Progressive’s Oral Argument
`
`CBM2012-00002
`CBM2012-00004
`
`U.S. Patent No. 6,064,970
`MOTOR VEHICLE MONITORING SYSTEM
`FOR DETERMINING A COST OF INSURANCE
`
`Oral Hearing October 21 2013 1 00 p mOral Hearing: October 21, 2013, 1:00 p.m.
`
`PROGRESSIVE EXHIBIT
`2012-00002: 2025;
`2012-00004: 2024
`
`PrDX-1
`
`
`
`CBM2012-00002
`CBM2012-00004
`
`U.S. Patent No. 6,064,970
`MOTOR VEHICLE MONITORING SYSTEM
`FOR DETERMINING A COST OF INSURANCE
`
`Oral Hearing October 21 2013 1 00 p mOral Hearing: October 21, 2013, 1:00 p.m.
`
`PROGRESSIVE EXHIBIT
`2012-00002: 2025;
`2012-00004: 2024
`
`PrDX-1
`
`
`
`Claim 1 – Actuarial Class
`
`Claim 1:
`1. A method of generating a database comprising data elements representative of
`operator or vehicle driving characteristics, the method comprising:
`generating actuarial classes of insurance, which group operators or vehicles having
`a similar risk characteristic, from actual monitored driving characteristics during a
`selected time period as represented by recorded data elements representative of
`
`an operating state of the vehicles or an action of the operators; and p g p ;
`
`
`
`monitoring a plurality of the data elements representative of an operating state of a
`vehicle or an action of an operator during a latter selected time period; and,
`recording selected ones of the plurality of data elements into the database when
`
`idsaid ones are determined to be appropriate for recording relative to determining a d t i d t b i t f di l ti t d t i i
`
`
`
`
`
`
`
`
`
`cost of insurance for the vehicle during the latter selected time period, said ones
`including, a time and location of vehicle operation and a corresponding log of
`vehicle speed for the time and location.
`
`PrDX-2
`
`
`
`Claim 4
`
`4. A method of insuring a vehicle operator for a selected period based
`upon operator driving characteristics during the period, comprising,
`
`steps of: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 o o g o a y o e e c e ope a o s d g c a ac e s cs
`
`
`
`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 insurancemonitored in that selected period and the base cost of insurance.
`
`PrDX-3
`
`
`
`Claim 5
`
`5. 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, whereby the cost is
`
`adjustable by relating the driving characteristics to predetermined safetyadjustable by relating the driving characteristics to predetermined safety
`standards that are related to a safe operation of a vehicle, the method comprising:
`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 and determining a base cost ofvehicle or an action of the operator of the vehicle and determining a base cost of
`the vehicle insurance based on said initial insured profile wherein the initial
`insured profile comprises coverage information, including limits and deductibles;
`monitoring a plurality of the data elements representative of the operating state of
`the vehicle or the action of the operator of the vehicle during the selected period;
`recording selected ones of the plurality of data elements when said ones are
`determined to have a preselected relationship to the safety standards;
`
`consolidating said selected ones for identifying a surcharge or discount to be appliedconsolidating said selected ones for identifying a surcharge or discount to be applied
`to the base cost; and,
`producing a final cost of vehicle insurance for the selected period from the base cost
`and the surcharge or discount.
`
`PrDX-4
`
`
`
`Claim 6
`
`6. A method of monitoring a human operator controlled power source driven vehicle,
`the method comprising:
`extracting one or more data elements by a computer programmed to monitor sensor
`
`data from at least one sensor wherein the one or more elements are actualdata from at least one sensor wherein the one or more elements are actual
`driving characteristics of at least one operating state of the [vehicle] and at least
`one human operator's actions during a data collection period;
`analyzing, grouping, and storing the one or more data elements as group data
`values in a first memory related to a predetermined group of elements; and,
`correlating the group data values to preset values in a second memory and
`generating an output data value based on the correlation wherein the output data
`
`value is used to compute an insurance rating for the vehicle for the data p g
`
`collection period that is based on an actuarial class of insurance which groups
`other human operator controlled power source driven vehicles having a similar
`operator or vehicle risk characteristic and which also represents the actual
`
`driving characteristics of the vehicle monitored and recorded from the at least g
`one sensor.
