Liberty Mutual Insurance Co.v.Progressive Casualty Insurance Co.

Patent Trial and Appeal Board

Feb 25, 2013

09364803 (P.T.A.B. Feb. 25, 2013)

Trials@uspto.gov Paper 12
571-272-7822 Entered: February 25, 2013

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 CBM2012-00011 (JL)
U.S. Patent No. 7,124,088
____________

Before JAMESON LEE, JONI Y. CHANG, and MICHAEL R. ZECHER,
Administrative Patent Judges.

ZECHER, Administrative Patent Judge

DECISION
Institution of Covered Business Method Review
37 C.F.R. § 42.208

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I. STATEMENT OF THE CASE
On September 28, 2012, Liberty Mutual Insurance Company
(“Liberty”) filed a petition (“Pet.”) requesting review under the transitional
program for covered business method patents of U.S. Patent 7,124,088 (“the
’088 patent”)(Ex. 1001). Paper No. 1. Patent owner, Progressive Casualty
Insurance Company (“Progressive”), filed a preliminary response (Prelim.
Resp.) on January 2, 2013. Paper No. 9. We have jurisdiction under 35
U.S.C. § 324.
The standard for instituting a covered business method review is set
forth in 35 U.S.C. § 324(a), which provides:
THRESHOLD –The Director may not authorize a post-grant
review to be instituted unless the Director determines that the
information presented in the petition filed under section 321, if
such information is not rebutted, would demonstrate that it is
more likely than not that at least 1 of the claims challenged in
the petition is unpatentable.
Liberty challenges claims 1-46 of the ’088 patent under 35 U.S.C.
§§ 102 and 103 as being unpatentable. Pet. at 15-78. Taking into account
Progressive’s preliminary response, we conclude that the information
presented in the petition does not demonstrate that it is more likely than not
that claims 1-46 are unpatentable. Pursuant to 35 U.S.C. § 324 and
section 18(a) of the Leahy-Smith America Invents Act (“AIA”), we do not
authorize a covered business method patent review to be instituted as to
claim 1-46 for the grounds of unpatentability asserted in Liberty’s petition.
Accordingly, the petition is DENIED.
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A. The Invention of the ’088 Patent
The invention of the ’088 patent generally relates to an insurance data
communication and processing system. Ex. 1001, spec. 1:6-14. In
particular, the insurance data processing system allows a policyholder to
access, view, and update insurance policy information via the Internet. Ex.
1001, spec. 2:58-61. After the policyholder is authenticated, the system
retrieves and displays the information requested by the policyholder. Ex.
1001, spec. 2:62-65. The system employs a friendly user-interface that
guides the policyholder through various activities. Ex. 1001, spec. 2:65-67.
Those activities include, but are not limited to: (1) reviewing billing
information; (2) making a payment via a credit card or on-line check; (3)
reviewing policy information; (4) reviewing state specific contract
information (5) quoting and endorsement for vehicle replacement; (6)
making address changes; and (7) reviewing claim information. Ex. 1001,
spec. 2:67-3:4. The system displays both the premium amount and variance,
and updates the file of the policyholder at their request without the need for
personal handling by an individual representative of the insurer or an
independent agent. Ex. 1001, spec. 3:4-8.
Figure 2, which is reproduced below, illustrates a block diagram that
identifies the principal processing modules of the insurance data processing
system. Ex. 1001, spec. 2:43-44.
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The insurance data processing system illustrated in Figure 2 is segregated
into four critical areas of content: (1) policy information 30; (2) policy
changes 32; (3) policy quotes 34; and (4) claims information 36. Ex. 1001,
spec. 5:41-47. A prospective user can navigate to each module from the
Personal Progressive main menu 38 by accessing web pages that specifically
are designed to guide the policyholder to the desired information via clicks
on alternative query marks or via input of necessary information. Ex. 1001,
spec. 5:47-52. Figure 2 also illustrates another module 37 that provides the
policyholder with the ability to acquire on-line forms that typically include
duplicate insurance forms, such as identification cards and declaration page
sets. Ex. 1001, spec. 5:57-60.
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B. Illustrative Claim
Claim 1 is the only independent claim and, therefore, is illustrative:
1. An on-line insurance policy service system
comprising:
a web browser for accessing remote insurance
information by an insurance policyholder and software linked
to the remote insurance information;
a publicly accessible distributed network for transferring
data from the web browser;
an information module, remote from the web browser
coupled to the publicly accessible distributed network, that
identifies the insurance policyholder and verifies an insurance
policy parameter of an existing insurance policy of the
insurance policyholder in real-time in response to first data
received from the insurance policyholder through the publicly
accessible distributed network and the web browser;
where the first data comprises a personal security code
that allows access to insurance policy parameters of the
insurance policyholder;
an insurance policy adjustment module, remote from the
web browser coupled to the publicly accessible distributed
network, that adjusts the insurance policyholder’s insurance
policy parameter in real-time in response to second data
received from the insurance policyholder through the publicly
accessible distributed network and the web browser,
where the second data comprises a selection of the
insurance policy parameter;
where the insurance policy adjustment module provides
an acknowledgement to the web browser in response to the
adjustment of the selected insurance policy parameter within
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the existing insurance policy, and implements the adjustment to
the existing insurance policy; and
where an insurer’s computer generates an insurance
document customized to the insurance policyholder as
identified by the personal security code and sends the
customized insurance document to the web browser in response
to the second data received from the insurance policyholder
through the publicly accessible distributed network and the web
browser.

