Liberty Mutual Exhibit 1047
`Liberty Mutual v. Progressive
`CBM2013-00009
`Page 00001
`
`

`

`wflmLfl-b-UJNH
`
`M. O'NEIL
`
`M. O'NEIL
`
`Page 6
`
`Page 7
`
`introduced by Mr. Miller.
`Q. Were you familiar with this document
`before it was offered by Progressive in its
`response to the Liberty Mutual petition?
`A. Yes.
`I've been familiar with this
`
`the -— you know, I guess there are 50 standards
`of practice and several statements of principle,
`daily.
`I mean, it's on an as-needed basis. You
`
`go back to the document whenever you might want
`to use it.
`
`I
`document since its initial publication.
`believe it was back in the 19805, maybe 1982 or
`semewhere in that range.
`Q.
`So it's a document you're well
`acquainted with; is that right?
`A.
`It‘s not something --
`MR. MYERS: Objection. 402,403.
`I'm familiar with the document as any
`A.
`other professional actuary might be.
`Q.
`It's not a document that would be
`obscured to actuaries practicing in their field;
`is that right?
`MR. MYERS: Objection. Federal Rule
`of Evidence 402, 403.
`I'm going to give the
`rule number as we go forward, but I'm
`principles attached to the standards of practice.
`referring to the Federal Rules of Evidence.
`This is one ofthem. Sol included everything.
`A.
`I'm not sure what you meant by
`"obscure." We don't -- at least I as a
`Q. Okay. Let me now hand you another
`
`exhibit, Liberty Mutual Exhibit 1022 in case
`professional don't sit and look through all of
`
`Q. And in fact, you've used this document
`in your actuarial work in the past?
`A. Yes, I have used it in the past.
`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.
`I believe all of my actuarial work has
`A.
`always been consistent with all of the standards
`of practice, which includes the statements of
`principles.
`Q. And by that, you mean this statement
`ofprinciples that is Progressive's Exhibit 2012?
`A. Well, there are several statements of
`
`
`
`ram...“
`
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`M. O'NEIL
`CBM2012-2.
`
`(Liberty Mutual Exhibit 1022, having
`been marked for identification, is attached
`hereto.)
`Q. Can you identify that document,
`Ms. O'Neil?
`
`A. Do you wish for me to read the entire
`de5cription on the cover?
`Q.
`lfthat's how you would like to
`identify it.
`Let me ask a different question.
`this your rebuttal declaration in the
`CBM2012-2 case?
`A. That is correct. That is what the
`
`Is
`
`identifying caption says.
`Q. And you recognize it as such, correct?
`A. Yes.
`
`Q. Okay. Now, I would ask you to turn to
`Paragraph 46. Are you there?
`A. Yes.
`
`Q. Okay. In this paragraph you're
`previding testimony about helping to deveiop an
`actuarial class system in New Jersey, correct?
`MR. MYERS: Ob'ection. 402 403.
`
`M. O'NEIL
`
`A. This paragraph mentions something I
`did as a consultant to the New Jersey Market
`TransitiOn Facility.
`Q. And what you did was help to deveIOp
`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 principies.
`Q.
`So in your experience, you have always
`adhered to this statement of principles whenever
`y0u have provided your professional services as
`an actuary?
`MR. MYERS: Objection.
`Is that right?
`MR. MYERS: Objection. 402, 403.
`I wouldn't use that terminology, that
`A.
`terminology of "adhered." As I‘ve explained
`other places in my declaratiOn, these statements
`of urinei les and the standards of uractice are
`
`Q.
`
`TSG Reporting - Worldwide
`
`877—702-9580
`
`3
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`(Pages 6 to 9}
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`Page 00002
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`Page 00002
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`

`

`M. O'NEIL
`
`M. O'NEIL
`
`Page 10
`
`Page 11
`
`However, I do believe I also quoted
`somewhere that it even says that the professional
`judgment ofthe actuary in the end is the most
`important factor. But nonetheless, these are all
`to be treated as considerations and guidelines,
`not rules that must be strictly followed. So the
`word "adhere" sort of brings that to mind.
