PTAB Holds Challenged Claims Unpatentable As Obvious Over A Combination Of References

In covered business method post-grant proceeding Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) held all of the challenged claims of U.S. Patent No. 6,064,970 ("the '970 patent") unpatentable as obvious under 35 U.S.C. § 103(a). CBM2012-00002, Paper 66 (Jan. 23, 2014). The PTAB found that the Challenger met its burden of proving, by a preponderance of the evidence, each of the three grounds of invalidity on which the PTAB instituted the review. Because this is the first decision in which the PTAB held claims invalid based on a combination of references, the PTAB's analysis in its Final Written Decision might impact further obviousness challenges in other post-grant proceedings at the USPTO. However, as this was only a decision of one panel, how much of an impact this decision will have on other panels is yet to be determined.

Claim 4 of the '970 patent, which is illustrative of the other challenged claims, covers "[a] method of insuring a vehicle operator for a selected period based upon operator driving characteristics during the period." The claimed methods comprise two main components. First, a base insurance premium is calculated based on an initial collection of information associated with an operator that is related to motor vehicle characteristics or driving characteristics. Second, this base insurance premium is adjusted according to information collected by monitoring the vehicle operator's driving characteristics.

Based primarily on the disclosure of the '970 patent itself, the PTAB found that the "level of ordinary skill in the art is high." Id. at 16. The challenged claims require actuarial knowledge that underlies calculating risk to value insurance premiums as well as some level of expertise in telematics. The PTAB found that the background section of the '970 patent reflected the level of ordinary skill. First, the level of ordinary skill includes a thorough understanding of using the principle of actuarial classes to determine vehicle insurance costs. Further, the background section disclosed that vehicle tracking systems were known in the art and that these systems could be modified to obtain the desired types of information relevant to determine the cost of insurance. This disclosure of the '970 patent was corroborated with evidence that companies during the time of the alleged invention were already developing...