Ex. 1001, claims—spec. 9:6-44 (emphasis added).
C. Standing
Section 18 of the AIA governs the transitional program for covered
business method patent review. Section 18(a)(1)(B) of the AIA limits such
reviews to persons or their privies that have been sued or charged with
infringement of a covered business method patent.
Liberty indicates that the ’088 patent was asserted against it in
Progressive Cas. Ins. Co. v. Allstate Ins. Co. et al., Case No. 1:11-cv-00082,
which is currently pending in the U.S. District Court for the Northern
District of Ohio. Pet. at 5. Progressive does not dispute that it asserted the
’088 patent against Liberty.
D. Covered Business Method Patent
1. Principles of Law
Under section 18(a)(1)(E) of the AIA, the Board may institute a
transitional proceeding only for a patent that is a covered business method
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patent. Section 18(d)(1) of the AIA defines the term “covered business
method patent” to mean:
a patent that claims a method or corresponding apparatus for
performing data processing or other operations used in the
practice, administration, or management of a financial product
or service, except that the term does not include patents for
technological inventions.
Pursuant to that Section 18(d)(2) of the AIA, the Office promulgated
37 C.F.R. § 42.301(b) to define the term “technological invention” for the
purposes of the transitional program for covered business method patents
review. In determining whether a patent is for a technological invention, the
following shall be considered (37 C.F.R. § 42.301(b)):
whether the claimed subject matter as a whole recites a
technological feature that is novel and unobvious over the prior
art; and solves a technical problem using a technical solution.
2. Contentions
In the petition, Liberty contends that the claimed invention of the ’088
patent is not a “technological invention” because it does not satisfy the
aforementioned definition. Pet. at 3-5. In particular, Liberty argues that the
claims of the ’088 patent do not recite a technological feature that is novel
and unobvious because the claims are directed to performing ordinary
insurance policy services over the Internet using conventional techniques.
Id. at 4 (citing to Ex. 1001, Abstract). Moreover, Liberty argues that the
subject matter as whole does not solve a technological problem because the
claimed system simply modifies an insurance policy by changing policy
parameters. Id. at 4-5 (citing to Ex. 1001, independent claim 1). Liberty
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asserts that the invention of the ’088 patent amounts to nothing more than
managing and updating an insurance policy by communicating over the
Internet. Id. at 5 (citing to Ex. 1001, class 705/4).
In response, Progressive contends that the claims of the ’088 patent
recite a novel and unobvious technical feature. Prelim. Resp. at 10-13.
Progressive argues that Liberty’s discussion regarding the written
description of the ’088 patent, class 705, and their declarations do not
address whether the claimed subject matter as a whole recites a
technological feature that is novel and unobvious over the prior art. Id. at
11-12. Progressive also argues that Liberty’s own claim construction
indicates that the invention of the ’088 patent is directed to specific
technological features—namely software that implements the functions
associated with each of the claimed modules that enable real-time
processing. Id. at 12.
In addition, Progressive contends that the invention of the ’088 patent
solves a technical problem using a technical solution. Prelim. Resp. at 13-
16. Progressive alleges that the system of the ’088 patent provides a
technical solution to the technical problem of providing insurance services
without the assistance of an insurer, agent, or representative. Id. at 15.
Progressive asserts that the ’088 patent solves that problem by providing
insurance policyholders direct electronic access to their insurance provider’s
system, thereby allowing individual policyholders to adjust their insurance
policies and interactively effect changes to those policies in real-time with
the proper technical safeguards. Id. at 15-16.
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3. Analysis
To help the public better understand how the definition of a
technological invention under 37 C.F.R. § 42.301(b) would be applied in
practice, the Office Trial Practice Guide provides the following guidance as
to claim drafting techniques that would typically not render a patent a
technological invention:
(a) Mere recitation of known technologies, such as
computer hardware, communication or computer networks,
software, memory, computer readable storage medium,
scanners, display devices, or databases, or specialized
machines, such as ATM or point of sale device.
(b) Reciting the use of known prior art technology to
accomplish a process or method, even if the process or method
is novel and non-obvious.
(c) Combining prior art structures to achieve the
normal, expected, or predictable result of that combination.

