Covered Business Method Patent Review
`United States Patent No. 8,140,358
`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
`Patent 8,140,358
`______________
`
`Before the Honorable JAMESON LEE, JONI Y. CHANG, and MICHAEL R.
`ZECHER, Administrative Patent Judges.
`
`PETITIONER LIBERTY MUTUAL INSURANCE CO.’S REPLY TO
`PATENT OWNER PROGRESSIVE CASUALTY INSURANCE CO.’S
`RESPONSE
`
`
`
`
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,140,358
`
`
`TABLE OF CONTENTS
`
`Relief Requested and Preliminary Statement ............................................................. 1
`The Geostar 10-K Confirms What a POSITA Would Understand From
`Reading RDSS: That RDSS is Useful for Insurance Purposes ............................... 2
`III. The Board Correctly Concluded It Would Be Obvious to Implement
`Kosaka’s Insurance Risk Analysis at Geostar’s Central Facility ............................. 4
`IV. RDSS and the 10-K in view of Kosaka Disclose or Render Obvious the
`“Rating Factor” Limitation ........................................................................................ 12
`The Board’s Institution Decision Was Correct ....................................................... 15
`
`
`I.
`II.
`
`V.
`
`
`ii
`
`

`

`
`Exhibit 1001
`Exhibit 1002
`
`Exhibit 1003
`
`Exhibit 1004
`
`Exhibit 1005
`
`Exhibit 1006
`
`Exhibit 1007
`
`Exhibit 1008
`
`Exhibit 1009
`
`Exhibit 1010
`Exhibit 1011
`Exhibit 1012
`Exhibit 1013
`Exhibit 1014
`
` Covered Business Method Patent Review
`United States Patent No. 8,140,358
`
`
`EXHIBIT LIST
`
`United States Patent No. 8,140,358
`United States Patent No. 8,140,358 File His-
`tory
`Japan Patent Application H4-182868, filed on
`November 19, 1990, and published on June
`30, 1992 (“Kosaka”)
`Geostar, Understanding Radio Determination
`Satellite Service (Jane Pierce & Marilyn Finley
`ed.) (May 1989) (“RDSS”)
`
`Geostar Corp., Annual Report (Form 10-K)
`(Apr. 16, 1990) (“Geostar 10-K”)
`
`United States Patent No. 5,446,757, filed on
`June 14, 1993, and issued on August 29, 1995
`(“Chang”)
`United States Patent No. 5,210,854, filed on
`June 14, 1989, and issued on May 11, 1993
`(“Beaverton”)
`United States Patent No. 7,228,211, filed on
`March 26, 2004, and issued on June 5, 2007
`(“Lowrey”)
`“QUALCOMM’s MSM6500 Multimedia Sin-
`gle-Chip Solution Enables High-Performance
`Multimode Handsets Supporting CDMA2000
`1X, 1xEV-DO and GSM/GPRS,” PR
`Newswire, published November 12, 2002
`(“MSM6500 Press Release”)
`United States Patent No. 5,797,134
`United States Patent No. 6,064,970
`United States Patent No. 6,868,386
`United States Patent No. 8,090,598
`Declaration of Scott Andrews, dated No-
`vember 19, 2012
`
`iii
`
`

`

`Exhibit 1015
`
`Exhibit 1016
`
`Exhibit 1017
`
`Exhibit 1018
`
`Exhibit 1019
`
`Exhibit 1020
`Exhibit 1021
`Exhibit 1022
`
`Exhibit 1023
`
`Exhibit 1024
`
`Exhibit 1025
`
`Exhibit 1026
`
`Exhibit 1027
`
` Covered Business Method Patent Review
`United States Patent No. 8,140,358
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`
`Curriculum vitae of Scott Andrews and List
`of Matters
`OBD-II Background—Where’d It Come
`From?,
`http://www.OBDii.com/background.html
`(follow “Where’d it come from?” hyperlink)
`Excerpt from Shuji Mizutani, Car Electronics,
`page 250 (Nippondenso Co. Ltd. 1992)
`Excerpt from David S. Boehner, Automotive
`Microcontrollers, in Automotive Electronics
`Handbook, pages 11.24-11.29 (Ronald K.