`
`PrDX-5
`
`
`
`Claim 18
`
`18. A method of monitoring a human operator controlled power source driven
`vehicle, the method comprising:
`extracting one or more data elements by an on-board computer from at least one
`
`sensor wherein the one or more elements are actual driving characteristics of atsensor wherein the one or more elements are actual driving characteristics of at
`least one operating state of the vehicle and at least one human operator's
`actions during a data collection period;
`analyzing, grouping, and storing the one or more data elements as group data
`values in a first memory related to a predetermined group of elements;
`correlating the group data values to preset values related to safety standards in a
`second memory and generating an output data value based on the correlation;
`and
`computing an insurance rating based upon the output data value for the vehicle for
`the data collection period, in which the insurance rating is also based on an
`actuarial class of insurance wherein said actuarial class of insurance groups
`
`other human operator controlled power source driven vehicles having a similarother human operator controlled power source driven vehicles having a similar
`operator or vehicle risk characteristic as well as represents the actual driving
`characteristics of the vehicle monitored and recorded from the at least one
`sensor, and setting prospective insurance premiums based on the actuarial class
`
`of insuranceof insurance.
`
`PrDX-6
`
`
`
`
`
`‘970 – Figure 1
`
`‘970 — Figure 1
`
`I00
`
`fiEHICLE
`OPERATING
`?
`
`YES
`
`IOE
`
`[04
`
`
`
`REVERIF‘I'
`1“ TWO
`MINUTEs
`
`
`RECORD 5E NSOR
`
`IN FORM ATI 0H
`
`
`
`
`REC-0RD TRIGGER
`f’IIMMEDIATE
`UPL 0A0
`INFORMATION
`?
`
`
`
`
`YES
`
`JIE
`
`NOTIFY
`I3 ENTRA L CGNTRD L
`
`IE4
`
`"3
`
`IN FOR NATION
`
`CENTRAL {IONTFIDL
`TMKE APPRUPRI AT E
`ACT | O N
`
`RECORD TRIGGER
`EVEN T RESPDN BE
`
`
`
`PrDX-7
`
`
`
`
`
`‘970 – Figure 2
`
`‘970 — Figure 2
`
`FIG.2 m
`
`204
`
`206
`
`
`VEHICLE SENSOR
`
`
`RECGRD FILE
`
`
`
` TRIGGER EVENT
`
`
`RESPONSE FILE
`
`
`REQUIRE
`VEHICLE
`RECORD FILE
`
`202
`
`2:13
`
`ACQUIRE TRIGGER
`
`FILE
`
`EVENT RESPDHSE
`
`EID
`
`CDNEDLIDATE
`FILES
`AGDU IRED
`
`PROFILE
`
`PROCESS FILE
`AGAINST INSURED
`
`2l2
`
`x214
`
`PRUCEBS FILE
`AGAINST $UHCHARGE
`
`ALGORITHM FILE
`
`ZIE
`
`INSURED
`
`C
`PRODUCE PERIDDI
`BILLS TO BE MAILED TD
`
`flGGOUNT
`ST-N'I'EMEN'TS
`
`
`
`PrDX-8
`
`
`
`
`
`‘970 – Figure 3
`
`‘970 — Figure 3
`
`
`
`
`
`PrDX-9
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`
`
`
`
`‘970 – Figure 4
`
`‘970 — Figure 4
`
`
`OPERATIONS
`
`C'D'NTRDL
`l[:EMTER
`
`
`
`
`4I$
`
`CDHMUHICATIONS LINK
`
`{cg CELLULAR
`
`TELEPHONE!