77 Fed. Reg. 157 (Aug. 14, 2012) at 48763-64.
As the presence of a single claim is sufficient to institute a covered
business method patent review, we begin our analysis by looking at
independent claim 1. Independent claim 1 recites “[a]n online insurance
policy service system comprising,” inter alia, “a web browser,” “a publicly
accessible distributed network,” “an information module,” “an insurance
policy adjustment module,” and “an insurer’s computer.” With respect to
the claimed “information module” and “insurance policy adjustment
module,” the ’088 patent equates those modules to software modules that
perform a specified function. See, e.g., Ex. 1001, “software modules”
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disclosed in the Abstract; see also “software linked to remote insurance
information” recited in independent claim 1. That claim construction
appears consistent with the positions taken by both Liberty and Progressive.
Pet. at 6 and 14; Prelim. Resp. at 10, 12, and 14-15.
Based on the guidance noted above, the mere recitation of known
technologies—namely a web browser, a communications network, various
software modules, and a computer—does not render the claimed subject
matter recited in independent claim 1 a technological invention. In other
words, contrary to Progressive’s arguments, all of the aforementioned claim
elements together, except the insurance nature of the data being processed,
amount to nothing more than the combination of known prior art
technologies used in their ordinary and predictable manner. In addition, it
appears that the patentability of the invention in the ’088 patent is not based
on the mere combination of a web browser, a communications network,
software modules, and a computer, but instead on the insurance nature of the
data being processed. Therefore, we conclude that independent claim 1
lacks a novel and unobvious technological feature.
Moreover, the invention in the ’088 patent overcomes the cost and
service problems associated with an insurance company’s representative or
independent agent communicating with an insurance policyholder regarding
their service requests. Ex. 1001, spec. 1:36-45. According to Progressive,
the claims of the ’088 patent allegedly solves those problems by providing
insurance policyholders direct electronic access to their insurance provider’s
system, thereby allowing individual policyholders to adjust their insurance
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policies and interactively effect change to those policies in real-time with the
proper technical safeguards. Prelim. Resp. at 15-16. However, addressing a
policyholder’s service requests using an on-line, automated insurance data
processing system solves a financial problem rather than a technical
problem, i.e., it reduces the administration or personnel costs associated with
handling an insurance service request. Progressive does not assert that at the
time of the invention in the ’088 patent, “real-time” computer data
processing, in general, via a web browser and a communications network
was either unknown or unachievable. Therefore, we conclude that the
claimed subject matter recited in independent claim 1 does not solve a
technical problem using a technical solution.
For the foregoing reasons, the subject matter of independent claim 1
as a whole is not a technological invention under 37 C.F.R. § 42.301(b).
Accordingly, the ’088 patent is eligible for covered business method patent
review.
E. Prior Art Relied Upon
Liberty relies upon the following prior art references:
Tawil US 5,225,976 July 6, 1993 Ex. 1007
Chelliah US 5,710,887 Jan. 20, 1998 Ex. 1006
Peterson US 5,903,873 May 11, 1999 Ex. 1004

F. Alleged Grounds of Unpatentability
Liberty seeks review of claims 1-46 of the ’088 patent based on the
following alleged grounds of unpatentability:
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1. claims 1-3, 12, 13, 19-32, 34-42, and 44-46 as anticipated under
35 U.S.C. § 102 by Peterson (Pet. at 15-49);
2. claims 1-46 as unpatentable under 35 U.S.C. § 103(a) over
Peterson (id. at 49-65);
3. claims 4-18, 44, and 46 as unpatentable under 35 U.S.C.
§ 103(a) over the combination of Peterson and Chelliah (id. at 65-74);
4. claims 25, 26, and 44-46 as unpatentable under U.S.C. § 103(a)
over the combination of Peterson and Tawil (id. at 75-77); and
5. claims 44 and 46 as unpatentable under 35 U.S.C. § 103(a) over
the combination of Peterson, Chelliah, and Tawil. Id. at 78.

II. FINDINGS OF FACT
The following findings of facts are supported by a preponderance of
the evidence.
A. Peterson
1. Peterson discloses a system that registers insurance transactions
and communicates such transactions to the home office computer of an
insurance company. Ex. 1004, spec. 1:6-9. Figure 1 of Peterson, which is
reproduced below, illustrates the system. Ex. 1004, spec. 6:7-10.
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The system illustrated in Peterson’s Figure 1 includes a home office 5, at
least one portable computer 10, and a communication interface 20. Ex.
1004, spec. 7:50-54. Peterson discloses that each portable computer 10
includes a display screen 12, a computer processor 14, a manual input unit
16, and a data storage element 17 that stores insurance information
pertaining to a plurality of insurance customers. Ex. 1004, spec. 7:59-62.
Peterson discloses that the communication interface 20 includes
communication software 22 and a modem 24. Ex. 1004, spec. 9:11-13. In
particular, Peterson discloses that the communication software 22 includes a
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commercially available package of communication software known as
RemoteWare® by XcelleNet. Ex. 1004, spec. 9:13-16 (emphasis added).
2. Figure 3 of Peterson, which is reproduced below, illustrates a
block diagram of a home office computer. Ex. 1004, spec. 6:14-15.