`Q. Have you ever intentionally deviated
`from any of the principles set forth in the
`statement of principles that's Exhibit 2012?
`MR. MYERS: Objection. 402, 403.
`I guess I wasn't clear perhaps in my
`A.
`last answer. These are guidelines. So all of
`the standards of practices are guidelines. In
`addition to these guidelines, there's a body of
`literature to guide actuaries, professional
`experience. There is literature that's published
`outside of the actuarial profession. There are
`statement of principles set forth certain
`many sources of information.
`statistical considerations to be considered,
`
`So when I would perhaps be working on
`including homogeneity, credibilitygand
`Page 12 !
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`something, I would be aware of all ofthose
`things. Now, if it turns out for some reason 1
`may not have appropriate data or the problem, if
`it doesn't fit with semething here, I was
`certainly aware of this, and to the extent
`possible w0uld certainly consider it. But if
`something that I might need to do differs from
`this, there could be a situation where there is a
`
`law or regulation, something like this, I will do
`what I believe is the best job and then document
`what I have done.
`
`Q. That was a pretty long answer. I'm
`trying to ask a really simple question.
`Can you tell me whether you've ever
`departed or deviated from the statement of
`principles that‘s set forth in Exhibit 2012?
`MR. MYERS: Objection. 402, 403.
`I guess I wouldn't call it deviated.
`A.
`I would call it I've documented my work and
`considered these as required in all instances.
`Q. You're aware, Ms. O'Neil, that this
`
`M. O'NEIL
`
`MR. MYERS: Objection. 402,403.
`A. The data which I used were the only
`data available. And so I‘m not sure how to
`
`answer the question homogeneous in this case. A
`lot has been made ofthe term homogeneous, and I
`guess I'm not sure what further to say about that
`regarding this particular situation. The goal of
`that particular analysis was to generate revenue
`based on driving record points which related to
`mmmmmm&msTMMMRWflHMpmm
`that would be on someone's DMV record.
`
`The state would operate the plan, the
`state would collect the money, and the state
`would remit the money over to the New Jersey
`Market Transition Facility, which was the
`residual market mechanism in New Jersey. The
`rates being charged by the New Jersey MTF which
`I'll call it were inadequate for the losses that
`that organization or entity was incurring.
`So to supplement that organization,
`someone, I'm not sure who, decided this was one
`
`way to get revenue under the political theory
`that let the bad drivers pay, which means anybody
`who, in that definition, was someone who had
`
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`guidelines for actuaries in their professional
`practice. To the extent that someone might
`deviate from them for some reason or other, that
`is to be documented.
`
`Q.
`
`M. O'NEIL
`predictive stability?
`MR. MYERS: Objection.
`Is that correct?
`MR. MYERS: Objection. 402, 403.
`I believe you're referring to Section
`A.
`4(d), subparts l, 2, and 3, where it lists those
`items you just mentioned, homogeneity,
`credibility and predictive stability.
`Q. And based on your past work, you‘re
`familiar with those considerations; am I right?
`A. That is correct, I am familiar with
`these.
`
`I'll ask you to go back to your
`Q.
`statements in Paragraph 46 of your rebuttal
`declaration. Did you consider those statistical
`considerations in the work you did to help
`develop an actuarial class system using driving
`record points in New Jersey?
`A. Of course I considered them. And then
`
`once I considered those, then I looked at what
`there was available to work with, and those are
`the data that were used to put forth this plan.
`Q.
`In your opinion, was the data you used
`homo eneous?
`
` 4
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`TSG Reporting - Worldwide
`
`877—702—9580
`
`Page 00003
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`(Pages 10 to 13)
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`Page 00003
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`

`

`M. O'NEIL
`
`Page 19
`M. O'NEIL
`
`I guess I don't understand that
`A.
