Trials@uspto.gov
`571-272-7822
`
`
`
`
`
` Paper 10
`Entered: March 28, 2013
`
`
`
`
`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 CBM2013-00009 (JL)
`Patent 8,140,358
`____________
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`LEE, Administrative Patent Judge
`
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
` Paper 10
`Entered: March 28, 2013
`
`
`
`
`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 CBM2013-00009 (JL)
`Patent 8,140,358
`____________
`
`
`
`Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
`Administrative Patent Judges.
`
`
`LEE, Administrative Patent Judge
`
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`I.
`
`INTRODUCTION
`
`On November 19, 2012, Liberty Mutual Insurance Company
`
`(“Liberty”) filed a petition (“Pet.”) requesting a review under the transitional
`
`program for covered business method patents of U.S. Patent 8,140,358 (“the
`
`’358 patent”)(Ex. 1001). The patent owner, Progressive Casualty Insurance
`
`Company (“Progressive”), filed a preliminary response (“Prel. Resp.”) on
`
`February 21, 2013. We have jurisdiction under 35 U.S.C. § 324. See
`
`section 18(a) of the Leahy-Smith America Invents Act, Pub. L. 112-29,
`
`125 Stat. 284, 329 (2011) (“AIA”).
`
`This is the second petition Liberty has filed requesting a covered
`
`business method patent review of the ’358 patent. The first petition was
`
`filed on September 16, 2012. On February 12, 2013, the Board instituted
`
`review (CBM2012-00003) on some of the grounds alleged by Liberty in that
`
`first petition. (Ex. 2009.) This second petition presents grounds not raised
`
`in Liberty’s first petition.
`
`The standard for instituting a covered business method review is set
`
`forth in 35 U.S.C. § 324(a), which provides as follows:
`
`THRESHOLD --The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is
`more likely than not that at least 1 of the claims challenged in
`the petition is unpatentable.
`
`Liberty challenges the patentability of claims 1-20 of the ’358 patent.
`
`Taking into account Progressive’s preliminary response, we determine that
`
`2
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`the information presented in the petition demonstrates that it is more likely
`
`than not that the challenged claims are unpatentable. Pursuant to 35 U.S.C.
`
`§§ 324 and section 18(a) of the AIA, we authorize a covered business
`
`method review of claims 1-20 of the ’358 patent for the grounds identified in
`
`the Order section of this decision.
`
`Liberty’s petition is GRANTED.
`
`A. Liberty’s Standing
`
`Liberty certifies that the ’358 patent was asserted against it in Case
`
`No. 1:10-cv-01370, Progressive Cas. Ins. Co. v. Safeco Ins. Co. of Ill. et al.,
`
`pending in the U.S. District Court for the Northern District of Ohio. (Pet. 7.)
`
`Progressive does not dispute that certification.
`
`B.
`
`Prior Art Relied Upon
`
`Liberty relies upon the following prior art references:
`
`
`US Patent 4,651,157 (Gray)
`
`
`
`Mar. 17, 1987
`
`Exhibit 1023
`
`US Patent 5,243,530 (Stanifer)
`
`Sept. 7, 1993
`
`Exhibit 1025
`
`US Patent 5,210,854 (Beaverton) May 11, 1993
`
`Exhibit 1007
`
`US Patent 5,465,079 (Bouchard)
`
`Nov. 7, 1995
`
`Exhibit 1022
`
`US Patent 5,438,312 (Lewis)
`
`
`
`Aug. 1, 1995
`
`Exhibit 1024
`
`US Patent 5,446,757 (Chang)
`
`Aug. 29, 1995
`
`Exhibit 1006
`
`US Patent 7,228,211 (Lowrey)
`
`June 5, 2007
`
`Exhibit 1008
`
`“Understanding Radio Determination Satellite Service,” Geostar
`
`
`
`
`
`(RDSS)
`
`
`
`
`
`
`
`
`
`May 1989
`
`Exhibit 1004
`
`Geostar Corp., Annual Report (Form 10-K)
`(Geostar 10-K)
`
`
`
`Apr. 16, 199 0
`
`Exhibit 1005
`
`3
`
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`Japan Patent App. H4-182868
`(Kosaka)
`
`
`
`
`June 30, 1992
`
`Exhibit 1003
`
`
`C. Alleged Grounds of Unpatentability
`
`Liberty seeks cancelation of claims 1-20 based on the following
`
`
`
`
`
`grounds:
`
`1. Claims 1, 3, 5, 8, 9, 19, and 20 as obvious over RDSS and Kosaka.