`
`
`
`no
`
`DRIVER
`
`DN' BOARD
`
`
`
`
`DATA
`INPUT
`SUE-SYSTEM
`
`
`
`CONSOLE
`STORnGE
`
`
`
`DN' BOARD COMPUTER
`
`
`AND REDORDING SYSTEM
`4M-
`
`
`
`
`FIEAL'TIME
`ADDITIONAL
`DPERAT ING
`SENSORS
`
`KERN EL
`
`
`
`
`VEHICLE
`NAVIGATION
`
`
`DATA BUS hND
`SUB SYSTEM
`SENSORS
`
`422
`
` /
`
`PrDX-10
`
`
`
`‘970 – Figure 5
`
`
`
`‘970 — Figure 5
`
`FIG.5
`
`COLLECT
`RAW DATA
`
`ELEMENTS
`
`502
`
`
`GENERATE
`
`
`CALGULJITED
`
`DATA ELEMENTS
`
`
`
`COLLECT
`
`
`DATfiIBASE
`
`INFORMATION
`
`ELEMENTS
`
`GENERATE
`
`
`DERIVED UATH
`ELEMENTS
`
`STORE DATA
`SAMPLE
`
`
`
`
`
`
`
`INCIDENT
`$335533;
`
`
`
`WD'TION
`CONDITION
`
`?
`
`
`
`
`
`
`PrDX-11
`
`
`
`
`
`‘970 – Figure 6
`
`‘970 — Figure 6
`
`INFORMATION DATABASE
`
`INTERFACE
`
`SAMPLE RATE
`
`MAPS
`SPEED LIMITS
`TRAFFIfl 5| 6N5
`HIiZ‘-rHI|'I|'I|!1.‘II CONDITIONS
`IFUTURE TBDI
`
`‘COMFUTER ETDRAGE
`
`- ON DEMAND
`
`ADDITIONAL SYSTEMIISI
`
`VEHICLE SOURCES
`
`INTERFACE
`
`‘ ENGINE DATA
`* BODY DATA
`' ELECTRlCAL DATA
`
`'3AE JISTS CONNECTOR
`
`OTHER SOURCES
`
`INTE RFACE
`
`WHS DATA
`9P5 DATA
`SECURITY SYSTEM
`
`' VARIOUS HO PORTS
`Lag, 35'232 I422. ETCJ
`
`SAMPLE RATE
`
`-VAR1E5
`
`F 1 G 6
`
`MOTOR VEHICLE INSURANCE PROCESS
`VEHICLE DATA ACQUISITION PROCESS FLow
`
`
`
`PrDX-12
`
`
`
`Claim Construction – “Actuarial
`
`Class”Class”
`
`Progressive’s Construction
`
`A grouping of risks (i.e.,
`insureds) with similar risk
`characteristics and expected
`insurance claims loss (or
`
`insurance costs).insurance costs).
`
`Board’s Preliminary
`Construction
`A combination/
`group/groupings related to
`loss/risk/safety which are
`determined from
`
`classifications/characteristicsclassifications/characteristics
`representative of motor
`vehicle operational
`characteristics and driver
`
`fb h ibehavior for which data is hi h d t i
`
`
`
`gathered.
`
`PrDX-13
`
`
`
`Miller Testimony– “Actuarial Class”
`
`(Ex. 2010, Miller Decl. at ¶¶ 16-17.)
`
`PrDX-14
`
`
`
`Liberty’s Expert Testimony –
`
`“Act arial Class”“Actuarial Class”
`
`Well, I’m just trying to determine what – what
`Q.
`
`
`circumstances have to exist for a given group to be deemed g g p
`
`properly an actuarial class?
`MR. MEYERS: Objection, 611-A and 403.
`A.
`Again, in order – we could start with the entire body
`
`
`of insureds divided into two groups sharing similar risk g p g
`
`characteristics. Then we will do an analysis of the expected pure
`premium to determine if there are statistically significant
`differences between the two groups before we would determine
`
`whether or not these are appropriate actuarial classes. Other –pp p
`other considerations would include looking at the risk
`characteristic to determine if it’s appropriate as well.
`Q.
`How do you – what analysis do you do to determine
`
`whether there are statistically significant risk differences?y g
`A.
`As I mentioned earlier, you might do a multi-variate
`regression analysis.
`
`(Ex. 2013, O’Neil depo. at 93:22-94:23.)
`
`PrDX-15
`
`
`
`Liberty’s Expert Testimony – “Actuarial
`
`Class”Class
`
`(Ex. 2022, O’Neil depo. at 7:10-18 and 9:5-14.)
`
`PrDX-16
`
`
`
`Liberty’s Expert Testimony – “Actuarial
`
`ClClass””
`
`
`(Ex. 2022, O’Neil depo. at 30:25 – 31:10.)