`Jurgen ed., 1995)
`Robert D. Briskman, “Radio Determination
`Satellite Service,” Proceedings of the IEEE,
`Vol. 78, No. 7 (July 1990)
`Declaration of Amanda F. Wieker
`Declaration of Georginne Blundell
`United States Patent No. 5,465,079, filed on
`August 13, 1993, and issued on November 7,
`1995 (“Bouchard”)
`United States Patent No. 4,651,157, filed on
`May 7, 1985, and issued on March 17, 1987
`(“Gray”)
`United States Patent No. 5,438,312, filed on
`April 19, 1994 and issued on August 1, 1995
`(“Lewis”)
`United States Patent No. 5,243,530, filed on
`July 26, 1991, and issued on September 7,
`1993 (“Stanifer”)
`[Number assigned in PRPS to Power of At-
`torney]
`Rebuttal Declaration of Scott Andrews, dated
`August 16, 2013 (“Andrews Rebuttal Dec.”)
`
`iv
`
`

`

`Exhibit 1028
`
`Exhibit 1029
`
`Exhibit 1030
`
`Exhibit 1031
`
`Exhibit 1032
`
`Exhibit 1033
`
`Exhibit 1034
`
`Exhibit 1035
`
`Exhibit 1036
`
`Exhibit 1037
`
`Exhibit 1038
`
`Exhibit 1039
`
` Covered Business Method Patent Review
`United States Patent No. 8,140,358
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`
`J.P. Johnson, K. M. Rahman, & M. Ehsani,
`“Application of a Clustering Adaptive Fuzzy
`Logic Controller in a Brushless DC Drive,”
`IEEEIECON’ 97, New Orleans, LA, No-
`vember 1997
`Reza Langari & John Yen, Fuzzy Logic: Intel-
`ligence, Control, and Information (1999)
`Robert Bosch GmbH, CAN Specification
`Version 2.0 (1991)
`Rebuttal Declaration of Mary L. O’Neil, dat-
`ed August 16, 2013 (“O’Neil Rebuttal Dec.”)
`Curriculum vitae of Mary L. O’Neil and List
`of Matters
`Interpretative Opinion 4: Actuarial Principles
`and Practices (1982) of the American Acade-
`my of Actuaries
`Arnold F. Shapiro, An Overview of Insurance Us-
`es of Fuzzy Logic, in Paul P. Wang, et al., eds.,
`Computational Intelligence in Economics and Finance
`Volume II pp. 25-61 (Chapter One) (Springer
`Berlin Heidelberg, 2007).
`Luis A. Carreno, et al., A Fuzzy Expert System
`Approach to Insurance Risk Assessment Using
`FuzzyCLIPS, in WESCON Conference Record
`pp.536-541 (1993) (reference no. 13 from
`Shapiro Article at 58).
`Jean Lemaire, Fuzzy Insurance, ASTIN Bulletin
`International Actuarial Association Vol. 20,
`No. 1, pp.33-56 (1990).
`Richard A. Derrig, et al., Fuzzy Techniques of
`Pattern Recognition in Risk and Claim Classifica-
`tion, Journal of Risk and Insurance Vol. 62,
`No.3, Sept. 1995.
`Virginia R. Young, Adjusting Indicated Insurance
`Rates: Fuzzy Rules that Consider Both Experience
`and Auxiliary Data, in Proceedings of the Casualty
`Actuarial Society Casualty Actuarial Society - Ar-
`lington, Virginia, 1997, pp.734-765.