`
`2. Claim 2 as obvious over RDSS, Kosaka, and Chang.
`
`3. Claim 4 as obvious over RDSS, Kosaka, and Beaverton.
`
`4. Claims 6 and 7 as obvious over RDSS, Kosaka, and Stanifer.
`
`5. Claims 10, 11, and 13-15 as obvious over RDSS, Kosaka, and
`Lowrey.
`
`6. Claim 12 as obvious over RDSS, Kosaka, and Lowrey.
`
`7. Claims 16, 17, and 18 as obvious over RDSS, Kosaka, and
`Bouchard.
`
`8. Claims 17 and 18 as obvious over RDSS, Kosaka, Bouchard, and
`Gray.
`
`9. Claims 17 and 18 as obvious over RDSS, Kosaka, Bouchard, and
`Lewis.
`
`II.
`
`FINDINGS OF FACT
`
`
`
`The findings of fact in this section and others in the analysis section
`
`are supported by a preponderance of the evidence.
`
`
`
`
`
`
`
`
`
`4
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`
`
`A. RDSS1
`
`RDSS discloses a vehicle telematics system that wirelessly transmits
`
`“position data, status or alarms, and messages” from a variety of vehicles to
`
`a central location for processing and management. (Ex. 1004, 22:2:6-15.)
`
`Certain processing may be performed on the local vehicular system, but
`
`operations “requiring extensive processing” are instead performed at the
`
`central location, thus “reducing the sophistication and cost of the terminal.”
`
`(Ex. 1004, 52:1:1-9.) Text messages are stored in a memory local to the
`
`vehicle for the benefit of later recall and transmission. (Ex. 1004, 54:2:1-8.)
`
`The central location uses a server/computer system that processes incoming
`
`data and maintains automated file and storage facilities. (Ex. 1004, 22:2:6-
`
`16; 46:2:24-40.) Data collected in this way is made available for billing
`
`purposes. (Ex. 1004, 49:1:7-14.)
`
`
`
`B. Kosaka2
`
`Kosaka discloses a combination risk evaluation device and insurance
`
`premium determination device that makes use of the risk evaluation device.
`
`(Ex. 1003, 18:1:53 to 18:2:3.) The risk evaluation device evaluates risk in
`
`moving bodies such as vehicles or insurance customers. Id. With regard to
`
`prior art, Kosaka describes that pre-existing conventional insurance premium
`
`determination systems determine rates based on static attributes of the
`
`customer. (Ex. 1003, 18:2:15-19). For instance, Kosaka describes that in
`
`
`
`1 All citations to RDSS refer to the page numbers of Exhibit 1004.
`
`2 All citations to Kosaka refer to the page numbers of Exhibit 1003
`appearing on the lower right corner of each page of the exhibit.
`5
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`pre-existing systems, it is normal for there to be no distinction in insurance
`
`premiums between operators who always operate safely and operators who
`
`occasionally take risks, and that it is therefore unfair to apply the same
`
`insurance premium to both. (Ex. 1003, 18:2:36-42.) It is a stated objective
`
`of Kosaka that insurance premiums can be increased or decreased by
`
`“continually” determining insurance premium changes through the detection
`
`of states that lead to risk. (Ex. 1003, 18:2:43-52.)
`
`Figure 1 of Kosaka is reproduced below, which illustrates a high level
`
`block diagram of Kosaka’s device:
`
`Fig.1 shows a block diagram of Kosaka’s device
`
`
`
`External sensor 1 and internal sensor 2 detect data about the vehicle or
`
`insurance customer to provide as input to fuzzy logic part 3 (FLU 3).
`
`(Ex. 1003, 20:2:4-20.) The FLU 3 determines the comprehensive risk based
`
`on the input sensor data, making use of risk evaluation values stored in fuzzy
`
`memory 4 (FLM 4). (Ex. 1003, 18:2:20-26.) The premium calculation part
`
`6
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`6 (CAL 6) performs temporal integration and computation of risk evaluation
`
`values, and thereby calculates insurance premiums. (Ex. 1003, 20:2:26-31.)