`
`PrDX-17
`
`
`
`Claim Construction – Initial Operator
`
`ProfileProfile
`
`Board’s Preliminary
`Construction
`Initial files or information with
`tht trespect to the operator or the t th
`
`
`
`
`insuring thereof.
`
`Progressive’s Construction
`
`An initial collection of actual
`
`d tid idriving data associated with i t d ith
`
`
`
`
`a driver that distinguishes
`that driver from other drivers
`and is related to insurance.
`
`PrDX-18
`
`
`
`
`
`Operator Profile – ‘970 SpecificationOperator Profile 970 Specification
`
` The invention “generate[s] actuarial classes and The invention generate[s] 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 ratingknowledgeable enhanced insurance rating
`precision.”
`
`(Ex. 1001, col. 5:27-32.) ( 00 , co 5 3 )
`
`
`
`
`PrDX-19
`
`
`
`Claim Construction – Initial Insured
`
`ProfileProfile
`
`Progressive’s Construction
`
`Board’s Preliminary
`Construction
`Initial files or information with Basic insurance informationInitial files or information with Basic insurance information
`
`
`respect to the operator or the
`pertaining to the insured from
`insuring thereof.
`which an initial insurance
`cost is determined
`
`PrDX-20
`
`
`
`
`
`Herrod’s Behavioural GroupsHerrod s Behavioural Groups
`
`(Ex. 1007 at 000002.)
`
`PrDX-21
`
`
`
`
`
`Miller Testimony – Actuarial ClassMiller Testimony Actuarial Class
`
`(Ex. 2010, Miller Decl. at ¶ 16.)
`
`PrDX-22
`
`
`
`Miller Testimony – Actuarial Standard of
`
`“Homogeneity”g y
`
`
`(Ex. 2010, Miller Decl. at ¶ 41.)
`
`PrDX-23
`
`
`
`Miller Testimony – Herrod’s “Accident Statistics” Do Not
`
`Form The Basis Of Actuarial ClassesForm The Basis Of Actuarial Classes
`
`(Ex. 2011, Miller Decl. at ¶ 45.)
`
`PrDX-24
`
`
`
`Miller Testimony – Herrod
`
`(Ex. 2010, Miller Decl. at ¶ 48.)
`
`PrDX-25
`
`
`
`
`
`Miller Testimony HerrodMiller Testimony – Herrod
`
`(Ex. 2010, Miller Decl. at ¶ 50.)
`
`PrDX-26
`
`
`
`Liberty’s Expert Testimony – Actuarial
`
`StandardsStandards
`
`(Ex. 2022, O’Neil depo. at 7:10 – 18.)
`
`PrDX-27
`
`
`
`Liberty’s Expert Testimony – Actuarial
`
`StandardsStandards
`
`(Ex. 2022, O’Neil depo. at 9:5-14.)
`
`PrDX-28
`
`
`
`Liberty’s Expert Testimony – Actuarial
`
`StandardsStandards
`
`(Ex. 2022, O’Neil depo. at 20:23 – 21:4.)
`
`PrDX-29
`
`
`
`Liberty’s Expert Testimony – Actuarial
`
`StandardsStandards
`
`(Ex. 2022, O’Neil depo. at 44:4-20.)
`
`PrDX-30
`
`
`
`Liberty’s Expert Testimony – Actuarial
`
`ClassesClasses
`
`What I – I guess, what I’m just trying as a matter of
`Q.
`
`
`
`
`itterminology in understanding your declaration, can you have l i d t di d l ti h
`
`
`
`
`
`actuarial classes that are unfairly discriminatory and actuarial
`classes that are fair and equitable?
`
`MR. MEYERS: Objection.j
`Q.
`I’m not asking whether the former would be legal,
`just whether – whether they would have that?
`MR. MEYERS: Objection, 611-A and 403.
`
`AA.
`
`I don’t believe an insurance department wouldI don t believe an insurance department would
`approve such an arrangement.
`Q.
`Understood. But would it be an actuarial class?
`MR. MEYERS: Objection, 611-A and 403.
`A.
`An actuarial class, as I mentioned it here, is
`grouping – sharing similar risk characteristics and
`presumably with differentiated expected loss costs.