`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.
`Q.
`I would think so too.
`
`So all the other sources of generally
`accepted actuarial principles and practices, to
`the extent they relate to this same subject
`matter as Exhibit 2012, would be consistent with
`it; is that correct?
`
`MR. MYERS: Objection. 402, 403.
`I don't know ifl would put it exactly
`A.
`that way. Part of the thing about actuarial
`science is that it's not an exact science.
`
`Everything that has been written in various
`papers, including this, has been written by
`people. And it's not like mathematics where two
`times two is four. This is in the bestjudgment
`of the people who wrote it at the time.
`The same thing with various papers in
`the literature.
`I would assume that a
`
`
`
`the same definition for homogeneity. It doesn't
`make it wrong; it makes it different. So I would
`think that if we did some research, we would find
`other criteria that people have put forward
`related to classifications, not making any one of
`them more wrong or right, it becomes part of the
`total body of knowledge of an actuary.
`So I really can't -- I can't really
`agree to what you're saying, that every document
`we look at is going to have the same thing in it.
`I don't think so.
`
`In fact, hasn't this statement of
`Q.
`principles in Exhibit 21 12 -- or excuse me, 2012
`
`been widely accepted by actuaries practicing in
`the field?
`
`MR. MYERS: Objection. 402,403.
`I really wouldn't know what "widely
`A.
`accepted" means.
`I know that it's part of the
`standard of practice 12, which is part ofthe
`entire set of standards of practice.
`I‘m not
`sure what the total number is at this time.
`
`Nevertheless, there are other papers and so on
`that have been written related to
`
`statistician or even another actuary may not
`necessarily, without this in front ofthem, write
`classifications, related to statistical analys_e_s
`
`
`
`Page 20
`
`
`M. O'NEIL
`M. O'NEIL
`
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`of classifications and so on which might expand
`upon the concepts as they relate to
`classificati0n. This is more simplistic than a
`lot of things one might read on the subject.
`Q. Are you aware of any other guidelines
`that conflict with the Exhibit 2012 statement of
`
`principles?
`
`MR. MYERS: Objection. 402, 403.
`A. These are the only guidelines per se
`
`in terms of something that's been set forth as
`part of the standards of practice. The rest of
`
`the body of generally accepted principles and
`
`practices would come from professional writings,
`
`publications, the body of actuarial literature.
`
`That's what I'm referring to that would expand
`
`upon this and actually be more technical than
`
`this. You would find that in other writings,
`
`which would become part of generally accepted
`
`actuarial principles and practices as opposed to
`
`something that is actually part of the standards
`
`of practice.
`
`Q. Are there other standards of practice
`
`that are in conflict with the statement of
`
`rinci [es in Exhibit 2012?
`
`
`MR. MYERS: Objection. 402, 403.
`A. This is the only standard of practice
`that deals with classifications.
`
`In your opinion, has this
`Q. Okay.
`statement of principles been relied upon by
`actuaries on matters that it's germane to?
`MR. MYERS: Objection. 402, 403.
`A. This sounds like the same question you
`asked me before, onIy instead of "adhered" you've
`now said "relied upon." My answer is the same.
`It‘s been considered as appropriate along with
`the rest of the body of actuarial literature.
`Q. Have you ever publicly criticized any
`of these statement of principles?
`I may
`A.
`I do not recall having done so.
`have objected to someone perhaps stating that
`something should be adhered to or something is
`set in stone type of rule. But i don't recall
`necessarily criticizing.
`I don't recall doing
`that. Anything is possible, I suppose.
`Q. Let me refer you to Paragraph 7 of
`your rebuttal declaration, Exhibit 1022. Feel
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`free to refresh your memory by looking at that
`u-arrauh, or the surroundin ara rahs if ou
`
`
`
`
`
`
`
`TSG Reporting — Worldwide
`
`6
`877—702—9580
`
`(Pages 18 to 21)
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`Page00004
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`Page 30
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`Page 31
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`maimU'I-JBWNI—J
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`M. O'NEII.