`
`A system clock CLK 5 supplies a timing signal to CAL 6 that is connected
`
`to an output interface MRW 7. (Ex. 1003, 20:2:31-35.) MRW 7 includes
`
`an electronic currency transfer request means or a prepayment amount
`
`erasing means, making use of MEM 8, a monetary amount file part
`
`including memory that stores a prepayment balance or a transfer-side
`
`currency on-line system. (Ex. 1003, 20:2:36-38.)
`
`Kosaka discloses specific uses of its device of Figure 1 in two
`
`application embodiments. In the first, the device is incorporated within a
`
`diving watch to be worn by a diver while diving. (Ex. 1003, 20:2:39-41.) In
`
`the second, the device is installed on a vehicle. (Ex. 1003, 22:2:3-6.) The
`
`vehicle embodiment employs as a sensor a doppler radar, or alternatively
`
`ultrasound waves, to detect the operating speed of the vehicle. (Ex. 1003,
`
`22:2:7-11.) Kosaka describes an effect of its invention as follows:
`
`Moreover, by using the risk evaluation device employing
`a risk evaluation part that operates by fuzzy logic together with
`an insurance premium determination system, change in
`insurance premiums in accordance with continually varying risk
`evaluation values can be settled in real time, thereby allowing
`insurance to be more equitable.
`
`(Ex. 1003, 25:1:27-34.)
`
`
`
`
`
`
`7
`
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`III. 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). Also, the broadest
`
`reasonable construction is determined from the perspective of one of
`
`ordinary skill in the art. Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed.
`
`Cir. 2005) (en banc). In some cases, the ordinary meaning of claim
`
`language as understood by a person of skill in the art may be readily
`
`apparent even to lay judges, and claim construction in such cases involves
`
`little more than the application of the widely accepted meaning of commonly
`
`understood words. Id., at 1314.
`
`In this case, Liberty sets forth no claim construction that is
`
`purportedly different between that from the perspective of one with ordinary
`
`skill in the art on the one hand, and that of lay persons on the other hand.
`
`We have no basis to conclude otherwise. For purposes of this decision we
`
`proceed on the basis that the plain and ordinary meaning of words in their
`
`common usage applies, albeit taken in the context of the disclosure of the
`
`’358 patent.
`
`rating factor
`
`Liberty states that under the rule of broadest reasonable interpretation
`
`in light of the specification, “rating factor” means “a calculated insurance
`
`risk value such as a safety score or a usage discount.” (Pet. 15:20 to 16:3.)
`
`8
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`In support of that assertion, Liberty cites to various portions of the
`
`specification of the ’358 patent. (Pet. 16:3-9.) The interpretation offered by
`
`Liberty has ample basis in the specification, and Progressive presents no
`
`opposition to that interpretation. On this record, we agree with that
`
`interpretation.
`
`In the Board’s decision instituting CBM2012-00003 for covered
`
`business method patent review of the ’358 patent (Ex. 2009), we also agreed
`
`with Liberty’s urging of the same interpretation for “rating factor,” but
`
`added the clarification that “an insurance risk value would be a value that
`
`reflects an associated level of insurance risk and, therefore, also a
`
`corresponding insurance premium.” (Ex. 2009, 6:21-23.) We adopt the
`
`same clarification here because “rating factor” in the context of the
`
`disclosure of the ’358 patent has to do with insurance rating and should be
`
`tied to a determination of insurance premium.
`
`Progressive argues that our clarification is unduly narrow because
`
`safety score standing alone is just an indication of operational safety and
`
`does not reflect a corresponding insurance premium. (Prel. Resp. 10:1-4.)
`
`The argument is unpersuasive. It is precisely because a safety score standing
`
`alone does not relate to insurance premium calculation that we make the
`
`clarification that an insurance risk value would be a value that reflects an
`
`associated level of insurance risk and, therefore, also a corresponding
`
`insurance premium. If safety score is regarded as a rating factor, it should
`
`have an influence or effect on insurance premium. By the clarification, we
`
`9
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`do not mean that an insurance risk value must be associated with a
`
`specifically corresponding insurance premium amount, but only that it has a
`
`role or significance in the calculation of an insurance premium.
`
`We note that with or without the clarification discussed above, our
`
`analysis below does not change and we arrive at the same decision to
`
`institute review on all grounds of unpatentability alleged by Liberty.
