In a non-precedential decision issued on August 24, 2015, the Federal Circuit affirmed the final decisions of the PTAB in seven overlapping covered business method patent reviews. In those reviews, Liberty Mutual Insurance Company challenged claims in five patents owned by Progressive Casualty Insurance Company, all directed to pricing automobile insurance based on vehicle use or online adjustment of insurance policies. In the Federal Circuit’s decision—its second addressing the merits of a CBM review—the court affirmed the PTAB’s decisions that certain claims were anticipated and others were obvious, and addressed several issues.
Section 325(e)(1) estoppel does not apply to the PTAB
The court first rejected Progressive’s argument that 35 U.S.C. § 325(e)(1) estopped the PTAB from entering a decision after it entered another decision on the same patent claims. Section 325(e)(1) provides that when the PTAB has issued a final written decision, the petitioner (and its real party-in-interest and privies) may not request or maintain a proceeding before the PTO regarding the same claim(s) on any ground that was raised or reasonably could have been raised during the post-grant review. In rejecting Progressive’s argument, the court interpreted the statute as limiting only certain actions by a petitioner (requesting or maintaining actions), and not prohibiting the PTAB from reaching decisions. The PTAB was therefore not barred from issuing its decision, which was about one hour after the first decision. Because of this timing, maintenance of the additional review of the same claims by the petitioner itself was not at issue, but it could have been had the petitioner waited too long to request it.
The court then discussed whether the PTAB erred under the Administrative Procedures Act by relying on a table in a prior-art reference not referred to in either the petition or institution decision, but raised for the first time in reply, after Progressive no longer had a full opportunity to respond to it with evidence. Without ruling on that issue, the court held any error was harmless, as the PTAB did not rely on the table alone for the pertinent point (that fuzzy logic would have been understood).
Incomplete yet sufficient analyses and evidence of motivation to combine references
On the merits of the PTAB’s obviousness decisions, the court was critical—but ultimately forgiving—of the PTAB’s explanations for its findings regarding whether there was a motivation to combine references. According to the court, one of those explanations was “cursory” as it was based on a single paragraph recitation of three points from Liberty’s petition, some of which failed to address whether there was a motivation to combine. The court, however, decided the PTAB’s citations to the record, including an expert declaration, that accompanied its recitation of Liberty’s points constitutes substantial evidence supporting its finding. The court added it had been presented with no persuasive reason to conclude that the declaration did not sufficiently support the PTAB’s finding.
…maintenance of the additional review of the same claims by the petitioner itself was not at issue, but it could have been had the petitioner waited too long to request it.
The court reached a similar result on the other motivation-to-combine finding it discussed. According to the court, the PTAB’s rationale is “incomplete in isolation” and “must be pieced together through a reading of the Board’s full decisions.” The court, however, did precisely that, and held two key findings supported that rationale and were supported by substantial evidence. The first was that one of ordinary skill in the art would have known of basic actuarial principles and practices, which are directed to determining premiums based on accurate risk assessment. A 1988 reference and expert declarations were sufficient evidence. The second was that one of ordinary skill would have also been familiar with use-based insurance, as demonstrated by an admission in the patent-at-issue and other references.
Insufficient description of species in parent application
The only other issue on the merits that the court addressed was whether a parent application provided an adequate written description of patent claims the PTAB found anticipated by an intervening prior-art reference. Not challenging the PTAB’s construction of the terms “driver safety score” or “driver safety data,” Progressive argued both were supported by its parent application’s disclosure of a component that calculates insurance premiums based on “rating factors.” The court disagreed, deciding substantial evidence supported the PTAB’s finding that rating factors are a genus that did not sufficiently disclose the later-recited “driver safety score” or “driver safety data” species. On this point, the patent’s own description came back to haunt it, as the court observed how its disclosure of various non-safety rating factors demonstrated the breadth of “rating factors.”