`Ex. 2020 in CBM2012-00002 (Supplemental
`Declaration of Michael J. Miller)
`
`v
`
`

`

`Exhibit 1040
`
` Covered Business Method Patent Review
`United States Patent No. 8,140,358
`
`
`Declaration of Jordan M. Rossen
`
`vi
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`

`

` Covered Business Method Patent Review
`United States Patent No. 8,140,358
`I. Relief Requested and Preliminary Statement
`
`Petitioner requests cancellation of all claims (1-20) of the ‘358 patent1 as un-
`
`patentable under 35 U.S.C. § 103 for the reasons in its Petition and below. In initiat-
`
`ing trial the Board correctly found that, unless rebutted by Progressive, the disclosures
`
`of Geostar’s “Understanding Radio Determination Satellite System” (“RDSS,”
`
`EX1004), the Geostar 10-K (“10-K,” EX1005), and Kosaka (EX1003)—combined
`
`with other references for specified dependent claims—invalidate every claim of the
`
`‘358 patent. RDSS (from 1989) and the 10-K (1990) disclose an interactive vehicle
`
`telematics system with position and speed determination, on-vehicle sensors, wireless
`
`data transmission to a central computer, and a database—a system useful for numer-
`
`ous purposes, including lowering vehicle insurance premiums. Kosaka discloses ana-
`
`lyzing monitored vehicle data and rating a driver’s performance to adjust vehicle in-
`
`surance premiums. Supplementing the analysis performed at RDSS’s central com-
`
`puters to include Kosaka’s insurance premium adjustment functions renders the ‘358
`
`claims obvious. Institution Decision (“ID.” Dkt. 10) 24, 25-26. The Board cor-
`
`
`1 EX1001. Except as noted, Exhibits are referenced “EX” or, for rebuttal exhibits,
`“RX”; abbreviations are defined in the Petition (“Pet.,” Dkt. 1); and all emphases are
`added. Petitioner does not undertake to address all of Progressive’s errors, but only its
`most egregious. Progressive identified no material facts under Rule 42.23(a), and its
`Opposition (“Opp.” Dkt. 33, at 6-7) does not separately dispute the unpatentability of
`dependent claims 2-20, but merely alleges merely alleges RDSS in view of 10-K and
`Kosaka fail to show limitations of independent claim 1. The Board should thus hold
`claims 2-20 unpatentable for at least the reasons in the Petition, which are unrebutted.
`As to other unchallenged aspects, Progressive similarly failed to rebut the Petition’s
`evidence and the Board’s determination. E.g., ID 18-19 (“Progressive has not shown
`that any of claims 1-20…are entitled to an effective filing date prior to…June 3,
`2008”); Opp. 12 (arguing moot; “Progressive does not address it in this Response”).
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` Covered Business Method Patent Review
`United States Patent No. 8,140,358
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`rectly found RDSS in view of the 10-K and Kosaka presents a fundamentally different
`
`ground of invalidity than previously raised, and invalidates the claims. ID 20-21.2
`
`II. The Geostar 10-K Confirms What a POSITA Would Understand From
`Reading RDSS: That RDSS is Useful for Insurance Purposes
`
`Progressive’s extended attempts to disqualify the 10-K—a public SEC filing—
`
`as prior art are an empty sideshow. Progressive claims this 1990 10-K, teaching that
`
`Geostar enables vehicle owners to “lower insurance premiums,”3 is not “in any way
`
`relevant…since it contains no disclosure that an insurance company using the GEOSTAR system
`
`could obtain monitored vehicle data relating to an insurable risk in order to calculate vehicle insurance
`
`rating factors or premiums.” Opp. 28. Progressive would essentially require the 10-K
`
`to disclose the entire purported invention of the ‘358 patent. This is not, of course, a re-
`
`quirement for obviousness. Nor is it the purpose for citing the 10-K, which, as Peti-
`
`tioner and the Board made clear, is to “reflect[] knowledge possessed by one with or-
`
`dinary skill in the art at the time of Progressive’s invention with regard to Geostar Corpo-
`
`ration’s GEOSTAR system” described in RDSS—itself clearly relevant to a POSITA, as
`
`it “discloses a vehicle telematics system that wirelessly transmits ‘position data, status
`
`
`2 Progressive purports now to object to the Board’s initiation of trial based on de-
`termining claim 1 qualifies for review under AIA§ 18, but it sought no rehearing and
`waived any objection to this non-appealable determination. 35 U.S.C. § 324(e); 37
`C.F.R. § 42.71(c). In any event, the Board’s determination was entirely proper. E.g.,
`AIA § 18(d) (“‘covered business method patent’’ means a patent that claims a method
`or corresponding apparatus…”); Final Rule, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012).
`3 Progressive apparently attaches significance to the 10-K’s mention of “commercial”
`vehicle fleets (Opp. 20; EX2013 ¶ 46), but offers no reason this would detract from
`the 10-K’s disclosure or distinguish it from the ‘358 claims.