`
`In fact, he says actuarial class
`claims data.
`claims data, correct? Which could include other
`
`types of claims data besides actual claims data,
`correct?
`
`A. No. He says expected insurance claims
`loss, which is actual claims data.
`It doesn't
`
`say actuarial.
`Q.
`So all expected claims loss data has
`to be actual? It can't be estimated?
`
`A. Even ifit is estimated, it's still --
`
`you're mistaking the word "actual" meaning of a
`company as opposed to from some other source.
`Q. What did you mean by "actual"?
`A.
`I meant ofa cempany as opposed to
`some other source.
`
`Q. You meant their own actual historical
`
`experience; is that right?
`A. Correct.
`I meant the company's own
`experience as opposed to some other data from
`some other source.
`
`Q. But you don't find that in
`Paragraph 16, do you?
`A.
`I believe I do.
`
`Q. Expected claims loss could be
`
`mummwal—I
`
`M. O'N EIL
`estimated as well as taken from actual historical
`
`results. Am I right?
`A.
`Indeed, I'm not disagreeing with you.
`I‘m saying that expected claims loss still would
`need to be based on the company's own data based
`on what Mr. Miller has said here, is what I'm
`
`saying. I'm saying in my thing that Mr. Miller
`has not allowed for the fact that data could be
`from some other outside source.
`
`Q. Nonetheless, he does not say "actual
`claims data" in that paragraph?
`A. He does not use that exact word. That
`is -- That is what I read whenever I read his
`
`testimony. He said expected insurance claims
`loss. That implies or basically is a statement
`that you would use the company's own expected
`insurance claims loss. Expected is estimated,
`basically.
`So when I say "actual" here, it refers
`to within the company as Opposed to from some
`other source, which is what this paragraph talks
`about, is that you can use data from other
`sources, you could use industry data, you could
`
`_ use_c_lata from another company if it were
`
`Page 33
`
`
`
`M. O'NEIL
`available. You couid use data from —- there are
`
`other collection places that you can get data
`from. And that's what's not mentioned here.
`
`Q. Mr. Miller doesn't say that you have
`to use data from a particular company, does he?
`A. The way this is written, a POSITA
`would understand that he's saying that it's used
`from the company that is setting up the class.
`Q. Let me direct your attention to
`Paragraph 29 --
`A. Okay.
`Q.
`-- of Exhibit 20] 0. Do you see the
`first sentence of that paragraph, Ms. O'Neil?
`A. Yes, I see that.
`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 ulaces.
`
`
`
`M. O'NEIL
`
`So you don't read his entire
`Q.
`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.
`
`Q. Oh, I see.
`Isn't it correct that the statement of
`
`principles that Mr. Miller cites in his
`declaration allows for using data other than
`actual claims loss data?
`A. We Should check. Do we have a
`
`specific spot in here?
`I wouldn't want
`Q. You're the actuary.
`to point you to the wrong section, Ms. O'Neil.
`But I‘m referring to Exhibit 2012.
`A.
`I'm not finding it right now, but I
`suspect that -— I'm not sure that it actually
`addresses the exact source of the data. Because,
`once again, these are guidelines. They're not
`meant to be recipe books.
`And [just note one more thing
`re ardin_ Mr. Miller's sentence that ou ointed
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`TSG Reporting - Worldwide
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`9
`877—702—9580
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`(Pages 30 to 33)
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`Page 00005
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` Page 34
`
`me to. This particular sentence, ifyou look at
`it carefully, says:
`Demonstration that an insurer's rates
`
`comply with the statutory rate standards
`typically involves consideration of past and
`prospective loss experience of the insured, the
`experience of other rate filers' business
`judgments, and all other relevant information and
`data within and outside the state.