`
`(Ex. 2013, O’Neil depo. at 90:12 – 91:11.)
`
`PrDX-31
`
`
`
`Liberty’s Expert Testimony – Survey Data
`Q.
`To – in analyzing – in doing an analysis to determine whether a
`given group out of a set of groups shares similar risk characteristics, do you
`ever do – in your experience have you ever done surveys of – of the people in
`
`h diffthe different groups to gather the information?h h i f i ?
`
`
`
`
`MR. MEYERS: Objection, 402, 611-B.
`A.
`I’m not sure what you mean by “surveys” in this instance.
`
`Q.Q
`
`
`Like calling people up and asking them – you know, interviewing g p p p g y , g
`
`
`
`them to gather your data.
`MR. MEYERS: Objection, 402, 611-B, 403.
`A.
`There would be a number of problems with gathering the data in
`
`th tthat manner.
`Q.
`Like what?
`MR. MEYERS: Objection, 403, 611-B and 611-A and 403 – 402.
`I’m just following up on your answer. What would be the number j g p y
`
`
`
`Q.
`of problems?
`A.
`Probably there would be insufficient data. There would be a
`problem with the accuracy of the data. There might be a problem with errors
`
`in the datain the data.
`
`
`
`(Ex. 2013, O’Neil depo. at 94:24 – 96:6.)
`
`PrDX-32
`
`
`
`
`
`Kosaka Figure 1Kosaka – Figure 1
`
`PrDX-33
`
`
`
`
`
`Kosaka Figure 5Kosaka – Figure 5
`
`PrDX-34
`
`
`
`
`
`Kosaka Figure 9Kosaka – Figure 9
`
`PrDX-35
`
`
`
`Kosaka – Figure 10
`
`
`
`/ Kosaka — Figure 10
`
`( A J'
`
`( B ‘J
`
`F ig. 10
`
`50—) Apprgxuumgd distance reflected
`wave level
`‘
`‘
`tfun t
`F IU—I
`mpu
`c ion
`
`( C )
`
`M
`
`S
`
`2—) Risk evaluation value for fiiontwandg
`moving body
`FIIJ—I output functiomf
`FILI—III fust input function
`
`B
`
`5
`
`i D J
`
`M
`
`B
`
`504
`
`Sf4
`1 .
`.
`.
`—> Risk evaluation value in “self Internal
`slate
`.
`FILI—II output function!
`FILI—III second input function
`
`SB
`303
`—> “Self" 5-,];u3i3fi1 main engine mmfign rate,
`operation density.r index
`FlU—ll input function
`
`( E 3
`
`M
`
`S
`
`B
`
`SE
`505
`—) Risk evaluation value for comprehensive
`determination
`
`
`
`PrDX-36
`
`
`
`Kosaka – Figure 11
`
`
`
`Kosaka — Figure 11
`
`Fig. 11
`
`
`
`
`* Denotes absence afennsequent part
`
`FIU—I 1] rules
`
`* Denotes absence ofcomequent part
`
` /
`
`PrDX-37
`
`
`
`Ehsani’s Testimony – Fuzzy Logic Is Outside
`The POSITA As Defined By Liberty
`
`(Ex. 2016, Ehsani Decl. at ¶ 28.)
`
`PrDX-38
`
`
`
`Ehsani’s Testimony – Fuzzy Logic Is Outside
`The POSITA As Defined By Liberty
`
`(Ex. 2016, Ehsani Decl. at ¶ 29.)
`
`PrDX-39
`
`
`
`Miller Testimony – Fuzzy Logic Is Outside
`
`Th POSITA A D fi d B Lib tThe POSITA As Defined By Liberty
`
`(Ex. 2010, Miller Decl. at ¶ 14.)
`
`PrDX-40
`
`
`
`Liberty’s Expert Never Used Fuzzy
`
`LogicLogic
`
`(Ex. 2013, O’Neil depo. at 75:15-24.)
`
`PrDX-41
`
`
`
`Liberty’s Expert Never Used Fuzzy Logic
`
`(Continued on the next page)
`
`PrDX-42
`
`
`
`Liberty’s Expert Never Used Fuzzy Logic
`
`(Continued from the previous page)
`
`(Ex. 2013, O’Neil depo. at 78:11-79:10.)