The home office computer illustrated in Peterson’s Figure 3 contains a home
office computer array 50, which includes a central data storage element 51, a
data processor 52, and a communication hub 53. Ex. 1004, spec. 11:22-25.
Peterson discloses that the communication hub 53 may be configured to
include a plurality of server computers 54, each of which has a keyboard,
display screen, memory, data storage, a local area network 55 linking the
server computers 54 to the data processor 52, and a modem pool connecting
the server computers 54 to the telephone network 6. Ex. 1004, spec. 12:12-
20. In particular, Peterson discloses that the server computers 54 utilize
RemoteWare® software by XcelleNet. Ex. 1004, spec. 12:21-24 (emphasis
added).
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4. In a preferred embodiment, Peterson discloses transmitting
agent transaction information from the second group of storage tables stored
in the data storage element 17 of the portable computer 10 to the home
office computer 5 on a nightly basis. Ex. 1004, Spec. 12:31-35. Likewise,
Peterson discloses transmitting the district office transaction information to
the home office 5 on a nightly basis. Ex. 1004, spec. 12:35-38. Peterson
discloses that the home office computer array 50 compiles both the updated
insurance information and the district-specific updated insurance
information derived from the nightly transmissions the following day. Ex.
1004, spec. 12:39-43.
5. Figure 17 of Peterson illustrates a sequence of events that occur
in a Home Office Connection mode. Ex. 1004, spec. 6:62-64.
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Referring to Figure 17 of Peterson, if an insurance agent selects the
scheduled type of home office connection (step 14.2), the portable computer
10 dials the home office 5 via the communication interface 20 at a scheduled
time overnight (step 14.2.1). Ex. 1004, spec. 33:10-14. Upon establishing a
connection with the home office 5, Peterson discloses that the portable
computer 10 transmits to the home office computer array 50 a collection of
transaction files preferably accumulated throughout one day (step 14.2.2).
Ex. 1004, spec. 33:14-20. Next, Peterson discloses that the home office
computer array 50 generates and transmits transaction files to the portable
computer 10 (step 14.2.4), and stores/updates the first group of storage
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tables in the data storage element 17 using the updated insurance
information from the home office 5. Ex. 1004, spec. 33:21-27.
Alternatively, if the insurance agent selects the urgent type of home
office connection (step 14.3), the portable computer 10 immediately dials up
the home office computer array 50 (step 14.3.1) without waiting for the
scheduled time. Ex. 1004, spec. 33:30-34. According to Peterson, the rest
of the home office connection proceeds in the same way as when the home
connection is made in the scheduled manner. Ex. 1004, spec. 33:34-36.
B. The RemoteWare® Press Release
6. The RemoteWare® press release is relied upon by Liberty as
extrinsic evidence to establish that certain claim features are necessarily
present in the RemoteWare® communications software package referred to
in Peterson. The RemoteWare® press release is an announcement by
XcelleNet, Inc. concerning the general commercial availability of version
3.1 of the RemoteWare® software package. Ex. 1005, pg. 1.
1
According to
the RemoteWare® press release, version 3.1 of the RemoteWare® software
package adds full messaging support, subscription and publishing services,
and accessibility from within a web browser. Id. The RemoteWare® press
release also discloses that version 3.1 of the RemoteWare® software
package lets remote users connect to the enterprise through an Internet
browser while it updates applications, exchanges files and electronic mail,
replicates databases, and updates price lists and other sales or marketing

1
All references to the page numbers in the RemoteWare® press release are
to the page numbers located in the top, right-hand corner of each page.
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information. Id. The RemoteWare® press release further discloses that the
Client Control aspect of version 3.1 of the RemoteWare® software package
allows users to initiate a RemoteWare® communications session from
within a webpage. Ex. 1005, pg. 2.

III. CLAIM CONSTRUCTION
During a covered business method patent review, the Board construes
claims by applying the broadest reasonable interpretation in light of the
specification. 37 C.F.R. § 42.300(b). If the specification does not set forth
an explicit or special definition for a claim term, we resort to its ordinary and
customary meaning as would be understood by one with ordinary skill in the
art. See Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005) (en
banc). In some cases, the ordinary and customary meaning of a claim term
as would be understood by one with ordinary skill in the art may be readily
apparent even to lay judges, and claim construction in such cases involves
little more than the application of the widely accepted meaning of commonly
understood words. See id. at 1314.
Liberty has identified seven claim terms and its claim construction for
those terms. Pet. at 13-15. Those claim terms are listed as follows: (A)
“accessing remote insurance information by an insurance policyholder;” (B)
“information module,” “insurance policy adjustment module,” “payment
module,” “payment enablement module,” “claims information module,” and
“policy quote(s) module;” (C) “insurance policy parameter;” (D) “real-
time;” (E) “personal security code;” (F) “adjustment;” and (G) “insurance
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document.” Id. As a first step to determine whether to institute a covered
business method patent review, we will address each claim term identified
by Liberty in turn.
A. “Accessing remote insurance information by an insurance
policyholder”