`2
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` Covered Business Method Patent Review
`United States Patent No. 8,140,358
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`or alarms, and messages’ from a variety of vehicles to a central location for processing
`
`and management.” ID 23, 5; Pet. 20 & n. 11. Cf. Opp. 34 (relevant field is “insur-
`
`ance rating based on telematics data”). Despite Progressive’s baseless assertion, 10-Ks
`
`filed with the SEC are publicly available (indeed, the SEC certified this copy).4 15
`
`U.S.C. §§ 78m, 78o(d); 17 C.F.R. §§ 200.80, 200.80a; EX1005; ID 23 (“a public rec-
`
`ord”). This 10-K describes commercial uses for Geostar’s vehicle data acquisition
`
`system in multiple industries (including insurance) and is plainly analogous to the ‘358,
`
`which purports to concern “a system that acquires data related to evaluating risk.”5
`
`EX1001, 1:17-18; EX2020 ¶ 10. The Board can properly rely on such 10-K filings as
`
`evidence of a POSITA’s knowledge. See Eli Lilly and Co. v. Barr Laboratories, Inc., 251
`
`F.3d 955, 969-70 (Fed. Cir. 2001) (relying on 10-K—although filed with the SEC after
`
`the critical date—as evidence “to support the recognition” of a POSITA). That
`
`Progressive’s “expert” has not personally consulted 10-Ks is irrelevant, except to his
`
`own inability to testify about the knowledge of a POSITA, who is presumed to know
`
`
`4 Progressive also waived objections to the 10-K by failing to raise them. Rule 42.64.
`5 Progressive’s citations are wholly inapposite. See In re Clay, 966 F.2d 656, 659-60
`(Fed. Cir. 1992) (“extraction of crude petroleum” not in same field of endeavor as in-
`vention relating to “storage of refined liquid hydrocarbons”) (emph. orig.); Ex parte
`Dussaud, 7 U.S.P.Q.2d 1818, 1819 (B.P.A.I. 1988) (a POSITA “in the art of manufacturing
`disposable diapers” would not consider reference relating to “carpet manufacturing pro-
`cess and equipment” as “reasonably pertinent to the particular problem with which
`the appellants were involved”) (emph. orig.). Here, the 10-K describes a vehicle data
`acquisition system within the ‘358 patent’s field of endeavor (e.g., “acqui[sition] [of]
`data related to evaluating risk” (EX1001, 1:17-18)) and pertinent to the ‘358 patent’s
`problem (e.g., acquiring actual driver operating characteristics (EX1001, 1:20-30)).
`3
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`United States Patent No. 8,140,358
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`all relevant prior art.6 E.g., Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 454
`
`(Fed. Cir. 1985). The Board properly concluded that in light of the 10-K, as further
`
`confirmed by Mr. Andrews, a POSITA would know the Geostar system, which is
`
`used to collect and transmit vehicle data for processing at a remote server as disclosed
`
`in RDSS, was useful for insurance purposes, including to “lower[] premiums.” ID
`
`23; EX1014 ¶¶ 27-32.7 While it was “not necessary” to include the 10-K in formal
`
`combination with RDSS and Kosaka, the Board did so for “consistency.”8 ID 23.
`
`III.
`The Board Correctly Concluded It Would Be Obvious to Imple-
`ment Kosaka’s Insurance Risk Analysis at Geostar’s Central Facility
`
`Turning Petitioner’s actual arguments on their head, Progressive asserts Kosaka
`
`does not suggest using the Geostar system of RDSS, and argues non-insurance func-
`
`tions discussed in Kosaka would be compromised by integrating it with Geostar. In
`
`doing so, Progressive simply rehashes arguments that it would not be obvious to start
`
`with Kosaka and expand it with Geostar, despite the Board’s square rejection of Progres-
`
`6 While Mr. Zatkovich purports to opine about a POSITA’s understanding as of 1996
`and concedes such a person must have “as of January 1996 …at least one to two years of
`experience with telematics systems for vehicles…including communications and loca-
`tions technologies” (EX2020, ¶ 8), he had no such experience in 1996. Id. ¶¶ 4-5 (assert-
`ing telematics experience only with Utility Partners); EX2021 (CV) at 4 (this work be-
`gan in 1996). The Board should thus disregard his testimony. See F.R.E. 702.