`
`B. Covered Business Method Patent
`
`Under § 18(a)(1)(E) of the AIA, the Board may institute a transitional
`
`proceeding only for a patent that is a covered business method patent.
`
`Section 18(d)(1) of the AIA defines the term “covered business method
`
`patent” to mean:
`
`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
`or service, except that the term does not include patents for
`technological inventions.
`
`For reasons discussed below, we agree with Liberty that the ’358
`
`patent is a covered business method patent under § 18(a)(1)(E) of the AIA.
`
`On pages 30-31 of Progressive’s preliminary response, Progressive
`
`incorporates by reference all of its arguments in the preliminary response it
`
`submitted in CBM2012-00003 on the subject of whether the ’358 patent
`
`constitutes a covered business method patent. Per 37 C.F.R. § 42.6(a)(3),
`
`such incorporation by reference is impermissible. Accordingly, the
`
`arguments need not be considered. In any event, we have already
`
`10
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`considered those arguments in CBM2012-00003 with regard to the same
`
`patent; the arguments are equally unpersuasive in this case.
`
`The legislative history explains that the definition of covered business
`
`method patent was drafted to encompass patents “claiming activities that are
`
`financial or complementary to financial activity.” 157 Cong. Rec. S5432
`
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer).
`
`Section 18(d)(2) of the AIA provides that “the Director shall issue
`
`regulations for determining whether a patent is for a technological
`
`invention.” The legislative history points out that the regulation for this
`
`determination should exclude only “those patents whose novelty turns on a
`
`technological innovation over the prior art and are concerned with a
`
`technical problem which is solved with a technical solution and which
`
`requires the claims to state the technical features which the inventor desires
`
`to protect.” 157 CONG. REC. S1364 (daily ed. Mar. 8, 2011) (statement of
`
`Sen. Schumer).
`
`Pursuant to that statutory mandate, the Office promulgated 37 C.F.R.
`
`§ 42.301(b) to define the term “technological invention” for the purposes of
`
`the Transitional Program for Covered Business Method Patents. Therefore,
`
`for determining whether a patent is for a technological invention in the
`
`context of the Transitional Program for Covered Business Method Patents,
`
`37 C.F.R. § 42.301(b) identifies the following for consideration:
`
`whether the claimed subject matter as a whole recites a
`technological feature that is novel and unobvious over the prior
`art; and solves a technical problem using a technical solution.
`
`11
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`The determination of whether a patent is eligible for covered business
`
`method review is based on what the patent claims. A patent having even just
`
`one claim directed to a covered business method is eligible for review.3
`
`Claim 1 of the ’358 patent begins with this preamble: “A system that
`
`monitors and facilitates a review of data collected from a vehicle that is used
`
`to determine a level of safety or cost of insurance.” Claim 1 ends with the
`
`recitation: “where the server is further configured to generate a rating
`
`factor based on the selected vehicle data stored in the database.” As we
`
`have determined above, in the context of the specification of the ’358 patent,
`
`a “rating factor” is a calculated insurance risk value such as a safety score or
`
`a usage discount, which reflects a level of insurance risk and a
`
`corresponding insurance premium. Claim 1 is reproduced below:
`
`A system that monitors and facilitates a review of
`1.
`data collected from a vehicle that is used to determine a level
`of safety or cost of insurance comprising:
`
`a processor that collects vehicle data from a vehicle bus
`that represents aspects of operating the vehicle;
`
`a memory that stores selected vehicle data related to a
`level of safety or an insurance risk in operating a vehicle;
`
`a wireless transmitter configured to transfer the selected
`vehicle data retained within the memory to a distributed
`network and a server;
`
`a database operatively linked to the server to store the
`selected vehicle data transmitted by the wireless transmitter, the
`
`
`
`3 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) (Resp. to Comment 8).
`12
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
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`database comprising a storage system remote from the wireless
`transmitter and the memory comprising records with operations
`for searching the records and other functions;
`
`where the server is configured to process selected vehicle
`data that represents one or more aspects of operating the vehicle
`with data that reflects how the selected vehicle data affects a
`premium of an insurance policy, safety or level of risk; and
`
`where the server is further configured to generate a
`rating factor based on the selected vehicle data stored in the
`database.
`
`(Emphasis added.)
