,970 (the ’970 patent), the Office Action dated
`
`March 7, 2011 issued by the United States Patent and Trademark Office in the subject
`
`reexamination proceeding, U.S. Patent 5,465,079 (the ’079 patent), Japanese Unexamined Patent
`
`Application Publication H4-182868 (“Kosaka”), and An Interest
`
`in Black Magic — Motor
`
`Technology published on January 1, 1994 in Insurance Age magazine (“Black Magic”).
`
`1 also
`
`have read portions of the file histories of U.S. Patent No. 6,064,970, Appl. No. 09/135,034 and
`
`U.S. Patent No. 5,797,134, Appl. No. 08/592,958.
`
`Claim 4: “operator profile”
`
`11.
`
`I am familiar with the concepts of usage based insurance and the development of an
`
`“operator profile.” I understand an operator profile includes actual driving data associated with a
`
`driver that distinguishes that driver from other drivers.
`
`12.
`
`In reading the ’970 patent, I believe its use of the term “operator profile” is consistent
`
`with my understanding of how that term is used in the context of usage based insurance. More
`
`specifically, claim 4 is directed to “[a] method of insuring a vehicle operator for a selected period
`
`based upon operator driving characteristics during the period.” Col. 11:65-67. The method of
`
`claim 4 includes “generating an initial operator profile.” Col. 12:1. The ’970 patent states that
`
`4
`
`Page 000647
`
`

`
`“actuarial classes and operator profiles relative thereto [are] 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.” Col. 5:29-
`
`33.
`
`Furthermore,
`
`the term “class” is defined as a “group of insureds with the same
`
`characteristics, established for rate-making purposes.” Dictionary of Insurance Terms, p. 82,
`
`Third Ed. 1995. Additionally, “characteristic” is ordinarily defined as “a feature that helps to
`
`identify, tell apart, or describe recognizably; a distinguishing mark or trait.” See The American
`
`Heritage Dictionary ofthe English Language, Third Ed., 1992.
`
`13.
`
`Thus, as used in the context of the ’97O patent, and particularly in view of the points
`
`above, it is my opinion that “operator profile” would be understood to include a collection of
`
`actual driving data associated with a driver that distinguishes that driver from other drivers, and
`
`is related to insurance.
`
`14.
`
`I have read the Examiner’s rejection of this claim and believe the Examiner’s
`
`construction of the term “operator profile” to be inconsistent with its use in the ’970 patent and
`
`the insurance industry. It is my understanding that the Examiner rejected claim 4 in view of
`
`Kosaka, based on Kosaka’s disclosure of, amongst other things, a monetary amount file, a
`
`prepayment amount, a special contract for insurance, and/or a traditional paper-based insurance
`
`agreement. Office Action, page 7. Based on that disclosure, the Examiner concluded that Kosaka
`
`“provides for generating initial files/inforrnation with respect to the operator/the insuring thereof,
`
`e.g., [Kosaka] teaches a monetary amount file/stored initially payed insurance premium and/or
`
`‘the insurance agreement’ (emphasis added), similar to that described by the ’970 patent.” Id
`
`(emphasis in original).
`
`Page 000648
`
`

`
`15.
`
`I respectfully disagree with the Examiner.
`
`It is my opinion that someone in the
`
`insurance industry would not view Kosaka as discussing an “operator profile,” as that phrase is
`
`used in the ’970 patent. Both the monetary amount file and the prepayment amount described in
`
`Kosaka fail
`
`to suggest that either is based on distinctive driving data or that either is a
`
`predetermined amount. Similarly,
`
`the mere recitation in Kosaka of a special contract for
`
`insurance or a traditional paper—based insurance agreement fails to suggest that either is based on
`
`distinctive driving data, since the terms of the agreement, the parties to the agreement and the
`
`subject matter of the agreement simply are not disclosed. Furthermore, in the insurance industry,
`
`distinctive driving data is not a necessary element of a vehicle insurance agreement.
`
`Claim 5: “insured profile”
`
`16.