`7 Progressive’s argument that the 10-K’s teachings of using Geostar’s transmitted ve-
`hicle data for insurance should be ignored because they include teachings of real-time “report-
`ing” of information for insurance claims from in-vehicle devices – i.e., “report[ing] accidents faster”—
`(Opp. 29; EX2013 ¶ 47) is nonsensical, and instead shows just the opposite.
`8 Progressive’s “object[ion] to this action of the Board” labeling the 10-K as part of a
`formal obviousness combination—supposedly on the basis that the 10-K was not part
`of the “basis, rationale, and reasoning put forth by the Petitioner” (Opp. 7n.4)—is en-
`tirely specious. See, e.g., Pet. 20 & n.11 (identifying basis, rationale, and reasoning).
`4
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`United States Patent No. 8,140,358
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`sive’s earlier attempt to misstate Petitioner’s positions this way. ID 24-25. Progres-
`
`sive’s arguments are again essentially directed to portions of an earlier CBM petition
`
`denied by the Board.9 What Liberty has actually argued—and what the Board con-
`
`cluded, on the Petition’s evidence—is that it would be obvious to augment RDSS’s
`
`Geostar system by placing insurance analysis functions taught by Kosaka at the central
`
`server to create a rating factor for insurance premiums. E.g., ID 24 (“risk evaluation
`
`components of Kosaka…would be implemented at a central station remote from the
`
`vehicle, and monitored vehicle data would be transmitted wirelessly to the central sta-
`
`tion for processing”), 25-26; EX1014 ¶ 38. Further, Progressive’s arguments about
`
`compromised sensor capabilities are incorrect and—as they relate to non-insurance
`
`objectives (e.g., driver alerts)—irrelevant. RX1027 (Andrews Reb. Decl.) ¶¶ 13-31.
`
`Progressive argues Kosaka’s function of “continually” determining insurance
`
`premiums would be “destroyed” because Geostar’s communications are not “contin-
`
`uous.” See Opp. 42-43. To begin with, this misreads Kosaka—which teaches risk
`
`evaluations can vary “hourly” or “daily,” and can be determined “subsequently”—and
`
`contradicts Progressive’s own witness, who says the “vehicle sensor signals in Kosaka
`
`do not change very rapidly.” EX1003, 4, 6, 9; EX1014 ¶ 37; EX2015 ¶ 37; RX1027 ¶ 16.
`
`Moreover, as Progressive recognizes, RDSS and the 10-K explicitly discuss using Ge-
`
`ostar to “perform real-time operations and maintenance” and “real-time nationwide mo-
`
`
`9 See also Opp. 36 (misdescribing different combination arguments in another trial).
`5
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`United States Patent No. 8,140,358
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`bile processing of insurance claims…” Opp. 20, 29. RDSS discloses, for example,
`
`that the Central facility transmits “interrogation” signals to in-vehicle terminals “many
`
`times per second” and receives “digital message traffic” in response, with the “entire
`
`transmission tak[ing] only 10 to 40 milliseconds.” EX1004, 12. Such “real-time”
`
`speeds are more than “feasible” for Kosaka’s risk evaluation and premium determina-
`
`tion analysis, as well as other functions. RX1027 ¶¶ 15-19, 21-23. Cf. Opp. 39, 41-
`
`42; EX2015 ¶¶ 46-47. And as Progressive recognizes, RDSS also discloses that the
`
`central facility “is able to command a user terminal to change response rates to better control
`
`traffic flow and priorities.” EX2015 ¶ 41; EX1004, 44, 12 (“users will access the network at
`
`different intervals based on need”). RDSS’s wireless communications would have been
`
`more than capable of handling such vehicle data traffic, as the system was designed to
`
`do (see RX1027 ¶ 15), and a POSITA could readily implement RDSS’s system to per-
`
`form Kosaka’s analysis. E.g., EX1014 ¶ 37-38; RX1027 ¶¶ 15-19, 24-31.