Liberty construes the claim phrase “accessing remote insurance
information by an insurance policyholder” to mean that an insurance
policyholder or someone acting on his or her behalf accesses insurance
information located elsewhere. Pet. at 13. Liberty contends that the
specification of the ’088 patent does not limit that claim phrase to direct
access by a policyholder. Id. at 14. In response, Progressive contends that
Liberty’s claim construction with respect to the claim term “insurance
policyholder” is unreasonable. Prelim. Resp. at 20-21. Progressive argues
that throughout the specification, the claim term “insurance policyholder”
describes a person who holds ownership in an existing insurance policy
rather than a person, such as an insurance agent or other insurance company
personnel, acting on behalf of the insurance policyholder. Id. at 22-23
(citing to Ex. 1001, Abstract; spec. 1:41-53, 2:62-65, and 3:4-8). Moreover,
Progressive alleges that the use of the claim term “an insurance
policyholder” throughout the specification is consistent with its common
understanding in the insurance industry. Id. at 23. Progressive directs us to
a dictionary of insurance terms that defines a “policyholder” as an
“individual or other entity who owns an insurance policy” and “synonymous
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with policyowner.” Id. (citing to Ex. 2007, Harvey W. Rubin, Dictionary of
Insurance Terms, 3rd ed. (1995)).
Upon reviewing the specification, we do not find an explicit or special
definition for the claim term “insurance policyholder.” Therefore, we resort
to its ordinary and customary meaning as would be understood by one with
ordinary skill in the art. See Phillips, 415 F.3d at 1312. We agree that the
dictionary definition offered by Progressive amounts to the broadest
reasonable interpretation of the claim term “insurance policyholder.”
However, the claim phrase “accessing remote insurance information by an
insurance policyholder” (emphasis added) does not require the insurance
policyholder to personally access the insurance information and, therefore,
should not be construed so narrowly to preclude someone acting on the
insurance policyholder’s behalf. We can find nothing in the specification
indicating that access by an insurance policyholder is limited only to direct
access by the insurance policyholder and excludes indirect access through
someone acting on behalf of the insurance policyholder.
While we agree with Progressive that the claim term an “insurance
policyholder” by itself constitutes a person who owns an existing insurance
policy rather than someone acting on his or her behalf (Prelim. Resp. at 22-
23), the key issue here centers on the entire claim phrase “accessing remote
insurance information by an insurance policyholder.” Progressive identifies
two statements in the specification that purportedly support its view that
access by an insurance policyholder must mean direct access by the
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insurance policyholder without someone acting on his or her behalf. Id. In
one, the specification of the ’088 patent states that:
[t]he present invention contemplates a new and improved
insurance policy service and delivery system for
communicating changes in policy parameters to an insurer via
an Internet on-line automated system, thereby obviating
representative or agent personal involvement in the interfacing
and communicating of policy parameter changes, policy
changes and associated charge adjustments between the
customer and the insurer.
Ex. 1001, spec. 1:45-53. In the other, the specification of the ’088 patent
states that “[a]ny way the insurer can reduce personnel involvement in
addressing policyholder services is a way that can improve efficiency and
reduce costs—costs that can be eliminated to result in lower rates to a
consumer buying the insurance.” Ex. 1001, spec. 1:41-45. However, those
statements are inapposite because they pertain to allowing direct access by
an insurance policyholder without personnel involvement from the insurer
and do not prohibit indirect access through someone acting on behalf of the
insurance policyholder, e.g., an adult child acting on behalf of an elderly
parent.
B. “Information module,” “insurance policy adjustment module,”
“payment module,” “payment enablement module,” “claims information
module,” and “policy quote(s) module”

Liberty construes those claim terms to mean software associated with
the functions as named for each “module” in the corresponding claims. Pet.
at 14 (citing to Ex. 1001, Abstract; spec. 3:24-28, 5:44-49). Progressive
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does not challenge Liberty’s claim construction with respect to those claim
terms. Because Liberty’s claim construction is consistent with the
specification of the ’088 patent, we agree with Liberty’s claim construction.
C. “Insurance policy parameter”
Liberty construes the claim term “insurance policy parameter” to
mean any information relating to an insurance policy. Pet. at 14 (citing to
Ex. 1001, spec. 2:11-17, 3:31-4:42). Progressive does not challenge
Liberty’s claim construction with respect to that claim term. Because
Liberty’s claim construction is consistent with the specification of the ’088
patent, we agree with Liberty’s claim construction.
D. “Real-time”
Liberty construes the claim term “real-time” to mean at the same or
substantially the same time. Pet. at 14-15 (citing to Ex. 1001, spec. 1:57-2:5,
2:58-3:23). In response, Progressive contends that Liberty’s proposed claim
construction is unreasonable because “substantially” is a relative term that
does not provide a standard for measuring degree or scope. Prelim. Resp. at
23. Moreover, Progressive argues that Liberty does not identify an explicit
or special definition for the claim term “real-time” in the intrinsic record
and, therefore, Liberty has not overcome the presumption that the claim term
“real-time” takes on its ordinary and customary meaning. Id. at 24.
Upon reviewing the specification, we do not find an explicit or special
definition for the claim term “real-time.” Therefore, we resort to its ordinary
and customary meaning as would be understood by one with ordinary skill
in the art. See Phillips, 415 F.3d at 1312. Accordingly, we construe the
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claim term “real-time” as “pertaining to a system or mode of operation in
which computation is performed during the actual time that an external
process occurs, in order that the computation results can be used to control,
monitor, or respond in a timely manner to the external process. Contrast:
batch. See also: conversational; interactive; interrupt; on-line.” The IEEE
Standard Dictionary of Electrical and Electronics Terms, 6th ed. (1996).
E. “Personal Security Code”
Liberty construes the claim term “personal security code” to mean
data personal to a user that provides secure access to information. Pet. at 15
(citing to Ex. 1001, spec. 3:8-11, 5:11-43). In response, Progressive
contends that the Liberty’s proposed claim construction is unreasonable to
the extent that the code is personal to a user other than the insurance
policyholder. Prelim. Resp. at 23. However, we note that Liberty’s
proposed claim construction does not include data that is personal to a user
other than the insurance policyholder. Because Liberty’s claim construction
is consistent with the specification of the ’088 patent, we agree with
Liberty’s claim construction.
F. “Adjustment”
Liberty construes the claim term “adjustment” to mean any change,
modification, or update. Pet. at 15 (citing to Ex. 1001, spec. 1:60-2:5, 7:60-
8:19). Progressive does not challenge Liberty’s claim construction with
respect to that claim term. Because Liberty’s claim construction is
consistent with the specification of the ’088 patent, we agree with Liberty’s
claim construction.
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G. “Insurance document”
Liberty construes the claim term “insurance document” to mean any
document related to an insurance policy. Pet. at 15 (citing to Ex. 1001,
independent claim 1). Progressive does not challenge Liberty’s claim
construction with respect to that claim term. Because Liberty’s claim
construction is consistent with the specification of the ’088 patent, we agree
with Liberty’s claim construction.