`
`PrDX-43
`
`
`
`Ehsani’s Testimony – Kosaka Outputs Multiple Fuzzy
`Values
`
`(Ex. 2016, Ehsani Decl. at ¶ 34.)
`
`PrDX-44
`
`
`
`Ehsani’s Testimony – Kosaka Is Defective
`
`(Ex. 2016, Ehsani Decl. at ¶¶ 30-31.)
`
`PrDX-45
`
`
`
`Ehsani’s Testimony – Kosaka Is
`
`Defecti eDefective
`
`(Ex. 2016, Ehsani Decl. at ¶ 32.)
`
`PrDX-46
`
`
`
`Miller Testimony – Fuzzy Outputs Are Incompatible With
`Crisp Actuarial Class Approaches
`
`
`
`(Ex. 2010 at ¶43.)( ¶ )
`
`
`
`
`
`PrDX-47
`
`
`
`Liberty’s Witness O’Neil Cannot
`
`Opine on KosakaOpine on Kosaka
` Liberty’s insurance expert did not understand nor properly read
`
`the portions of Kosaka describing its generation of “riskthe portions of Kosaka describing its generation of risk
`evaluation values” (Ex. 2022, p. 80, line 18 – p. 81, line 16):
`
`
`
`(continued on the next page)( p g )
`
`
`
`PrDX-48
`
`
`
`Liberty’s Witness O’Neil Cannot Opine on Kosaka
`
`(continued)(continued)
`
`(Continued from previous page)
`
`PrDX-49
`
`
`
`Liberty’s Witness O’Neil Cannot Opine on Kosaka
`(continued) (Ex. 2022, p. 84, line 16 – p. 85, line 9)
`
`PrDX-50
`
`
`
`
`
`Kosaka’s Figure 9Kosaka s Figure 9
`
`Three Fuzzy
`Logic Units –
`each generating
`
`li krisk evaluation i
`
`
`values that are
`fuzzy (and
`incompatible
`tithwith actuarial i l
`
`
`
`
`classes)
`
`PrDX-51
`
`
`
`Kosaka’s Figure 10
`
`• Figure 10(E) provides the Output of FLU‐3 are
`
`Fuzzy Values.Fuzzy Values.
`• Kosaka does not disclose any “defuzzification”
`operation on FLU‐3’s Output Fuzzy Values .
`
`•(Note: Liberty’s own reference states(Note: Liberty s own reference states
`defuzzification is “optional.”)
`
`PrDX-52
`
`
`
`Kosaka’s Specification – Risk
`
`E al ation Val es Are FEvaluation Values Are Fuzzy
`
` “The output of p
`the first fuzzy
`logic part 62 and
`
`the secondthe second
`fuzzy logic part
`64 are
`conducted to a
`third fuzzy logic
`
`part 65 as fuzzy p y
`
`input values.”
`(Kosaka at p. 8,
`
`col 2 lines 12-col. 2, lines 12-
`15)
`
`PrDX-53
`
`
`
`Kosaka’s Specification – FLU-1’s Risk
`
`Evaluation Values Are Fuzzy (continued)Evaluation Values Are Fuzzy (continued)
`
` Figure “[10](B)
`
`hshows the output th t t
`
`
`
`function of the first
`fuzzy logic part 62
`
`and the first inputand the first input
`function of the third
`fuzzy logic part 65.
`
`By using theseBy using these
`[membership]
`functions, risk
`evaluation values
`bt i d fare obtained for
`
`the frontward
`moving body.”
`
`(Kosaka at p 8(Kosaka at p. 8,
`col. 2, lines 24-28)
`
`PrDX-54
`
`
`
`Kosaka’s Specification – FLU-2’s Risk
`
`Evaluation Values Are Fuzzy (continued)Evaluation Values Are Fuzzy (continued)
`
` Figure “[10](D)
`shows the output
`function of the
`second fuzzy logic
`d tht 64part 64 and the
`
`
`second input function
`of the third fuzzy
`
`logic part 65 Withlogic part 65. With
`these [membership]
`functions, risk
`
`evaluation valuesevaluation values
`are obtained for the
`‘self’ internal state.”