`
`Progressive and its witness similarly argue, without support, that the “quantity of
`
`data and the data rates from Kosaka’s Doppler radar unit would have exceeded the
`
`capacity of a wireless communication channel” or a vehicle bus. Opp. 43-45;
`
`EX2020 ¶¶ 21-22. But Kosaka’s teachings of sensors that could be employed with
`
`RDSS are by no means limited to Doppler radar: Kosaka discloses an embodiment
`
`with no Doppler radar, as well as the use of, e.g., “speed detector 38, the main engine ro-
`
`tation detector 43, and the control operation detection part 44,” and indeed “external”
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`and “internal” “sensors” generally. EX1003, 4, 7, 8 (“even if a pulse radar system is not
`
`used, it is possible to carry out risk evaluation”). And even as to Doppler radar,
`
`Kosaka teaches that before any risk analysis the Doppler unit’s output is processed at a
`
`“signal processing unit” to “obtain[] a speed signal and level signal [corresponding to
`
`the strength of the reflected wave],” and these processed values (not the Doppler unit’s
`
`signals) are “output to the risk evaluation unit” for analysis—thus, Kosaka does not
`
`require that the data directly created by the Doppler unit be sent to Kosaka’s risk
`
`evaluation unit at all, let alone transmitted in some particular, immediate fashion.
`
`EX1003, 6-7.10 RX1027 ¶¶ 25-28. Thus, in addition to Kosaka’s various other
`
`forms of data, a POSITA would have understood Kosaka to teach transmitting pro-
`
`cessed speed and level values from the Doppler unit for risk evaluation—something
`
`that could be done over a vehicle bus and RDSS’s wireless channel. Id. ¶¶ 25-28, 30.
`
`Indeed, a POSITA would know that these values could also have been further pro-
`
`cessed for transmission, easily meeting even lower data limits.11 Id. ¶ 28.
`
`Progressive also argues a POSITA would not have understood Kosaka to use a
`
`database in risk evaluation, again arguing it would have an “adverse effect” on Kosa-
`
`
`10 For that matter, vehicle bus technology by 1996 was more than capable of handling
`data from a Doppler radar. E.g., RX1027 ¶¶ 26, 29.
`11 Progressive also ignores RDSS’s disclosures of collecting and transmitting to the
`server “remote sensor status” and “data containing position” through a bus (e.g., “sen-
`sor port” or “serial port”). EX1004, 20, 46, 49-50; EX1014 ¶ 31. The RDSS/10-K
`and Kosaka references are not to be viewed in isolation, but as a combination. In re
`Merck, 800 F.2d at 1097; ID 25 (“The ground of unpatentability at issue is obvious-
`ness over multiple references, not individually over either RDSS or Kosaka”).
`7
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`ka’s “continuous, real-time risk evaluation and insurance premium determination.”
`
`Opp. 45. But Progressive ignores that the disclosed database at Geostar Central—and
`
`thus in a Geostar system augmented with Kosaka’s insurance analysis—has a database
`
`located at the remote server. Thus, any “operations requiring extensive processing,” such
`
`as the database operations Progressive would require, are carried out at the remote
`
`server, which specifically provides “storage facilities” and would not “adversely” af-
`
`fect operations at the vehicle. ID 24 (“[A]ll risk evaluation components of Kosa-
`
`ka…would be implemented at a central station remote from the vehicle.”); RX1027 ¶ 31.
`
`Progressive also argues certain of Kosaka’s non-insurance-related warning
`
`functions would be compromised by performing risk analysis at a central facility be-
`
`cause of asserted “delay” and unreliability. Opp. 41, 44; Ex. 2015, ¶¶ 45-47. First,
`
`warning a driver instantly and reliably were not stated business purposes in RDSS nor
`
`a requirement of Kosaka’s insurance-related objectives, so even if those additional
`
`functions taught in Kosaka were not added to RDSS, a POSITA would still have
`
`found it obvious to modify RDSS by expanding insurance analysis functions at Geo-
`
`star’s central computers to solve insurance problems, as disclosed in RDSS and Kosaka,
`
`and claimed by the ‘358 patent. E.g., EX1014 ¶ 38; RX1027 ¶¶ 20-21. Further,
`
`Kosaka makes clear its warning functions, which are separate from its insurance as-
`
`pects (e.g., EX1003, 7, 9, Figs. 1, 9), can include transmission to a person to be warned
`
`at a location remote from the processing (e.g., transmitting warning signals from a div-
`
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`ing watch to a buoy (EX1003, 4-6, Fig. 3)), and transmissions from remote locations
`
`to enable warnings to begin with (e.g., a gateway signal putting Kosaka’s system into an
`
`operational state (EX1003, 7)), without “destroying” the warning functionality. Moreover,
`
`sensor information stored in the vehicle before being transmitted for risk and insurance
`
`analysis (including results of sensors already found in RDSS (e.g., “engine overheat, oil
`
`low, door open, refrigeration temperature too high, and burglar alarms” (EX1004,
`
`50)), and Kosaka (e.g., “speed detector,” pre-processed vehicle data from Kosaka’s
`
`“signal processing unit” (Ex. 1003, 6))) could certainly be used to provide in-vehicle
`
`driver warnings apart from any remote risk and insurance determination—indeed, as
`
`Dr. Ehsani acknowledges, the Geostar system already provided remote warnings (“emer-
`
`gency services”). EX2015 ¶ 36; EX1004, 19, 42, 46; RX1027 ¶¶ 21-23.