`
`I am also familiar with the term “insured profile” through my work in the insurance
`
`industry. In the context of the insurance industry, insured profile is used to describe specific data
`
`about an insured.
`
`For example, an insured profile may comprise information about an
`
`individual’s age,
`
`sex, geographic location, and with respect
`
`to automobile insurance, an
`
`individual’s driving record, make and model of car, and requested coverages.
`
`17.
`
`Based on my review of the ’970 patent, as well as the file history for U.S. Patent No.
`
`5,797,134, Appl. No. 08/592,958, I believe the use of the term “insured profile” therein to be
`
`consistent with the way that term is used in the insurance industry. More specifically, Claim 5 is
`
`directed to “[a] method of determining a cost of vehicle insurance for a selected period based
`
`upon monitoring, recording, and communicating data representative of operator and vehicle
`
`driving characteristics during said period.” Col. 12:7-10. The method of claim 5 includes
`
`“determining an initial insured profile.” Col. 12:13. The ’97O patent states that “[t]he recorded
`
`data elements are consolidated for processing against an insured profile and for identifying, a
`
`6
`
`Page 000649
`
`

`
`surcharge or discount to be applied to a base cost of automobile insurance.” Col. 4:5-8. “This
`
`insured profile includes the information about coverages including limits and deductibles, which
`
`are necessary for establishing the appropriate cost of insurance for the subject insured.” Col.
`
`10:36-39.
`
`18.
`
`The file history for U.S. Patent No. 5,797,134, Appl. No. 08/592,958, states that:
`
`in the specification the insured profile includes the information about coverages
`including limits and deductibles, which are necessary for establishing the
`appropriate cost of insurance for the subject insured. This profile is processed
`against a surcharge or discount algorithm file, which include specific factors of
`the various usage patterns and trigger events (page 19, lines 3-9). This insured
`profile is interpreted as an insurance package with some standard or basic cost,
`and from that basic cost other
`information pertaining to the individual,
`surcharges or discounts are applied, e. g. insurance premiums are increased if the
`number of accidents are frequent.
`
`Office Action, page 6, dated November 11, 1997, Appl. No. 08/592,958 (emphasis added).
`
`19.
`
`It is my opinion that “an initial insured profile,” as used in the context of the ’970
`
`patent and the file history of U.S. Patent No. 5,797,134, would be interpreted in the insurance
`
`industry to include information pertaining to an individual and some standard or basic cost to
`
`which surcharges or discounts are applied.
`
`Claim 5: “base cost of vehicle insurance”
`
`20.
`
`Through my experience in the insurance industry, I am also accustomed to the term
`
`“base cost of vehicle insurance.” In that context, the term is generally used to refer to a base cost
`
`associated with an insured’s demographics and selected coverages, as contained in his or her
`
`insured profile. The base cost is used to ultimately calculate a premium for an insured based on
`
`appropriate surcharges or discounts.
`
`21.
`
`After reading the ’970 patent, I believe the use of the term “base cost of vehicle
`
`insurance” in the patent to be consistent with the way that term is used in the insurance industry.
`
`7
`
`Page 000650
`
`

`
`More specifically, as previously mentioned, Claim 5 is directed to “[a] method of determining a
`
`cost of vehicle insurance for a selected period based upon monitoring,
`
`recording, and
`
`communicating data representative of operator and vehicle driving characteristics during said
`
`period.” Col. 12:7-10. The method of claim 5 includes “determining...a base cost of vehicle
`
`based on [the] initial insured profile,” and “producing a final cost of vehicle insurance for the
`
`selected period from the base cost and [a] surcharge or discount.” Col. 12:13-25. The Brief
`
`Summary of the Invention states that “[t]he total cost of insurance obtained from combining the
`
`base cost and surcharges or discounts is produced as a final cost to the operator.” Col. 4:8—10.
`
`Elsewhere,
`
`the ’970 patent explains that “[t]he recorded data elements are consolidated for
`
`processing against an insured profile and for identifying, a surcharge or discount to be applied to
`
`a base cost of automobile insurance.” Col. 4:5—8.
