Liberty Mutual Insurance Co v. Progressive Casualty Insurance Co

1. Case Identification

• Case #: CBM2013-00003
• Patent #: 8,090,598
• Filed: October 15, 2012
• Petitioner(s): Liberty Mutual Insurance Company
• Patent Owner(s): Progressive Casualty Insurance Co.
• Challenged Claims: 1-78

2. Patent Overview

• Title: Monitoring System for Determining and Communicating a Cost of Insurance
• Brief Description: The ’598 patent discloses a risk management system for usage-based insurance. The system uses an in-vehicle device to monitor vehicle operational data, which is wirelessly transmitted to a remote server that analyzes the data, establishes relationships between driving behavior and risk levels, and quantifies driver behavior into a "driver safety score" to determine insurance costs.

3. Grounds for Unpatentability

Ground 1: Obviousness over Kosaka and RDSS - Claims 1-78 are obvious over Kosaka in view of RDSS.

• Prior Art Relied Upon: Kosaka (a Japanese patent application published June 30, 1992) and RDSS (a Geostar publication titled "Understanding Radio Determination Satellite Service" from May 1989).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that Kosaka taught the core elements of the ’598 patent’s risk management system, including an in-vehicle device with sensors to detect vehicle data (e.g., relative speed), a processor that computes risk assessments using fuzzy logic, and a database that stores risk evaluation values to calculate insurance premiums. However, Petitioner argued that Kosaka only hinted at rudimentary data transmission via an antenna for emergency signals. RDSS was alleged to supply the missing element of robust wireless communication. RDSS disclosed a vehicle telematics system with "compact radio terminals located inside a vehicle" that wirelessly send position data and other messages via satellite to a central computer facility for continuous reception and processing. The combination of Kosaka’s risk calculation engine with RDSS’s wireless data transmission system allegedly rendered the limitations of the independent claims obvious.
  • Motivation to Combine: Petitioner argued a person of ordinary skill in the art (POSITA) would combine these references to improve the functionality of Kosaka’s system. Both references operate in the same field of vehicle telematics for risk evaluation. A POSITA would have recognized that implementing Kosaka’s system for determining insurance rates would be made more efficient and commercially viable by using the well-established wireless data transmission technology taught by RDSS. This combination would allow for the automated and timely communication of pertinent driving data to the insurer.
  • Expectation of Success: A POSITA would have had a high expectation of success, as the combination involved applying a known communication technology (RDSS) to an existing type of data analysis system (Kosaka) to achieve a more efficient and predictable result.

Ground 2: Obviousness over Kosaka, RDSS, and Herrod - Claims 9-24 and 56-71 are obvious over Kosaka in view of RDSS and Herrod.

• Prior Art Relied Upon: Kosaka (1992 Japanese publication), RDSS (1989 Geostar publication), and Herrod (a United Kingdom patent application published August 16, 1995).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground builds upon the combination of Kosaka and RDSS. Herrod was introduced to provide specific teachings for monitoring additional types of vehicle data relevant to dependent claims. Petitioner argued Herrod explicitly disclosed a "computer based logging device" for insurance purposes that uses dual-axis accelerometers to measure and record "forward acceleration, backward acceleration (braking) and left and right accelerations (cornering)."
  • Motivation to Combine: A POSITA, having already been motivated to combine Kosaka and RDSS to create a wireless usage-based insurance system, would have sought to improve the accuracy of the risk model. Herrod provided a known method for capturing more granular data about driving behavior (i.e., acceleration and braking forces). Incorporating Herrod's teachings would be a simple and logical step to enhance the risk assessment capabilities of the combined Kosaka/RDSS system, leading to more accurate premium calculations.

Ground 3: Obviousness over Kosaka, RDSS, and Dorweiler - Claims 5-6, 12-13, 21-22, 25-26, 52-53, 59-60, 68-69, 72-73, and 78 are obvious over Kosaka in view of RDSS and Dorweiler.

• Prior Art Relied Upon: Kosaka (1992 Japanese publication), RDSS (1989 Geostar publication), and Dorweiler (an article titled "Notes on Exposure and Premium Bases" published in 1930).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground was asserted to address claims reciting a "prospective cost or an insurance premium." Petitioner argued that Dorweiler, despite its age, provided the foundational business concept for usage-based insurance. Dorweiler described methods for determining "premium bases" and taught that insurance cost adjustments could be made either "prospectively or retrospectively" based on data gathered from "devices" that monitor vehicle usage like mileage.
  • Motivation to Combine: Petitioner contended that Dorweiler provided an explicit, long-standing motivation in the insurance industry to develop systems like the one claimed in the ’598 patent. A POSITA would have viewed the modern technologies in Kosaka (risk calculation) and RDSS (wireless data transfer) as the ideal "practical technical platform" to finally implement the well-established insurance methodology that Dorweiler had proposed decades earlier. The combination provided a direct path to creating a system that could adjust premiums prospectively, as taught by Dorweiler.

4. Key Claim Construction Positions

• "rating factor": Petitioner proposed construing this term to mean a calculated insurance risk value, such as a safety score or usage discount, based on its use in the specification.
• "driver safety score" / "driver safety data": Petitioner proposed this term means a calculated insurance risk value specifically associated with driver safety.
• "insurance rating": Adopting a construction used during reexamination of a parent patent, Petitioner proposed this term means a value or cost used to determine an overall cost associated with insuring a vehicle.
• These constructions were presented as critical to linking the technical data collection elements of the claims to the overarching business method of calculating insurance premiums based on risk.

5. Key Technical Contentions (Beyond Claim Construction)

• Petitioner’s central argument was that the patent was issued based on the Examiner's mistaken belief that the prior art did not teach the wireless transmission of monitored vehicle data. Petitioner contended this feature was, in fact, exceedingly well-known in the art before the patent’s priority date, as evidenced by RDSS. The petition further alleged that the Patent Owner had contributed to this error by deleting explicit acknowledgments of known wireless transmission technologies from the specification of the ’598 patent that had been present in its parent applications.

6. Relief Requested

• Petitioner requested the institution of a Covered Business Method Patent Review and cancellation of claims 1-78 of the ’598 patent as unpatentable under 35 U.S.C. §103.