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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`—————————————
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`LIBERTY MUTUAL INSURANCE CO.
`Petitioner
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`v.
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`PROGRESSIVE CASUALTY INSURANCE CO.
`Patent Owner
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`—————————————
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`Case CBM2013-00009
`Patent 8,140,358
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`—————————————
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`PATENT OWNER’S OBSERVATIONS ON
`TESTIMONY OF MARY L. O’NEIL
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`CLI-2146520v1
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`The Patent Owner, Progressive Casualty Ins. Co., has the following
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`Case CBM2013-00009
`Patent 8,140,358
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`observations on the September 13, 2013 cross-examination testimony of the
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`Petitioner’s reply declarant, Mary L. O’Neil:
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`1.
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`In Ex. 2028, p. 7, lines 10-18, and p. 9, lines 5-14, Ms. O’Neil
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`testified that all of her actuarial work has always been consistent with the
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`Statement of Principles (Ex. 2012 in CBM2012-00002) identified by Progressive’s
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`expert as being principles that actuaries adhere to:
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`Q. And in fact, in the past has some of your actuarial work
`been conducted in a way that’s consistent with the statement of
`principles set forth in this document?
`MR. MYERS: Objection. 402, 403.
`A.
`I believe all of my actuarial work has always been
`consistent with all of the standards of practice, which includes the
`statements of principles.
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`* * *
`Q. And what you did was help to develop an actuarial class
`system using driving record points; is that right?
`A.
`Correct.
`Q. And when you did that, was your work consistent with
`the risk classification statement of principles that’s Progressive’s
`Exhibit 2012?
`MR. MYERS: Objection. 402, 403.
`A. Yes. As I said, my work has always been consistent with
`the statement of principles.
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`CLI-2146520v1
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`This testimony is relevant because it shows that Liberty’s argument (Reply at 13:8-
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`Case CBM2013-00009
`Patent 8,140,358
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`14:3) and Ms. O’Neil’s testimony in her Reply Declaration (Ex. 1031 at ¶¶ 16-19)
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`– disputing the testimony of Progressive’s expert Mr. Miller that a POSITA would
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`adhere to the Statement of Principles – is semantic, not substantive.
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`2.
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`In Ex. 2028, p. 17, line 21 to p. 18, line 6, and p. 20, line 23 to p. 21,
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`line 4, Ms. O’Neil testified that no actuarial principles or practices are in conflict
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`with the Statement of Principles:
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`Q. Are there any other generally accepted actuarial
`principles and practices that are in conflict with the ones that are set
`forth in Exhibit 2012?
`MR. MYERS: Objection. 402, 403.
`A.
`I guess I don’t understand that question, because if
`they’re in conflict with it, they can’t be part of the generally accepted
`principles and practices. I would think the body of it is fairly
`cohesive.
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`* * *
`Q. Are there other standards of practice that are in conflict
`with the statement of principles in Exhibit 2012?
`MR. MYERS: Objection. 402, 403.
`A.
`This is the only standard of practice that deals with
`classifications.
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`This testimony is relevant because it is inconsistent with Ms. O’Neil’s criticism in
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`her Reply Declaration (Ex. 1031 at ¶¶ 16-19) of Progressive’s expert Mr. Miller
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`CLI-2146520v1
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`and his testimony concerning the relevance of the Statement of Principles to
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`Case CBM2013-00009
`Patent 8,140,358
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`actuarial classification systems. It also refutes the same argument in Liberty’s
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`Reply (at 13:8-14:3).
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`3.
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`In Ex. 2028, p. 32, line 16 to p. 33, line 8, Ms. O’Neil admitted that
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`Progressive’s expert did account for using information or data other than actual
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`historical claims data to generate an actuarial classification system:
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`Q. Okay. And there Mr. Miller indicates that other
`considerations can be taken into account, including the experience of
`other rate filers, business judgment, and all other relevant information
`and data within and outside the state.
`Do you see that?
`A. Yes, I see that he wrote that there. Nonetheless, he didn’t
`allow for that in these other places.
`Q.
`So you don’t read his entire declaration as being
`consistent with his opinions here?
`A.
`This statement is in a particular section of the
`declaration. The other -- I assume that this definition that we just read
`in 16 was meant to stand alone.