`
`22.
`
`In view of these references, it is my opinion that a “base cost of vehicle insurance,” as
`
`that term is used in the ’970 patent, would be interpreted in the insurance industry as an initial
`
`cost of insurance, based on the insured profile, to which surcharges or discounts are applied.
`
`23.
`
`I have read the Examiner’s rejection of this claim and believe the Exarniner’s
`
`construction of the term “base cost of vehicle insurance” to be inconsistent with its use in the
`
`’97O patent and the insurance industry. It is my understanding that the Examiner rejected claim 4
`
`in view of Kosaka based on Kosaka’s disclosure of, amongst other things, a prepaid balance, a
`
`special contract for insurance, and/or a traditional paper-based insurance agreement. Office
`
`Action, page 16. Based on those disclosures, the Examiner contends that “[Kosaka] also teaches,
`
`‘a base cost’, e. g. the initial/prepaid balance, based on such ‘initial insured profile’, e.g. the terms
`
`of the insurance agreement.” Id.
`
`Page 000651
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`

`
`24.
`
`I respectfully disagree with the Examiner.
`
`It is my opinion that someone in the
`
`insurance industry would not view Kosaka as suggesting a “base cost of insurance” that is
`
`derived from an insured profile and is subject to surcharges or discounts. First, a payment—like
`
`that disclosed in Kosaka—is not equivalent to a cost. Second, the prepaid balance disclosed in
`
`Kosaka cannot be a cost of insurance because it is not limited; the amount of the prepaid balance
`
`appears to be arbitrary. Similarly, the prepaid balance is not a base cost of vehicle insurance
`
`because it is not tied to a previously assessed risk. Furthermore, the mere recitation of an
`
`insurance agreement fails to suggest a methodology for determining a base cost of insurance to
`
`which surcharges or discounts are applied.
`
`Claims 6 and 70: “insurance rating”
`
`25.
`
`I am familiar with the term “insurance rating” through my work in the insurance
`
`industry.
`
`In the context of the insurance industry, the term insurance rating generally refers to a
`
`variable used in the process of determining a rate for a particular insured. By way of example, an
`
`automobile safety rating may be used as one variable to compute an individual’s insurance rate.
`
`26.
`
`I have read the ’970 patent and pending claim 70 and believe the use of the term
`
`“insurance rating” to be consistent with that of the insurance industry. Specifically, claims 6 and
`
`70 are directed to “[a] method of monitoring a human controlled power source driven vehicle.”
`
`Col. 12:26-27. The methods of claims 6 and 70 include the computation of “an insurance rating
`
`for the vehicle for the data collection period.” Col. 12:37-38; see also pending claim 70. The
`
`’970 patent states that this “invention comprises an integrated system to extract via multiple
`
`sensors, screen, aggregated and apply for insurance rating purposes, data generated by the actual
`
`operation of the specific vehicle and the insured user/driver.” Col. 5:39-42. See also Col. 3:45-
`
`50; C01. 5:18-20.
`
`Page 000652
`
`

`
`27.
`
`Notably, as points of distinction, claim 1 recites “a cost of insurance,” claim 2 recites
`
`“an insurance charge,” claim 4 recites “a cost of vehicle insurance,” claims 5 recites both “a cost
`
`of vehicle insurance” and “a base cost of vehicle insurance,” claims 10-12 recite “an adjusted
`
`insurance cost,” and claims 13-15 recite “an adjusted underwriting cost.” Col. 11:42-Col. 14:11.
`
`Claim 6, on the other hand, specifically refers to an “insurance rating.” Col. 12:38.
`
`28.