`(Kosaka at p. 8, col.
`2, lines 30-34)
`
`PrDX-55
`
`
`
`Kosaka’s Specification – FLU-3’s Overall Risk
`
`Evaluation Values Are Fuzzy (continued)Evaluation Values Are Fuzzy (continued)
`
`
`
`
` Figure “[10](E) g [ ]( )
`
`shows the output
`function of the third
`
`fuzzy logic part 65fuzzy logic part 65.
`With this
`[membership]
`ffunction, risk
`evaluation values
`are obtained for
`the final overall
`determination.”
`
`(Kosaka at p 8(Kosaka at p. 8,
`col. 2, lines 35-37)
`
`PrDX-56
`
`
`
`Kosaka – Fuzzy Logic Essential To The
`
`IInventioni
`
`
`(g) EFFECT OF THE INVENTION
`In accordance with the risk
`evaluation device of the invention, it is
`
`possible to include empirical evaluations inpossible to include empirical evaluations in
`risk evaluations carried out using fuzzy
`logic, and thus risk evaluation values can
`be expected to be more accurate, because
`they are not susceptible to external noise
`and the like.
`
`(Ex. 1004 at p. 9, col. 1, lines 7-13.)
`
`PrDX-57
`
`
`
`Ehsani’s Testimony - Fuzzy Logic Essential To Kosaka’s
`
`InventionInvention
`
`(Continued on the next page)
`
`PrDX-58
`
`
`
`Ehsani’s Testimony - Fuzzy Logic Essential To Kosaka’s
`
`InventionInvention
`
`(Continued from previous page)
`
`
`
`(Continued on the next page)( p g )
`
`
`
`PrDX-59
`
`
`
`Ehsani’s Testimony - Fuzzy Logic Essential To The
`
`Kosaka’s InventionKosaka s Invention
`
`(Continued from previous page)
`
`(Ex. 2016, Ehsani Decl. at ¶34(b).)
`
`PrDX-60
`
`
`
`Claim 4 – Kosaka Does Not Disclose “Initial
`
`Operator Profile”Operator Profile
`
`(Ex. 1004 at p. 7, col. 1, lines 34-48.)
`
`PrDX-61
`
`
`
`Claims 4, 5, 16, and 17 – Kosaka Does Not
`Disclose “Base Cost Of Insurance”
`
`(Ex. 1004 at p. 4, col. 1, lines 8-14.)
`
`PrDX-62
`
`
`
`Claims 4, 5, 16, and 17 – Kosaka Does Not
`Disclose “Base Cost Of Insurance”
`
`(Ex. 1004 at p. 9, col. 1, lines 34-38.)
`
`PrDX-63
`
`
`
`Liberty’s Petition Misquotes Black
`
`Magic Three TimesMagic Three Times
`
`Actual Text
`From Black Magic
`“The unit records information
`such as driving speed, time
`and distance travelled and
`
`fuel consumption ”fuel consumption.
`
`Petition’s Version
`Of Black Magic
`“The unit records information
`such as driving speed, time,
`and distance travelled and
`
`fuel consumption ”fuel consumption.
`
`(Ex. 1008 at 2; Petition at 39, 61, and 63.)
`
`PrDX-64
`
`
`
`Grounds In The Second ‘970 Petition Fail
`
`T R dTo Render the ‘970 Unpatentableth ‘970 U t t bl
`
`
`
` Herrod does not disclose or teach the actuarial class
`
`limitations of claims 1 6 and 18limitations of claims 1, 6, and 18
`
` Pettersen does not disclose or teach the “Selected
`Period” limitations of claim 1
`
` The combination of Bouchard Pettersen and Florida The combination of Bouchard, Pettersen, and Florida
`
`Guide do not disclose or teach multiple features of
`claims 4 and 5
`
`Selected Period Selected Period
` Insured Profile
` Operator Profile
`
`PrDX-65
`
`
`
`Claim 1 – Determining A Cost Of Insurance For The
`
`Vehicle During The Selected Time PeriodVehicle During The Selected Time Period
`
`Claim 1:
`
`1 A method of generating a database comprising data elements representative of1. A method of generating a database comprising data elements representative of
`operator or vehicle driving characteristics, the method comprising:
`generating actuarial classes of insurance, which group operators or vehicles having
`a similar risk characteristic, from actual monitored driving characteristics during
`
`la selected time period as represented by recorded data elements representative t d ti i d t d b d d d t l t t ti
`
`
`
`
`
`
`
`of an operating state of the vehicles or an action of the operators; and
`monitoring a plurality of the data elements representative of an operating state of a
`vehicle or an action of an operator during a latter selected time period; and,
`recording selected ones of the plurality of data elements into the database when
`said ones are determined to be appropriate for recording relative to determining a
`cost of insurance for the vehicle during the latter selected time period, said ones
`
`including a time and location of vehicle operation and a corresponding log ofincluding, a time and location of vehicle operation and a corresponding log of
`vehicle speed for the time and location.