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`This testimony is relevant because it shows that Liberty’s Reply (at, e.g., 13:8-14)
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`and Ms. O’Neil’s Reply Declaration (e.g., Ex. 1031 at ¶ 19) mischaracterized the
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`testimony of Progressive’s expert Mr. Miller as requiring the use of historical
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`claims data, since Ms. O’Neil had to admit on cross-examination that he took into
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`account that other considerations could be used.
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`CLI-2146520v1
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`Case CBM2013-00009
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`4.
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`In Ex. 2028, p. 50, line 20 to p. 51, line 6, Ms. O’Neil testified:
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`Q. Do you believe you were a person of ordinary skill in
`1996?
`A. Yes, I do believe so.
`Q. And is it correct that as of 1996, you had no experience
`applying or using fuzzy logic in determining insurance premiums?
`A. Not every actuary has experience in every aspect and
`every possible application, and therefore personally I had not applied
`fuzzy logic. But that doesn’t mean a POSITA at the time might not
`have.
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`This testimony is inconsistent with Liberty’s Reply (at 14:8-10) and Ms. O’Neil’s
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`reply testimony (Ex. 1031 at ¶¶ 35, 39) suggesting that Progressive’s expert Mr.
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`Miller was incorrect to say that the POSITA as of 1996 would have had no
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`experience in using or applying fuzzy logic to determine insurance premiums.
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`5.
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`In Ex. 2028, p. 67, line 23 to p. 68, line 9, Ms. O’Neil testified:
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`The POSITA would read Kosaka. The POSITA would, if
`they’re familiar with fuzzy logic and they wished to use that, continue
`reading Kosaka. If they don’t wish to use it, they would follow along
`under Kosaka’s guidance that it’s not necessary. If they’re not totally
`familiar with fuzzy logic, they would do their own research and
`education on that in order to apply it and go forward.
`So these five articles are not what is relevant.
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`CLI-2146520v1
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`This testimony is relevant because it shows that the POSITA lacking experience
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`Case CBM2013-00009
`Patent 8,140,358
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`with fuzzy logic would need to combine Kosaka with other references (“do their
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`own research and education”) for the fuzzy logic embodiment. It shows that
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`Liberty, in its Reply (at 14-15) is actually arguing a new alleged ground of
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`unpatentability.
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`6.
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`In Ex. 2028, p. 80, line 18 to p. 85, line 9, Ms. O’Neil testified:
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`Is risk evaluation value what is coming out of fuzzy logic
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`Q.
`unit 3?
`A. Again, in my declaration, I don’t specify what box it’s
`coming out of. I specify the final risk evaluation value that Kosaka
`produces.
`Q. Well, can you point out where that is?
`A.
`The final value? In the diagram?
`Q. Yeah.
`A. Again, I didn’t utilize the diagram in my testimony. I
`utilized the language of the patent, which said risk evaluation values,
`what they were, how they were used, so on. I didn’t look at the boxes
`for, oh, this box is fuzzy, this box is not, that box. I didn’t look at that
`and testify to that in my declaration.
`Q. Does that mean you can’t answer my question?
`A. Well, I guess what I -- My problem is that I probably
`could, I suppose, but I haven’t had any opportunity to study how all
`this stuff relates to the boxes because I didn’t see that the boxes were
`relevant to my testimony.
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`Patent 8,140,358
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`Q. Did you look at any of the figures in rendering your
`testimony in your rebuttal declaration?
`A.
`I did look at the figures.
`Q. Did you study them?
`A.
`I did not match the figures up to each part of the patent
`and determine exactly what they meant.
`Q.
`So let me ask you to look at Figure 11. Are you there?
`A. Yes.
`Q. Okay. In particular, Figure 11C.
`A. Yes.
`Q. You understand that Figure 11C shows that the outputs of
`fuzzy logic unit 3 are fuzzy values rather than a single numerical
`value?
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`* * *
`A. Again, I am not an expert in fuzzy logic. These are
`membership functions. And this appears to be what is done in box 3.
`I do note that Kosaka talks about defuzzification. It may be that that’s
`needed to happen at this stage.
`I really -- I really never matched up the steps. I was looking at
`the end result in this paper.
`Q.
`So let me ask you to look at Figure 10. Do you have
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`that?
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`A. Yes.
`Q. Have you studied that one before?
`A.
`I haven’t studied any of the figures for the details as it
`relates to the exact specifications of the patent.
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`CLI-2146520v1
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`Case CBM2013-00009
`Patent 8,140,358
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`* * *
`Q. And you understand that that shows that the risk
`evaluation value for comprehensive determination output from fuzzy
`logic unit 3 are fuzzy values?