V. ANALYSIS

A. 35 U.S.C. § 102 Ground of Unpatentability—Claims 1-3, 12, 13, 19-32,
34-42, and 44-46 as Anticipated by Peterson

1. Principles of Law
“A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single prior
art reference.” Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d
628, 631 (Fed. Cir. 1987).
To serve as an anticipation when the reference is silent about
the asserted inherent characteristic, such gap in the reference
may be filled with recourse to extrinsic evidence. Such
evidence must make clear that the missing descriptive matter is
necessarily present in the thing described in the reference, and
that it would be so recognized by persons of ordinary skill.

Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed.
Cir. 1991). “Inherency, however, may not be established by probabilities or
possibilities. The mere fact that a certain thing may result from a given set
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of circumstances is not sufficient.” In re Robertson, 169 F.3d 743, 745 (Fed.
Cir. 1999) (citations and internal quotation marks omitted).
2. Introduction
In the petition, all five grounds of unpatentability alleged by Liberty
are based in whole or in part on Peterson. Peterson does not expressly
describe all the claim features recited in the ’088 patent. Consequently,
Liberty relies upon the RemoteWare® press release as extrinsic evidence to
establish that certain claim features are inherently disclosed in Peterson. Pet.
at 19-31. The RemoteWare® press release issued on October 7, 1996. Ex.
1005, pg. 1. The RemoteWare® press release is an announcement by
XcelleNet, Inc. concerning the general commercial availability of
RemoteWare® version 3.1 software. Id. Liberty relies upon the description
of RemoteWare® version 3.1 software in the RemoteWare® press release to
show what must be necessarily present in Peterson.
3. Contentions
Liberty contends that claims 1-3, 12, 13, 19-32, 34-42, and 44-46 are
anticipated by Peterson. Pet. at 15-49. In particular, Liberty relies upon the
description of RemoteWare® version 3.1 software in the RemoteWare®
press release to confirm the inherent features of Peterson—namely a web
browser, the Internet, and webpages. Id. at 19. Based on that reliance,
Liberty argues that Peterson describes the claimed subject matter recited in
claims 1-3, 12, 13, 19-32, 34-42, and 44-46. Id. at 19-49.
In response, Progressive contends that Liberty fails to demonstrate
that claims 1-3, 12, 13, 19-32, 34-42, and 44-46 are anticipated by Peterson.
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Prelim. Resp. at 25-41. In particular, Progressive argues that the description
of RemoteWare® version 3.1 software in the RemoteWare® press release
cannot be used as extrinsic evidence to confirm the inherent features of
Peterson in order to establish an anticipation rejection. Id. at 26-29.
Progressive indicates that Peterson was filed on May 31, 1996, whereas the
RemoteWare® press release was not publicly available before October 7,
1996. Id. at 27-28. Given the four month gap between May 31, 1996, and
October 7, 1996, Progressive asserts that the RemoteWare® version 3.1
software described in the RemoteWare® press release could have been
conceived and developed after Peterson was filed and, therefore, the
contents of the RemoteWare® press release cannot be relied upon as a
description of any RemoteWare® software referred to in Peterson. Id. at 28.
Further, Progressive contends that Peterson fails to disclose “an
insurance policy adjustment module, remote from the web browser coupled
to the publicly accessible distributed network, that adjusts the insurance
policyholder’s insurance policy parameter in real-time in response to second
data received from the insurance policyholder through the publicly
accessible distributed network and the web browser,” as recited in
independent claim 1. Prelim. Resp. at 30 (emphasis added). In particular,
Progressive argues that the only difference between Peterson’s normal
scheduled connection option and the “urgent type” connection option is how
the connection is initiated between the portable computer and the home
office. Id. at 32 (citing to Ex. 1004, spec. 33:29-36.) Progressive alleges
that the rest of the “urgent type” connection option does not include any
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real-time insurance parameter adjustments at the home office while the
portable computer is connected to the home office for the initial upload. Id.
at 33. Instead, Progressive asserts that the home office computer batch
processes the data uploaded during the “urgent type” connection option the
next day, and then returns the updated data back to the portable computer the
next night. Id. (citing to Ex. 1004, spec. 1:66-2:8, 12:30-49). We are
persuaded by Progressive’s arguments.
4. Analysis
We begin our analysis by determining if Liberty properly relies on the
RemoteWare® press release to support its assertion that features of the
RemoteWare® version 3.1 software described in the press release are
inherently disclosed in Peterson. Peterson discloses that the communication
interface associated with the portable computer includes communication
software such as RemoteWare®. Ex. 1004, spec. 9:11-17. Peterson also
discloses that each of the server computers contained within the home office
computer array use RemoteWare® software. Ex. 1004, spec. 12:21-24. As
set forth in the Introduction section, the RemoteWare® press release
announces the commercial availability of version 3.1 of the RemoteWare®
software package. Ex. 1005, pg. 1. According to the RemoteWare® press
release, version 3.1 of the RemoteWare® software package adds
accessibility from within a web browser, lets remote users connect to the