`
`As used in the insurance industry, the term “rating” is defined as “the process of
`
`assessing the risk involved in any given insurance situation,
`
`for purposes of setting the
`
`premium.” 1 Couch on Insurance § 1:3 (3d ed. 1995; rev. 2010). The term “classification rating”
`
`is defined in the insurance industry as “a system that places similar insureds into classes, with all
`
`members of each class charged the same premium.” Id. Ordinarily, the term “rating” is defined
`
`as “a position assigned on a scale; a standing.” The American Heritage Dictionary of the English
`
`Language, Third Ed. 1992. These terms should be contrasted with the term “insurance rate,”
`
`which is defined in the insurance industry as the “amount charged to an insured that reflects
`
`expectation of loss for a covered risk.” Dictionary ofInsurance Terms, p. 232 Third Ed. 1995.
`
`29.
`
`Therefore, based on the points discussed above,
`
`it
`
`is my opinion that the term
`
`“insurance rating,” as used in the context of the ’970 patent, and as it would be interpreted in the
`
`insurance industry, identifies an operator’s or vehicle’s position or standing in relation to other
`
`operators or vehicles and which is based, in whole or in part, on insurance data associated with
`
`the actual operation of the vehicle and the actions of the driver. While the recited insurance
`
`rating may be used as one variable in determining a cost of insurance, it is not a necessary result.
`
`For example,
`
`insurance ratings may be sold to other entities, such as automobile insurance
`
`companies, for purposes of developing or refining their own approaches to assessing risk, much
`
`10
`
`Page 000653
`
`

`
`like a credit reporting agency might sell a credit score or rating to an insurance company for
`
`purposes of assessing risk.
`
`30.
`
`I have read the Examiner’s rejection of these claims and believe the Examiner’s
`
`construction of the term “insurance rating” to be inconsistent with its use in the ’970 patent and
`
`the insurance industry. It is my understanding that the Examiner rejected claims 6 and 70 in view
`
`of the ’079 patent, Kosaka, and Black Magic, specifically relying on Kosaka and Black Magic to
`
`argue the disclosure of an insurance rating, Office Action, pages 48-56, or according to the
`
`Examiner, “a/some value/cost used to determine an overall cost associated with insurance of the
`
`vehicle, for the vehicle.” Office Action, page 55.
`
`31.
`
`I respectfully disagree with the Examiner. As a person familiar with the insurance
`
`industry, I interpret Kosaka to disclose an insurance determination system based purely on what
`
`is referred as a “pay-as-you-drive” model. As described in Kosaka, a driver may deposit an
`
`arbitrary prepayment amount, from which deductions are processed based on an assessment
`
`performed while that driver is operating a monitored vehicle. Each individual vehicle or driver
`
`in Kosaka is subject to the same “vague empirical knowledge” used in the risk assessment.
`
`In
`
`other words, Kosaka does not compute or identify a specific driver’s position relative to others
`
`drivers based on insurance data associated with that driver’s actual operation of the vehicle.
`
`Furthermore, the driving characteristics of the driver under evaluation are not stored. Because
`
`the system disclosed in Kosaka does not record the monitored characteristics, it does not permit
`
`the computation of an insurance rating, as that term is used in the context of the ’970 patent, or
`
`as it is understood in the insurance industry.
`
`32.
`
`It is also my interpretation that Black Magic fails to disclose “an insurance rating.”
`
`As previously mentioned, the subject invention utilizes a rating system that, in 1996, involved
`
`11
`
`Page 000654
`
`

`
`the generation of actuarial classes unknown to the insurance industry. See Col. 5:33-42. Black
`
`Magic reinforces this notion, stating that: (1) insurers were only offering upfront discounts for
`
`the installation of a monitor rather
`
`than providing insurance ratings;
`
`(2)
`
`location-based
`
`technology “is far more of an unknown quantity for the world of insurance;” (3) “black box”
`
`technology would be met with resistance from drivers that “might see it as Big Brother, which
`
`could cause employment problems for risk managers;” and, (4) “[m]any insurers regard this
`
`[technology] as science fiction.” Thus, it is my opinion that Black Magic fails to provide for the
`
`generation of “an insurance rating,” as that term is used in the context of the ’970 patent, or as it
`
`is understood in the insurance industry.