`
`That statement, that sentence, refers
`
`to the overall rate level. Because ifyou read
`the next sentences, it speaks about
`classifications. Mr. Miller is not permitting
`these types of data -- at this time, at least,
`suggesting these types of data w0uld apply to
`classifications.
`The next sentences refer to
`classifications.
`
`9
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`M. O'NEIL
`forth for the actual base rate. Then the
`
`classification plan follows from that, which is
`what he has got in the next sentence.
`Q.
`In fact, isn't the insurer required to
`justify that its rates are fair and not unfairly
`discriminatory?
`A. All right, that is one ofthe
`In order to
`ratemaking standards in the statute.
`satisfy that demonstration, first the overall
`rate level is in the filing. Then the regulator
`would look at classifications.
`
`Many times, however, classification
`filing is a separate filing.
`It's not part of
`the overall rate level filing because of its
`additional complexity. And generally the
`classification filing is more complex and
`therefore takes more time and it's not done as
`
`frequently as the update of the overall rate
`level.
`
` M. O'NElL
`
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`Q. That's how you read it, at least?
`A. Well, that's a standard way one would
`So yes, they would have to demonstrate
`state. Because he says insurer's rates. That
`the classifications as well and not unfairly
`refers to a rate filing, has an overall rate
`discriminatory, but not as frequently.
`Q. When you read the words "demonstration
`level within it, and that’s what you would use.
`
`
`The data that he's listed here are WhaLErfiPUt
`that an__insurer‘s rates comply with the statutory
`Page 36
`Page 37
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`M. O'NEIL
`M. O'NEIL
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`rate standards," are you excluding the standards
`that relate to rates not being unfairly
`discriminatory?
`A. No, l'm not. As a regulator,
`obviously you want the rates to be not
`inadequate, not excessive and not unfairly
`discriminatory. The question as a regulator is:
`How often must I look at the rates to determine
`
`.
`l
`
`firwrvrvanenenmflmnmfia—p—pmp—wfizmp
`
`compliance?
`Most companies revise their base rates
`frequently as it relates to economic trends and
`so on. So they may want to make a rate filing
`with an insurance regulator every six months. At
`the same time, everyone recognizes, the regulator
`and the company, that classification
`differentials, or whatever you might want to call
`it, classifications don't change all that
`frequently. And so that may not be reviewed by
`the company or by the regulator more than once a
`year or once every several years. So that's why
`it's oftentimes a separate filing.
`And so it's assumed that as long as
`that filing is in place, there has been a filing
`to show that the rates are not unfair]
`
`
`
`discriminatory, you don't have to revise it as
`often as you do the rates that are based on
`trends.
`Q. My question is: Doesn't demonstration
`that an insurer‘s rates comply with the statutory
`rate standards refer not just to the base rates
`but also to the classifications that the insurer
`is proposing to use?
`MR. MYERS: Objection. 402, 403.
`I believe I said that compliance is
`A.
`required with all aspects of the rating law.
`However, the actual implementation on the part of
`the regulator of measuring that compliance can be
`done in a distinct fashion with separate rate
`filings for different aspects of that compliance.
`Q. Do you think Mr. Miller here in
`Paragraph 29 is insisting that the insurer must
`rely on actual claims data in justifying
`actuarial classes?
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`MR. MYERS: Objection. 402, 403.
`A. That's what he says. If you look at
`the second sentence, he says:
`Any claims data gathered by the
`insurer via its risk classification lan, when
`
`TSG Reporting - Worldwide
`
`877—702—9580
`
`10
`
`(Pages 34 to 37)
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`Page00006
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`Page 00006
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`

`M. O'NEIL
`
`M. O'NEIL
`
`Page 50'
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`Page 51
`
`kDCDH-JO‘tLflab-LAJNH
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`declaration you filed accompanying Liberty
`Mutual's petition in this matter?
`A. Yes, this appears to be my original
`declaration, one of them.