`
`It cannot reasonably be disputed that Progressive claims an “apparatus
`
`for performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service.” Claim 1
`
`itself states that the system is used to determine a level of safety or cost of
`
`insurance and requires an operation on data which reflects how certain
`
`collected data affects a premium of an insurance policy, safety, or level of
`
`risk. The claim also states that the server is configured “to generate a rating
`
`factor,” and we have determined that “rating factor” means a calculated
`
`insurance risk value that reflects a corresponding insurance premium. The
`
`question at issue here centers on the “technological invention” exception to a
`
`covered business method patent.
`
`To qualify under the “technological invention” exception to covered
`
`business method patent review, it is not enough that the invention makes use
`
`of technological systems, features, or components. The exception is not that
`
`the claimed invention makes use of technology. We agree with Liberty that
`
`13
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`U.S. Patent No. 8,140,358
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`the subject matter of claim 1 does not satisfy the “technological invention”
`
`exception to covered business method patent review.
`
`In determining whether a patent is for a technological invention,
`
`37 C.F.R. § 42.301(b) provides that it shall be considered whether the
`
`claimed invention as a whole:
`
`recites a technological feature that is novel and
`1.
`unobvious over the prior art, and
`
`2.
`solution.
`
`Simply making use of technology is not the test for meeting the
`
`solves a technical problem using a technical
`
`
`
`“technological invention” exception. In that regard, the Office Patent Trial
`
`Practice Guide, 77 FED. REG. at 48764, states:
`
`The following claim drafting techniques typically would
`not render a patent a technological invention:
`
` (a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`
`In the Notice of Allowance and Issue Fee(s) Due of the ’358 patent,
`
`the Examiner stated the following about U.S. Patent 5,835,008 (“Colemere”)
`
`which was issued on November 10, 1998, almost ten years prior to the actual
`
`filing date of the ’358 patent:
`
`
`
`
`
`14
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`The prior art of record (US 5835008, Colemere, Jr.) teaches:
`
` a
`
` processor that collects vehicle data from a vehicle bus that
`represents aspects of operating the vehicle;
`
` a
`
` memory that stores selected vehicle data related to a level of
`safety or an insurable risk in operating a vehicle;
`
` a
`
` wireless transmitter configured to transfer the selected vehicle
`data retained within the memory to a distributed network and a
`server;
`
` a
`
` database operatively linked to the server to store the selected
`vehicle data transmitted by the wireless transmitter, the
`database comprising a storage system remote from the wireless
`transmitter and the memory comprising records with operations
`for searching the records and other functions.
`
`(Ex. 1002, 26:3-13.)
`
`
`
`The above fully accounts for all the technical features of claim 1.
`
`According to the Examiner, the features missing from Colemere with respect
`
`to the claimed invention relate to the requirements that the server processes
`
`the vehicle data with other data that reflects how the vehicle data affects the
`
`premium of an insurance policy, safety or level of risk, and that the server
`
`generates a rating factor. (Ex. 1002, 26:16 to 27:2.) We have determined
`
`that “rating factor” means a calculated insurance risk value used for
`
`calculating a corresponding insurance premium. As such, the difference
`
`between the invention of claim 1 and the prior art does not lie in any
`
`technological feature, but on the nature of the data being processed and the
`
`meaning of the output data.
`
`15
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`U.S. Patent No. 8,140,358
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`
`
`Also, as is pointed out by Liberty, U.S. Patent 6,064,970, an ancestral
`
`patent of the ’358 patent, filed on August 17, 1998, discloses that current
`
`motor vehicle control and operating systems comprise electronic systems
`
`that are readily adaptable for modification to obtain the desired types of
`
`information relevant to the determination of the cost of insurance.
`
`(Ex. 1011, 3:25-28.) We find the same description in U.S. Patent 5,797,134,
`
`the earliest ancestral patent named on the face of the ’358 patent, and filed
`
`on January 29, 1996. (Ex. 1010, 3:27-30.) For all of the foregoing reasons,
`
`the subject matter of claim 1 does not recite a technological feature that is
`
`novel and unobvious over the prior art.
`
`With regard to the other consideration of the “technological
`
`invention” analysis, that the claimed subject matter solves a technical
`
`problem using a technical solution, we agree with Liberty that the problem
`
`noted in the specification about the prior art is not a technical problem.