`
`Claims 41 44-50 and 71-73: “insurance actuarial class”
`
`33.
`
`Furthermore,
`
`I am familiar with the term “insurance actuarial class” through my
`
`experience in the insurance industry.
`
`In that context,
`
`insurance actuarial class describes a
`
`category used for rating purposes comprised of individuals with similar characteristics and risk
`
`factors. For example, male drivers ages 16-25 may be classified for rating purposes in a category
`
`of high—risk drivers due to an insurer’s expectation of an increased number of traffic violations
`
`and accidents among this group of drivers.
`
`34.
`
`I have read the ’970 patent and pending claims 41, 44-50, and 71-73 and believe the
`
`use of the term “insurance actuarial class” to be consistent with that term’s use in the insurance
`
`industry. Specifically, pending claims 41, 44-50, and 71-73 are directed to “[a] method of
`
`monitoring a human controlled power source driven vehicle.” See pending claims 41, 44-55, and
`
`71-73. The method of claim 41 includes “selecting one or more of the one or more data elements
`
`by [a] processor for use to determine an insurance actuarial class associated with the vehicle;”
`
`claim 44 includes “assigning the vehicle to an insurance actuarial class by a processor based on a
`
`12
`
`Page 000655
`
`

`
`measured total driving time of the vehicle during the data collection period;” claim 45 includes
`
`“assigning the vehicle to an insurance actuarial class by a processor based on a measured driving
`
`time of the vehicle in predetermined high risk locations during the data collection period;” claim
`
`71 includes “generating a plurality of dynamic insurance actuarial classes that change relative to
`
`the data being extracted and stored, where the insurance rating is based on the application of the
`
`dynamic insurance actuarial classes;” claim 72 includes “consolidating [] group data values with
`
`selected actuarial classes indicative of a degree of safety of operation of the vehicle;” and, claim
`
`73 includes “selected insurance actuarial classes [] based in part on actual driving characteristics
`
`of vehicles and human actions that were previously extracted and stored in a plurality of vehicles
`
`from a plurality of in-vehicle sensors.”
`
`35.
`
`The ’970 patent states that “[c]onventional methods for determining costs of motor
`
`vehicle insurance involve gathering relevant historical data from a personal interview with the
`
`applicant for the insurance and by referencing the applicant’s public motor vehicle driving record
`
`that is maintained by a governmental agency, such as a Bureau of Motor Vehicles. Such data
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`results in a classification of the applicant to a broad actuarial class for which insurance rates are
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`assigned based upon the empirical experience of the insurer.” Col. 1:17-25. However, “[t]he
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`subject invention will base insurance charges with regard to current material data representative
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`of actual driving characteristics of the vehicle and driver operation to provide a classification
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`rating of the operator and the vehicle in an actuarial class which has a vastly reduced rating error
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`over conventional insurance cost systems.” Col. 3:45-50. The ’970 patent also explains that
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`“[s]ince the type of operating information acquired and recorded in prior art systems was
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`generally never intended to be used for determining a cost of vehicle insurance, the data elements
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`that were monitored and recorded therein were not directly related to predetermined safety
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`standards or the determining of an actuarial class for the vehicle operator. Col. 3:12-21. The
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`patent goes on to provide exemplary actuarial classes, Col. 4:30-51, and explains that “[t]hese
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`new and more precise actuarial classes are considered to be better predictors of loss because they
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`are based on actual use of the vehicle and the behaviors demonstrated by the driver.” Col. 4:52-
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`55.
`
`36.
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`The term “actuarial,” as it is used in the insurance industry, is defined as “[h]aving to
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`do with insurance mathematics.” Glossary of Insurance Terms, p. 6, 5th Ed. 1994. The term
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`“class,” as it is used in the insurance industry, is defined as a “group of insureds with the same
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`characteristics, established for rate-making purposes.” Dictionary of Insurance Terms, p. 82,
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`Third Ed. 1995.
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`37.