`Q. Let me direct your attention to
`Paragraph 1?. Do you see there you‘ve rendered
`opinions about the persOn of ordinary skill,
`right?
`A. Correct.
`
`Q. Are those opinions still your opinions
`today?
`I have not changed this, so yes, that
`A.
`remains my Opinion.
`Q.
`Is it correct that a person of
`ordinary skill in 1996 w0uld not have had
`experience using or applying fuzzy logic in the
`determination of insurance premiums?
`A. That's not necessarily true.
`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 insuLance premiums?
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`Page 52 i
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`M. ()‘NEIL
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`applying fuzzy logic to determine insurance
`premiums?
`A.
`I personally have not utilized fuzzy
`logic. Again, there are many techniques that are
`available and that COme out in various aspects of
`practice that many actuaries have used and many
`have not.
`it doesn't mean that they're not all
`capable as a POSI'I‘A, P-O-S-l-T-A.
`Q.
`So let's go back to your rebuttal
`declaration, Exhibit 1022, and in particular ['11
`direct your attention to Paragraphs 23 and 24.
`Are you there?
`A. Yes.
`
`Q. Okay. Starting with Paragraph 23, you
`quote Mr. Milier's statement there that the
`person of ordinary skill would not have had
`experience using or applying fuzzy logic to the
`determination of insurance premiums.
`Do you see that?
`A. Yes, I see that he made that
`statement.
`
`So at least with respect to you, that
`Q.
`statement applies; is that right? You consider
`ourselfa oerson of ordina
`skill and ou had
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`'U‘itlE-LAJNHOKOCDflamthNl—‘OkomdmtfiywaH
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`i I
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`mummtht—t
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`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.
`Q. You refer to the educational
`experience of a person of ordinary skill in
`Paragraph l7. Do you see that?
`A. Yes.
`
`Q. At least a bachelor of science in
`mathematics or equivalent. Correct?
`A. Yes, I've said that.
`
`In your opinion, would such a person
`Q.
`have even had any course work in fuzzy logic?
`A.
`I wouldn't know. Possibly they might
`have.
`I mean, it‘s been around since 1965.
`It's
`
`I
`quite posaibie, if they were so interested.
`personally had a course in logic, and so fuzzy
`logic is a simple extension of that. It's highly
`possible.
`Q. But you don't know?
`A. Well, I can't account for everyone.
`Q. Have you ever had any experience
`throughout your career since l996vin using or
`Page 53
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`M. O‘NEIL
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`nosuchexpefience?
`A. As Ijust stated, a person of ordinary
`skill in the art would have been aware of many
`techniques. One of them might have been fuzzy
`logic. There was certainly, as Mr. Miller points
`out, multi-variant statistical analysis and
`regression analysis. There were many actuaries
`that were not capable of using that. That
`doesn't mean that you're not a POSITA just
`because you don't know -- haven‘t applied every
`single possible technique that has come up.
`Q. Can you name any actuary you know who
`had experience using or applying fuzzy logic to
`determine insurance premiums as of i996?
`A. We could go to the list of papers that
`I put in here. There are actuaries among them.
`One of them was written by Virginia Young. There
`are possibly others.
`Q.
`I'm talking about your acquaintances
`or professional colleagues that you are aware of.
`Are you aware of whether any ofthem, people you
`have encountered in your career as an actuary,
`whether any of them had any experience using or
`a [ in fuz
`loic in that wa in 1996?
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`Page 67
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`Page 66
`M. O'NEIL
`M. O'NEIL
`A. That is not what I said.
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`mummtwaI—I
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`1 said that
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`l was casually familiar with it from having
`looked at whatever papers were sent to me. It
`was not something at the time that I felt a need
`to attempt to study further to apply it to my
`work.
`
`So is it your opinion that a person of
`Q.
`ordinary skill in the art could combine what's
`taught in the articles you've cited with the
`disclosures of the Kosaka and Herrod prior art
`references in order to create the claimed
`
`invention ofthe '970 patent?