`
`PrDX-66
`
`
`
`Claims 4, 5, 16, And 17 – The
`
`Selected PeriodSelected Period
` Claim 4 requires monitoring driving characteristics during a
`
`selected period and deciding a total cost of insurance forselected period, and deciding a total cost of insurance for
`that selected period based on the monitored driving
`characteristics.
`
` This differs from basing the cost of insurance for a
`prospective period on the monitored driving characteristics.
`
` Pettersen’s bonus arrangement passage and Liberty’s
`expert fail to satisfy claim 4’s “selected period” limitation.
`
` (This is also applicable to claims 5, 16, and 17.)
`
`PrDX-67
`
`
`
`
`
`Claim 4 – The Selected PeriodClaim 4 The Selected Period
`
`4. A method of insuring a vehicle operator for a selected period based
`
`upon operator driving characteristics during the period comprisingupon 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 y g y
`
`
`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;
`
`
`
`
`
`
`
`itmonitoring the vehicle operator's driving characteristics during the selected i th hi l t ' d i i h t i ti d i th l t d
`
`
`
`
`
`
`
`
`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.p
`
`PrDX-68
`
`
`
`
`
`Claim 4 – Insured ProfileClaim 4 Insured Profile
`
`
`
`4. A method of insuring a vehicle operator for a selected period based
`
`upon operator driving characteristics during the period comprisingupon 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 y g y
`
`
`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;
`
`
`
`
`
`
`
`itmonitoring the vehicle operator's driving characteristics during the selected i th hi l t ' d i i h t i ti d i th l t d
`
`
`
`
`
`
`
`
`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.p
`
`
`PrDX-69
`
`
`
`Pettersen – No Motivation From Florida Guide
`
`To Use An Insured ProfileTo Use An Insured Profile
`
`(Ex. 1005 at 3.)
`
`PrDX-70
`
`
`
`
`
`Claim 4 Operator ProfileClaim 4 – Operator Profile
`
`4. A method of insuring a vehicle operator for a selected period based
`
`upon operator driving characteristics during the period comprisingupon 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 y g y
`
`
`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;
`
`
`
`
`
`
`
`itmonitoring the vehicle operator's driving characteristics during the selected i th hi l t ' d i i h t i ti d i th l t d
`
`
`
`
`
`
`
`
`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.p
`
`
`PrDX-71
`
`
`
`Liberty’s Passage From Bouchard Does
`
`lN t DiNot Disclose An Operator ProfileA O t P fil
`
`
`
`
`(Ex. 1004 at 5:59-63.)
`
`PrDX-72
`
`
`
`Cases CBM2012-00002; -00004
`Patent 6,064,970
`Attorney Docket No.: 185378-610007
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on this 11th day of October, 2013, a true and correct
`
`
`
`
`
`copy of the foregoing PATENT OWNER’S ORAL ARGUMENT
`
`DEMONSTRATIVE EXHIBITS was served, in accordance with the parties’
`
`electronic service agreement, by electronic mail upon the following counsel for
`
`Petitioner Liberty Mutual Insurance Co.
`
`Steven.baughman@ropesgray.com
`Nicole.jantzi@ropesgray.com
`LibertyMutualPTABService@ropesgray.com
`
`
`
`
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`
`
`/s/ James L. Wamsley
`James L. Wamsley
`Registration No. 31,578
`JONES DAY
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`Attorney for Patent Owner
`Progressive Casualty Insurance Co.
`
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