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`Based on the points referenced above,
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`it is my opinion that the term “insurance
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`actuarial class,” as used in the context of the ’97O patent, would be interpreted by an individual
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`in the insurance industry as a grouping of individuals or vehicles having similar
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`risk
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`characteristics based on, in whole or in part, the actual monitored characteristics of the vehicle or
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`driver.
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`38.
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`I have read the Examiner’s rejection of these claims and believe the Examiner’s
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`construction of the term “insurance actuarial class” to be inconsistent with its use in the ’970
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`patent and the insurance industry. It is my understanding that the Examiner rejected claims 41,
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`44-50, and 71-73 in view of the ’O79 patent, Kosaka, and Black Magic, Office Action, page 164,
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`specifically relying on the ’O79 patent to argue the disclosure of “an insurance actuarial class,” or
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`in the opinion of the Examiner, “a combination/group/grouping related to loss/risk/safety which
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`are determined from classification/characteristics representative of motor vehicle operational
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`characteristics and driver behavior for which data is gathered.” Office Action, page 188-189.
`
`14
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`39.
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`I respectfully disagree with the Examiner.
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`It is my opinion that someone in the
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`insurance industry would not view the ’079 patent as suggesting a grouping of individuals or
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`vehicles having similar characteristics based on the actual monitored characteristics of the
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`vehicle or driver. Bouchard fails to suggest an insurance actuarial class because the disclosed
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`determination of a given driver’s fitness is based on and limited to only the characteristics of that
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`driver. Kosaka and Black Magic, on the other hand, fail to suggest an insurance actuarial class
`
`for the same reasons they fail to disclose an insurance rating, as explained above.
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`15
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`I further declare that all statements made herein of my own knowledge are true and all
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`statements made on information and belief are believed to be true; and further that
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`these
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`statements are made with the knowledge that willful false statements and the like so made are
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`punishable by fine or imprisonment, or both, under Section 1001 of Title 18 of the United States
`
`Code and that such willful false statements may jeopardize the validity of the subject patent and
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`any claims issuing from this reexamination proceeding.
`
`DATED: April 6, 2011
`
`
`
`Beth Vecchioli
`
`16
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`Page 000659
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`Attachment 2
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`Page 000660
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`EX PAR TE REEXAM
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`CENTRAL REEXAMINATION UNIT
`
`Ex parte Reexamination U.S. Patent 6,064,970
`
`Robert J. McMillan, et al.
`
`Confirmation No. 4116
`
`Control No. 90/011,252
`
`Examiner: Karin M. Reichle
`
`Filing Date: August 17, 1998
`
`Group Art Unit: 3992
`
`For: MOTOR VEHICLE MONITORING SYSTEM FOR
`DETERMINING A COST OF INSURANCE
`
`Attorney Docket No. 12741-32
`
`DECLARATION OF ROBERT J. MCMILLAN
`
`1, Robert J. McMillan, hereby declare:
`
`Qualifications
`
`1.
`
`I am the first named inventor on U.S. Patent 6,064,970 (“the ’970 patent”), which is
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`the subject of the current reexamination proceeding.
`
`1 am also a named inventor on U.S. Patent
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`5,797,134, directed to a Motor Vehicle Monitoring System for Determining a Cost of Insurance,
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`and U.S. Patent 6,868,386, directed to a Monitoring System for Determining and
`
`Communicating a Cost of Insurance. Each of these patents is directed to one or more aspects of
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`usage based insurance.
`
`2.
`
`I have worked in the property and casualty insurance industry for over 25 years,
`
`including various positions at Progressive Casualty Insurance Company and its affiliates
`
`(collectively “Progressive”) as National Director of Claims, National Director of Product
`
`Development, National Director of Marketing, and General Manager and President of several
`1
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`Page 000661
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`Progressive affiliates. In those positions, I have been exposed to and involved with all aspects of
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`property and casualty insurance, including the development of insurance products, plans, ratings,
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`and coverages.
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`I also managed the administration of such plans, ratings, and coverages, and
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`participated in the resolution of insurance claims.
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`I have not worked for the Progressi