`MR. MYERS: Objection. 402, 403.
`A. That was another very long question.
`Could you possibly --
`MR. WAMSLEY:
`read it back.
`
`I can have the reporter
`
`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.
`
`Q. Let me ask you to look at Paragraph 25
`of your rebuttal declaration where you're quoting
`Mr. Miller's declaration.
`
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`THE WITNESS: Yes, read it back,
`
`please.
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`(Whereupon, the requested portion was
`
`read back by the Reporter.)
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`A. Yes, I'm testifying that indeed
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`someone of ordinary skill in the art could
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`Mutilifizfiefiosaka and Herrod to arrive atwteachings___
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`Page 68
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`M. O'NEIL
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`OBI-ndo‘tU'lle-LUNFJ
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`in the '970 patent. One would not even have to
`know anything about fuzzy logic in order to do
`that because, as Kosaka points out, he does use
`fuzzy logic. But it's not necessary for it to be
`used in order for his system to be utilized. You
`could utilize a lookup table.
`My opinion of reading Kosaka is that
`the addition of fuzzy logic makes it better, but
`you could do it without that.
`
`Q. And is it your opinion that the person
`of ordinary skill in the art in considering
`Kosaka's fuzzy logic embodiment would refer and
`use the disclosure of these five articles in
`
`applying that to come up with what in your
`opinion would be the invention ofthe '970
`patent?
`MR. MYERS: Objection. 402, 403.
`I wouldn‘t specify anything as relates
`A.
`to these five articles in coming up with ~- in
`using Kosaka to come up with the invention of the
`‘970 patent.
`The POSITA would read Kosaka. The
`
`POSITA would, ifthey're familiar with filzzy
`logic and they wished to use that, continue
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`Page 69
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`M. O'NEIL
`believe the device detects more than that.
`
`So you disagree with it because
`Q.
`although it does detect what Mr. Miller has said,
`it also detects other things?
`A.
`It detects speed. It detects relative
`distance.
`It also detects the aspects of the
`driver.
`
`So insofar as it detects speed, as
`Q.
`Mr. Miller has stated, it's an accurate
`statement, correct?
`
`It is, except I might not phrase it
`A.
`that way, speed relative to a preceding vehicle.
`Because that's -- I think Kosaka says something
`like closing distance.
`I forget the exact terms
`that he uses, but it's sort of conveying the same
`thing.
`Q. And the third sentence, Mr. Miller
`says:
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`Do you see that?
`A. Yes.
`
`Q. Do you disagree that, as Mr. Miller
`stated, Kosaka discloses a risk evaluation device
`
`and an insurance premium determination device?
`A.
`I believe that that would be correct.
`
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`Q. Do you --
`
`
`A.
`I would have to look for precise
`
`language, but it seems reasonable.
`
`Q. Okay. Do you agree that in Kosaka the
`risk evaluation device detects the speed relative
`
`to a preceding vehicle, as Mr. Miller has said?
`
`A.
`I believe that's too limited.
`I
`
`
`
`I understand that the speed and
`wavelength data are among the input values used
`to determine a range of fuzzy risk values via
`fuzzy logic.
`Do you agree with that statement?
`
`A. Absolutel not. That statement has a
`
`
`
`TSG Reporting — Worldwide
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`877—702—9580
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`18
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`(Pages 66 to 69)
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`M. O'NEIL
`
`term that doesn't even exist in Kosaka, which is
`"fuzzy risk values." I don't know where
`Mr. Miller got that term.
`Q. Oh, okay. You don't believe there are
`any fuzzy risk values identified in Kosaka’?
`A. Kosaka doesn't use that term.
`
`Q. Do you believe that any of the risk
`evaluation values in Kosaka are fuzzy values?
`A. No. They are crisp values as a result
`of you having used fuzzy logic.
`Q. Let's look at Kosaka, then. If I can
`find it.