enterprise via an Internet browser, and allows prospective users to initiate
communications sessions from within a webpage. Ex. 1005, pgs. 1-2.
Based on the cited disclosures in the RemoteWare® press release describing
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version 3.1 of the RemoteWare® software package, Liberty asserts that the
RemoteWare® software referred to in Peterson necessarily includes a web
browser, the Internet, and webpages. Pet. at 19.
However, Liberty does not provide any persuasive evidence or
technical reasoning indicating that the use of a web browser, the Internet,
and webpages in the RemoteWare® version 3.1 software are necessarily
present in the RemoteWare® software referred to in Peterson. Peterson only
refers to RemoteWare® software generally and not to RemoteWare®
version 3.1 software specifically. See Ex. 1004, spec. 9:11-17; 12:21-24.
Liberty has not shown that the RemoteWare® software referred to in
Peterson is the same version of RemoteWare® software referred to in the
RemoteWare® press release, i.e., RemoteWare® version 3.1 software. The
likelihood that the RemoteWare® software referred to in Peterson may be an
earlier version of RemoteWare® software other than version 3.1 undermines
Liberty’s position on inherent disclosure in Peterson. See Robertson, 169
F.3d at 745. Therefore, we are not persuaded by Liberty’s argument that
features of the RemoteWare® version 3.1 software described in the
RemoteWare® press release are necessarily present in the RemoteWare®
software referred to in Peterson.
Second, we determine whether Liberty’s reliance on Peterson properly
accounts for the claimed “insurance policy adjustment module” feature and
corresponding “real-time” adjustment aspect required by independent claim
1. Pet. at 27-28. Figure 1 of Peterson illustrates a system that registers
insurance transactions and communicates such transactions to the home
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office computer of an insurance company. Ex. 1004, spec. 6:7-10. Peterson
discloses that the system includes a home office and at least one portable
computer. Ex. 1004, spec. 7:50-54. Figure 17 of Peterson illustrates that the
portable computer can select from three different types of home office
connections, two of those options are: (1) scheduled; and (2) urgent. Ex.
1004, spec. 33:4-9. Peterson discloses that during the urgent type
connection option, the portable computer immediately establishes a
connection with the home office computer without waiting for the scheduled
time. Ex. 1004, spec. 33:30-34.
Based on the aforementioned disclosure in Peterson, Liberty takes the
position that the entire urgent type connection option occurs in real-time.
Pet. at 28 (citing to Ex. 1008, Klausner Dec. ¶¶ 16, 28-30, 35-38). However,
Liberty does not direct us to a specific disclosure in Peterson that expressly
describes the adjustment and processing steps that occur during the latter
half of the urgent type connection option. Liberty’s stated position also fails
to address Peterson’s disclosure that the latter half of the urgent type
connection option occurs in the same way as the scheduled manner. Ex.
1004, spec. 33:34-36.
Peterson discloses that during the scheduled type connection option
illustrated in Figure 17, the portable computer submits transaction files that
were accumulated throughout one day to the home office on a nightly basis.
Ex. 1004, spec. 33:10-20. Peterson also discloses that for the scheduled
manner of operation, the home office compiles and adjusts insurance
information received from the previously scheduled nightly submission
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sometime during the following day, and transmits such processed
information back to the portable computer during the next scheduled nightly
transmission. Ex. 1004, spec. 1:66-2:8, 12:39-43.
Peterson discloses that during the urgent type connection option
illustrated in Figure 17, the portable computer immediately transmits a
transaction file to the home office instead of holding the transaction file until
the next scheduled nightly transmission. Ex. 1004, spec. 33:30-34.
However, Peterson is not entirely clear about the adjustment and processing
steps that occur when the home office receives the transaction file in the
urgent type connection mode. Peterson only informs us that the latter half of
the urgent type connection option occurs in the same way as the scheduled
manner. Ex. 1004, spec. 33:34-36.
We do not agree with Liberty’s contention that Peterson’s urgent type
connection option necessarily entails real-time adjustment and processing of
insurance information. Liberty primarily argues that it would make no sense
for the urgent type connection option to not be conducted in real-time. Pet.
at 18. That argument is without merit because Liberty does not account for
the fact that, even without real-time adjustment and processing, the urgent
type connection option may work in a way that reduces the response time of
the home office by a whole calendar day. For instance, note the following
scenario:
(1) a transaction file may be transmitted from the portable
computer to the home office during an urgent type connection
established at 10:00am;
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(2) the transaction file is then added to the collection of
transaction files transmitted during the previous scheduled
nightly transmission;
(3) sometime during the day, the transaction file received at
10:00am is processed with the collection of transaction files
received from the previous scheduled nightly transmission; and
(4) all of the adjusted transaction files, which includes the
transaction file received at 10:00am, are transmitted back to the
portable computer during the next scheduled nightly
transmission.