`
`Contrary to Progressive’s assertions, in order to take advantage of the “exten-
`
`sive processing” and “superior computing power” (EX 2020 ¶ 18) capabilities of Ge-
`
`ostar’s already existing central computing facility, and to minimize the sophistication
`
`and cost required of the in-vehicle components using Geostar’s already existing wireless
`
`transmission network, when implementing Kosaka’s teachings of using monitored ve-
`
`hicle data for insurance premium adjustment, a POSITA would have found strong
`
`economic and engineering incentives to expand the analysis functions at Geostar’s cen-
`
`tral computers with Kosaka’s analysis functions. E.g., RX1027 ¶¶ 10-12; cf. Opp. 40,
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`42; EX2015 ¶¶ 31-39. While Progressive argues placing Kosaka’s “risk evaluation
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`and insurance premium components” at a “remote location” would require adding a
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`wireless transmitter, increasing sophistication and cost (Opp. 40), the in-vehicle Geo-
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`star units already had transmitters (which offered multiple other productive, non-
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`insurance uses (e.g., EX1005, 9-11)) and could easily be connected to desired further
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`sensors (just like the sensors RDSS already disclosed),12 eliminating much of the anal-
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`ysis that would have been required in each vehicle if Kosaka were implemented in isola-
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`tion. RX1027 ¶¶ 11-12. The incremental cost of performing some of the features
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`taught by Kosaka using Geostar’s existing in-vehicle units and existing central comput-
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`ers would certainly have been a less expensive “piggy backing” on the prior art Geo-
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`star telematics system than the full cost of implementing Kosaka as a stand-alone sys-
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`tem. Id., ¶¶ 10-12. While Progressive persists in discussing Kosaka and RDSS in
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`isolation rather than as a combination (see Merck, 800 F.2d at 1097; ID 25), Progressive
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`itself acknowledges that the “cost and complexity” it complains of would actually be avoided
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`if one were to start with the Geostar system taught in RDSS: “no such additional cost
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`would have to be added for the GEOSTAR system because it was a communication system that re-
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`quired a wireless transmitter in order to function as intended.” Opp. 40-41.
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`Progressive’s attempt to trivialize Kosaka’s analysis functions as not requiring
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`“extensive processing capability”— all to argue there would be no benefit in perform-
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`12 Mr. Zatkovich’s argument, from a single example, that RDSS’s terminals “transmit
`only an on/off status” from sensors (EX2020 ¶ 14) is wrong and confirms his careless
`reading: RDSS’s user terminals transmit, e.g., location data collected from sensors such
`as LORAN-C and GPS receivers. E.g., EX1004, 16-17; EX1014 ¶ 31; RX1027 ¶ 11.