`
`Here, Ms. O'Neil, let me hand you
`what's previously been marked in CBM2012-2 as
`Liberty Mutual Exhibit l004.
`(Liberty Mutual Exhibit 1004, having
`been marked for identification, is attached
`
`hereto.)
`
`Q. That's the Kosaka Japanese patent
`publication, correct?
`A. Correct.
`
`LDLbUJNI—‘OkOCDHJmLHLJ‘J-WNH
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`12—Fl.~w_p.w____.m.m.w
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`£16
`it?
`‘ 8
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`‘lllg
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`21
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` M. O'NEIL
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`A. Yes.
`
`Q. Okay. And if you look on page 8, you
`see an indication that Figure 9 is a concrete
`configuration diagram of the risk evaluation
`unit. Correct?
`
`A. Well, where did you see that? Because
`page 8 is pretty big.
`Q. Okay. The paragraph towards the
`bottom of the left-hand column, the first
`sentence.
`A. Yes.
`
`So we know we're looking at the risk
`Q.
`evaluation unit, correct?
`A. Yes.
`
`Q. Okay. And do you see the boxes 62, 64
`and 65 there?
`A. Yes.
`
`
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`
`
`
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`
`Q. What are those, ifyou know?
`A.
`I have to go back to the text and see
`ifthey tell me. Let's see here.
`Q.
`I would suggest you look at page 8
`again because ~-
`A. That's where I'm looking, yes.
`There's a lot of text that mentions
`
`.3
`4
`-51..“
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`So feel free to look at any part of
`Q.
`it, but I am going to direct your attention
`
`
`specifically to Figure 9. Are you there? h
`
`
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`Page 72
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`M. O‘NEIL
`M. O'NEIL
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`these boxes. One part here: 62 is a first fuzzy
`logic part. This first fuzzy logic part has a
`function whereby it carries out defuzzification
`subsequent to balancing the min-max outputs. So
`that's 62.
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`part 64 infers the risk evaluation value related
`to self internal states.
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`Moreover, the first fuzzy logic part
`62 infers the risk evaluation value related to
`
`the frontward moving body. Output of the first
`fuzzy logic part 62 and the second fuzzy logic
`part 64 are conducted to a third fuzzy logic part
`65 and -- as fuzzy input values.
`The risk evaluation value resulting
`from a comprehensive determination carried out at
`this third fuzzy logic part 65 is then output to
`the output controller 66.
`Now, I better keep on. Well, they go
`on to the next figure but they still mention
`these boxes, though, in the next paragraph.
`So What do we want to know, then,
`
`about -- Shall I continue until we get to the
`end of the references?
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`I think my question was simply do you
`Q.
`understand what 62, 64 and 65 are.
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`m-bWNHQKDODmembUJNl—‘OKOCDMJG‘tU't-bUJNH
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`A. Well, what they've said here is that
`
`62, you can sort of-- in the concluding
`
`sentences up here, 64 -- second fuzzy logic part
`
`
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`64 infers the risk evaluation value related to
`
`We don't really need 63. Okay.
`better read 63 anyway.
`Q. You don't have to read it out loud.
`
`I
`
`It helps, don't you
`A. Well, I do.
`think? Ican skip some. Let's see. Although
`like I said, it becomes disconnected if you don't
`look at the whole thing.
`Another integrator, 63, integrates and
`smooths the impulse waveform with the output from
`the control operation detection part 44 defined
`in advance as an event signal. Subsequently an
`operation frequency index is determined from the
`smooth value. This value is output to the second
`fuzzy logic part 64 -- which is in our diagra
`——
`as a fuzzy input value for risk evaluation.
`In addition, the ground speed V naught
`and main engine rotation rates are also input as
`fuzzy input values into the second fuzzy logic
`am 64. As a result, the second fu
`10- EC
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`Is there any disclosure that there is
`Q.
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`anything else in between those fuzzy logic units
`1 and 2 and fuzzy logic u