In the above-described scenario, the response time for the transaction file
transmitted during the urgent type connection option is moved ahead one full
calendar day than what it would be if the transaction file were held up and
sent during the regularly scheduled nightly transmission. The corresponding
result is still achieved using batch adjustment and processing of insurance
information and does not entail real-time adjustment and processing of
insurance information.
Finally, we are not persuaded by the corresponding declaration
testimony of David Klausner. Pet. at 28 (citing to Ex. 1008). In the
declaration, Mr. Klausner states:
In my opinion, Peterson would necessarily be understood by
one of ordinarily skill to disclose that the ‘urgent mode’
transmission of data from the portable computer, as well as the
processing of data at the home office computer and re-
transmission back to the portable computer, all happen in real-
time. In my view, a person of ordinarily skill would have
understood that the “urgent mode” connection would run
‘urgently’ in real-time—i.e. without waiting for the home office
computer to process the data at some later (non-urgent and non-
real-) time.
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Ex. 1008, ¶ 28. First, Mr. Klausner’s testimony is conclusory because it
does not explain why one with ordinary skill in the art would have
understood that adjustment and processing of insurance information
transmitted during the urgent type connection option must necessarily entail
real-time adjustment and processing. Second, Mr. Klausner’s testimony
does not account for the scenario described above. It is simply not the case
that Peterson’s urgent type connection option makes no sense or is illogical
unless the adjustment and processing of insurance information, once it is
received, occurs in real-time. To the contrary, based on the scenario
described above, it is more logical that adjustment and processing of the
transaction file transmitted during the urgent type connection option does
not occur in real-time because Peterson explicitly discloses that once the
transaction file is received, adjustment and processing occurs in the same
way as in the scheduled manner. Ex. 1004, spec. 33:34-36. Therefore,
based on the record before us, Peterson’s urgent type connection option does
not properly account for the claimed “insurance policy adjustment module”
feature and corresponding “real-time” adjustment aspect required by
independent claim 1.
For the foregoing reasons, we conclude that Liberty’s petition does
not demonstrate that it is more likely than not that independent claim 1 of
the ’088 patent would have been anticipated by Peterson. For the same
reasons, we conclude that Liberty’s petition does not demonstrate that it is
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more likely than not that claims 2, 3, 12, 13, 19-32, 34-42, and 44-46 of the
’088 patent would have been anticipated by Peterson.
B. Remaining 35 U.S.C. § 103(a) Grounds of Unpatentability
Each of the remaining grounds of unpatentability alleged by Liberty is
based in whole or in part on Peterson. In our discussion of the anticipation
challenge alleged by Liberty, we determine that Liberty’s reliance on the
RemoteWare® version 3.1 software described in the RemoteWare® press
release does not establish any inherent disclosure in Peterson, and that
Peterson’s urgent type connection option does not properly account for the
claimed “insurance policy adjustment module” feature and corresponding
“real-time” adjustment aspect required by independent claim 1. Therefore,
for those same reasons, we conclude that Liberty’s petition does not
demonstrate that it is more likely than not that: (1) claims 1-46 of the ’088
patent would have been unpatentable over Peterson; (2) claims 4-18, 44, and
46 of the ’088 patent would have been unpatentable over the combination of
Peterson and Chelliah; (3) claims 25, 26, and 44-46 of the ’088 patent would
have been unpatentable over the combination of Peterson and Tawil; and (4)
claims 44 and 46 of the ’088 patent would have been unpatentable over the
combination of Peterson, Chelliah, and Tawil.

VI. RELATED PROCEEDING
Liberty also filed a petition requesting a covered business method
patent review of claims 1-46 of the ’088 patent in CBM2012-00010. In that
proceeding, we have ordered the institution of a covered business method
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patent review for claims 1-46 based on the following grounds of
unpatentability:
A. claims 1-8, 12-41, and 44-46 as unpatentable under 35 U.S.C.
§ 103(a) over NAIC;
B. claims 4-11, 42, and 43 as unpatentable under 35 U.S.C. § 103(a)
over the combination of NAIC and Lockwood.

VI. ORDER
It is ORDERED that pursuant to 35 U.S.C. § 324(a) and section 18(a)
of the AIA, a covered business method patent review is hereby denied as to
claims 1-46 of the ’088 patent for the following grounds of unpatentability:
A. claims 1-3, 12-13, 19-32, 34-42, and 44-46 as anticipated under 35
U.S.C. § 102 by Peterson;
B. claims 1-46 as unpatentable under 35 U.S.C. § 103(a) over
Peterson;
C. claims 4-18, 44, and 46 as unpatentable under 35 U.S.C. § 103(a)
over the combination of Peterson and Chelliah;
D. claims 25, 26, and 44-46 under 35 as unpatentable under U.S.C.
§ 103(a) over the combination of Peterson and Tawil; and
E. claims 44 and 46 as unpatentable under 35 U.S.C. § 103(a) over
the combination of Peterson, Chelliah, and Tawil.

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For PETITIONER:
J. Steven Baughman
Nicole M. Jantzi
ROPES & GRAY LLP
steven.baughman@ropesgray.com
nicole.jantzi@ropesgray.com

For PATENT OWNER
James A. Collins
Joseph Hanasz
Robert Mallin
BRINKS HOFER GILSON & LIONE
jcollins@brinkshofer.com
jhanasz@brinkshofer.com
rmallin@brinkshofer.com

lb