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`ing them at a central computer—is also unavailing and ignores Kosaka’s own teach-
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`ings. E.g., Opp. 40; EX2015 ¶ 34; RX1027 ¶¶ 10-12. Progressive’s Dr. Ehsani
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`opines no “extensive processing” is necessary in Kosaka, and thus a POSITA would
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`not employ its teachings with the pre-existing Geostar system, which includes wireless
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`transmission of vehicle data to a central server.13 E.g., EX2015 ¶¶ 31-39. But Pro-
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`gressive entirely ignores, for example, that Kosaka teaches transmission to remote location
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`for aspects of its insurance premium adjustment system (including versions employing
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`fuzzy logic), such as implementations in which “an electronic currency transfer re-
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`quest [is] produced and transmitted.” EX1003, 6. Kosaka also teaches the use of a
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`pre-stored data collection in implementing its fuzzy logic analysis (id. 4 (“fuzzy
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`memory 4 stores risk evaluation values determined when fuzzy logic has been carried
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`out in advance offline”)), and—contrary to Progressive’s suggestion a POSITA would
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`find it more costly to implement Kosaka’s analysis at a central server—a POSITA
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`would recognize that this pre-stored data, as well as the rules for Kosaka’s fuzzy
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`membership functions (see EX2015 ¶¶ 20-24), could advantageously be maintained
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`and updated centrally and applied uniformly across multiple vehicles by adding Kosa-
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`ka’s insurance functions to Geostar, providing added efficiencies. RX1027 ¶¶ 10-12.
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`13 Dr. Ehsani concedes a POSITA must have “at least one to two years of experience
`with telematics systems for vehicles, particularly, telematics systems including communi-
`cations and locations technologies” (EX2015, ¶ 19), but he does not. See id. ¶ 11 (re-
`flecting no experience with wireless transmission of vehicle data, but instead asserting
`experience only with data “acquisition” and “processing”); EX2016 (CV); RX1027
`¶ 14. The Board should thus disregard his testimony. See F.R.E. 702.
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`Mr. Zatkovich further argues a POSITA would not necessarily design a “system
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`to take advantage of the superior computing power available at the Central Facility.”
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`EX2020 ¶ 18; Opp. 38. In effect, Mr. Zatkovich argues a designer of an insurance
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`premium determination system using monitored vehicle data, starting with a blank
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`piece of paper, would not design the Geostar system. But this ignores that the Geo-
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`star telematics system with wireless transmission of monitored vehicle data was in exist-
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`ence, and was designed to serve multiple markets (including insurance) and multiple
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`business objectives. EX1005, 9-11. Given this existing prior art Geostar design
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`with networked communication to a central processing facility, it would have been
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`obvious for a POSITA to employ Kosaka’s insurance premium adjustment teachings
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`in the pre-existing Geostar system and, in doing so, to locate Kosaka’s analysis functions at
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`Geostar’s existing centrally-located computers. EX1014 ¶ 28. Indeed, merely that
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`certain processing could be performed on-board does not mean a POSITA would ig-
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`nore the possibility of “tak[ing] advantage of the superior computing power available at the
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`Central Facility” since it—and the wirelewss transmission capability to send data there from the
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`vehicles—already existed: additional cost and complexity would not “be added for the
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`GEOSTAR system because it was [already] a communication system that required a
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`wireless transmitter in order to function as intended.” Opp. 40-41.
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`IV.
`RDSS and the 10-K in view of Kosaka Disclose or Render Obvious
`the “Rating Factor” Limitation
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`Progressive’s attempts to denigrate Kosaka’s “risk evaluation value”—used for
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`“insurance premium determination”—as not being a “rating factor” (as used in ‘358)
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`defies the Board’s construction and common sense. RX1031 (O’Neil Reb. Decl.) ¶¶
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`50-57. Kosaka’s “risk evaluation value” surely satisfies the Board’s definition: it is a
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`“calculated insurance risk value” based on an “evaluation of states that contribute to
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`risk” (EX1003, 3-4); it also “reflects an associated level of insurance risk and, there-
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`fore, also a corresponding insurance premium” because it is, e.g., “matched” to “em-
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`pirical evaluation of an individual using fuzzy logic” (id.) and is used to “determine in-
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`surance premiums corresponding to a risk evaluation value.” Id.; RX1031 ¶ 57. Progres-
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`sive and Mr. Miller add numerous deliberate, unsupported limitations to the Board’s
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`construction of “rating factor,” including requirements to use “actuarial classes” and
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`determine “expected claims losses.” See Opp. 12, 46-48; EX2013 ¶¶ 42-43, 16-22.
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`For example, Progressive argues that a POSITA would understand “rating factors are
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`used to determine expected claims losses (or, relatedly, premiums).” Opp. 47. Either
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`Progressive is equating “expected claims losses” with “premiums,” in which case
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`Kosaka clearly discloses this (see EX1003, 3-4), or Progres