`A. Again, that may be -- what you’re saying may be true.
`Nonetheless, Kosaka speaks of defuzzification, so it may not be at this
`particular step where that was done, but it was done. And beyond
`that, the risk evaluation values could be obtained not using fuzzy
`logic, so it doesn’t matter if they’re fuzzy or not fuzzy or when they’re
`fuzzy. If I don’t use fuzzy logic at all, they’re never going to be
`fuzzy. So I’m not sure what the relevance is to where it’s fuzzy and
`where it’s not fuzzy.
`Q.
`It’s your opinion it doesn’t matter whether the output is --
`of fuzzy logic unit 3 is fuzzy or not?
`A. My opinion is that in the end, risk evaluation value has
`been defuzzified and has been applied to determine a revised
`premium. And that value that was utilized, the risk evaluation value,
`could have been derived not using fuzzy logic.
`Q. Well, you’ve used this term “defuzzified.”
`A. Yes.
`Q. What is your understanding of that?
`A. Once again, I’m not an expert at fuzzy logic, but my
`understanding is that it is taking the fuzzy output and bringing it back
`to crisp output.
`Q. And it’s your opinion that that’s done with the output
`from fuzzy logic unit 3; is that right?
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`CLI-2146520v1
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`Case CBM2013-00009
`Patent 8,140,358
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`I didn’t say that. I don’t know exactly where it’s done.
`A.
`Once again, as I said, I did not study the exact sequence of application
`of fuzzy logic. I didn’t need to know that. I needed to know the
`results, because this procedure could be applied whether I use fuzzy
`logic or whether I do not use fuzzy logic.
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`This testimony is relevant because it shows that Ms. O’Neil has no basis or
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`competence for her testimony (Ex. 1031 at ¶ 48) that the ultimate risk evaluation
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`values of Kosaka are non-fuzzy, crisp values.
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`7.
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`In Ex. 2028, p. 102, line 16 to p. 103, line 12, Ms. O’Neil testified:
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`Q. A new exhibit. So I’ll hand you an exhibit that’s been
`premarked in -- and it has three numbers because it applies in three of
`the CBMs that we are here talking about today. So CBM2012-3,
`Progressive Exhibit 2014; CBM2013-4, Progressive Exhibit 2018;
`CBM2013-9, Progressive Exhibit 2027.
`(Progressive Exhibit 2014, 2018, 2027, [a single document]
`having been marked for identification, is attached hereto.)
`Q. Ms. O’Neil, do you recognize that document?
`A. Yes. This is -- The cover is, I guess, the copy of a cover
`of a book, and you have attached to that a chapter in that book that I
`contributed. The book was a compendium of chapters written by
`different people.
`Q.
`So you wrote Chapter 3 of this book “Dealing with
`Automobile Insurance in North America”?
`A.
`Correct.
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`This testimony is relevant because it authenticates a book chapter authored by
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`Case CBM2013-00009
`Patent 8,140,358
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`Ms. O’Neil that is consistent with Progressive’s expert Mr. Miller’s testimony
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`regarding the term “rating factor” used in the claims of U.S. Patent No. 8,140,358.
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`This book chapter also refutes Ms. O’Neil’s argument that Mr. Miller’s
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`interpretation of “rating factor” is incorrect (Reply Decl., Ex. 1031 at ¶¶ 50-54).
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`By:
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`Respectfully submitted,
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`JONES DAY
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`/Calvin P. Griffith/
`Calvin P. Griffith
`Registration No. 34,831
`JONES DAY
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`(216) 586-3939
`(216) 579-0212 (Fax)
`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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`September 30, 2013
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`CLI-2146520v1
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`9
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing PATENT OWNER’S
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`OBSERVATIONS ON TESTIMONY OF MARY L. O’NEIL were served on
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`September 30, 2013 by causing them to be sent by email to counsel for the
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`Petitioner at the following email addresses:
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`Steven.baughman@ropesgray.com
`Nicole.jantzi@ropesgray.com
`James.myers@ropesgray.com
`LibertyMutualPTABService@ropesgray.com
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`
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`/s/ John V. Biernacki
`John V. Biernacki
`Registration No. 40,511
`JONES DAY
`North Point
`901 Lakeside Avenue
`Cleveland, Ohio 44114-1190
`Attorney For Patent Owner
`Progressive Casualty Insurance Co.
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