`
`Specifically, in column 1, lines 24-29, the ’358 patent (Ex. 1001) states:
`
`Some data used to classify risk is not verified and has little
`relevance to measuring risk. Systems may accumulate and
`analyze significant amounts of data and yet discover that the
`data does not accurately predict losses. The data may not be
`validated, may be outdated, and may not support new or
`dynamic risk assessments.
`
`The issue discussed concerns the potency and effectiveness of the data
`
`being analyzed for purposes of determining risk and predicting insurance
`
`losses. That is not a technical problem. Rather, it is a conceptual problem in
`
`not choosing to collect more accurate data for risk analysis.
`
`16
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`
`
`Citing 157 Cong. Rec. S5428 (daily ed. September 8, 2011)
`
`(statements of Sen. Durbin and Sen. Schumer), Progressive argues that
`
`“congressional intent of the America Invents Act (‘AIA’) was not meant to
`
`target companies, like Progressive, which employ ‘thousands of American
`
`workers in developing and commercializing financial sector products that
`
`are based on business methods.” (Prel. Resp. 31:3-8.) The argument is
`
`misplaced if Progressive means that some categories of invention are
`
`presumptively regarded as falling within the technological invention
`
`exception without consideration of whether the subject matter as a whole
`
`(i) recites a technological feature that is novel and unobvious over the prior
`
`art, and (ii) solves a technical problem using a technical solution. Nothing
`
`cited to us by Progressive in the legislative history of AIA makes that
`
`suggestion.
`
`
`
`Although insurance industry patents may not be targeted by AIA for
`
`covered business method patent review, each claimed invention still has to
`
`be evaluated individually to determine if it constitutes a technological
`
`invention. A determination of what constitutes a technological invention
`
`under the statute is made on a case-by-case and claim-by-claim basis.
`
`Merely having employees and conducting a business does not exempt a
`
`patent holder from covered business method patent review. 157 Cong. Rec.
`
`S5428 (daily ed. September 8, 2011) (statement of Sen. Schumer).
`
`For the foregoing reasons, the subject matter of claim 1 is not a
`
`“technological invention” under 37 C.F.R. § 42.301(b). Accordingly, the
`
`’358 patent is eligible for a covered business method review.
`
`17
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`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`
`
`C. Effective Filing Date of the Claims of the ’358 Patent
`
`The application resulting in the ‘358 patent was filed on June 3, 2008
`
`and identifies a chain of four ancestral applications the earliest of which is
`
`Application 08/592,958, filed January 29, 1996. Liberty argues that the
`
`claims 1, 16, 17, 19, and 20 of the ’358 patent are not entitled to an effective
`
`filing date earlier than January 23, 2004 and that claims 2-15 and 18 of the
`
`’358 patent are not entitled to an effective filing date earlier than June 3,
`
`2008. (Pet. 12-14.) We do not reach the merits of Liberty’s arguments
`
`because entitlement to a priority date for any claim is a matter for which
`
`Progressive bears the burden of proof. In that regard, Progressive has made
`
`only a conclusory statement, without any explanation or justification, that its
`
`claimed subject matter is entitled to the January 29, 1996, filing date of
`
`Application 08/592,958. (Prel. Resp. 10:19-20.) We note also that the
`
`burden of proof on the ultimate issue of unpatentability stays with Liberty,
`
`whatever effective filing date is established by Progressive for its claims.
`
`To the extent that Progressive believes that it has incorporated by
`
`reference the arguments it submitted in CBM2012-00003 with regard to
`
`establishing an earlier effective filing date for its claims, we find no such
`
`language in the preliminary response. In any event, per 37 C.F.R.
`
`§ 42.6(a)(3), incorporation of arguments by reference is impermissible.
`
`Even assuming that the same arguments submitted by Progressive in
`
`CBM2012-00003 are presented here, they are equally without merit in this
`
`case as they are in CBM2012-00003.
`
`18
`
`
`
`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`For the foregoing reasons, through its preliminary response
`
`Progressive has not shown that any of claims 1-20 in the ’358 patent are
`
`entitled to an effective filing date prior to the actual filing date of the ’358
`
`patent, June 3, 2008.
`
`Same or Substantially the Same Prior Art
`or Arguments Previously Considered
`
`D.
`
`
`Progressive contends that Liberty’s alleged grounds of unpatentability
`
`are all based on Kosaka and RDSS, and that Kosaka was considered during
`
`prosecution of the ’358 patent. (Prel. Resp. 20:13-15.) Progressive further
`
`contends that RDSS is cumulative of other references which also were
`
`considered during prosecution of the ’358 patent. (Prel. Resp. 20:15-16.)
`
`Progressive points out that Kosaka was not only provided during
`
`prosecution of the ’358 patent, but also discussed at length in a
`
`reexamination request relating to an ancestral application of the ’358 patent.
`
`(Prel. Resp. 20:18-20.) Progressive notes that a copy of the reexamination
`
`request was provided to the examiner during examination of the ’358 patent.
`
`(Prel. Resp. 20:18-20.) According to Progressive, the examiner of the ’358
`
`patent had as much information about Kosaka’s disclosure as is presented in
`
`Liberty’s petition here. (Prel. Resp. 21:6-8.) Thus, Progressive argues that
`
`Liberty’s petition presents the same art and the same or substantially the
`
`same arguments as those which were previously presented to the Office.
`
`(Prel. Resp. 21:7-9.) Even if true, that does not mean Liberty’s petition must
`
`be denied. It is important for us to evaluate independently the substantive
`
`19
`
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`merit of the alleged grounds of unpatentability, albeit taking into
`
`consideration the prosecution history of the ’358 patent.
`
`Title 35, United States Code, Section 325(d) states:
`
`In determining whether to institute or order a proceeding
`under . . . chapter 31, the Director may take into account
`whether, and reject the petition or request because, the same or
`substantially the same prior art or arguments previously were
`presented to the Office.
`
`
`The above-quoted statutory provision does not require the Director, in
`
`deciding whether to institute inter partes review, to defer to a prior
`
`determination in the Patent and Trademark Office, even one which
`
`considered the same prior art and arguments. The statute gives the Director
`
`the authority not to institute review on the basis that the same or
`
`substantially the same prior art or arguments were presented previously to
`
`the Patent and Trademark Office, but does not require that result.
`
`We appreciate the information provided by the patent owner. The
`
`information has been considered. Nevertheless, it does not necessarily
`
`follow that covered business method patent review should not be instituted.
`
`For instance, in our view, RDSS is not “substantially the same” or
`
`cumulative to the prior art references before the examiner during prosecution
`
`of the ’358 patent. In particular, note that according to RDSS, while certain
`
`processing may be performed on the local vehicular system, operations
`
`“requiring extensive processing” are instead performed at the central
`
`location, thus “reducing the sophistication and cost of the terminal.”
`
`20
`
`
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`Case CBM2013-00009
`U.S. Patent No. 8,140,358
`
`(Ex. 1004, 52:1:1-9.) That recognition is not expressed so clearly in other
`
`references.
`
`We decline to deny Liberty’s petition based on considerations under
`
`35 U.S.C. § 325(d).
`
`E. Grounds of Rejection based on RDSS and Kosaka
`
`Claim 1 is the sole independent claim. Claims 2-20 depend directly or
`
`indirectly from claim 1. Liberty contends that claims 1, 3, 5, 8, 9, 19, and 20
`
`would have been obvious over RDSS and Kosaka under 35 U.S.C. § 103,
`
`and that claims 2, 4, 6, 7, and 10-18 would have been obvious over RDSS,
`
`Kosaka, and one or more of other prior art references under 35 U.S.C. § 103.
`
`In support of its contention, Liberty provides a claim chart to show how each
`
`claim limitation is met by the cited prior art references (Pet. 29-75), and
`
`describes how a person of ordinary skill in the art would have known how to
`
`combine the teachings to arrive at the subject matter of each of Progressive’s
`
`claims (Pet. 17-29, 43-44, 46-47, 50-52, 58-61, 65-66, 68-71.) Progressive
`
`opposes and argues that a combination of RDSS and Kosaka would not have
`
`described certain limitations of claim 1. (Prel. Resp. 11-20.) On this record,
`
`Liberty’s arguments have merit, and we are unpersuaded by Progressive’s
`
`counter-arguments.
`
`Claim 1 recites a processor that collects vehicle data from a vehicle
`
`bus and a memory that stores the selected vehicle data. Claim 1 also recites
`
`a wireless transmitter to transfer the selected vehicle data retained within the
`
`memory to a distributed network and a server. Claim 1 further recites a
`
`database operatively linked to t
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