In the final written decisions of two related covered business method (CBM) patent reviews of the same patent, the U.S. Patent and Trademark Office’s (PTO) Patent Trial and Appeal Board (Board) sided with the petitioner, canceling all claims under review. Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., Case Nos. CBM2012-00003, CBM2013-00009 (PTAB, Feb. 11, 2014).

On the first day of eligibility under the America Invents Act (AIA), petitioner Liberty Mutual filed for CBM review of a patent that Progressive had previously asserted against Liberty Mutual. The claimed invention related to a vehicle monitoring system that included a data logging device and a communications device for linking the data logging device to a network of computers for determining a level of safety or cost of insurance related to the vehicle.

Liberty Mutual initially petitioned for CBM review of all 20 claims of the patent, asserting 422 grounds of unpatentability. The Board issued orders denying certain grounds and requiring the petitioner to select a subset from grounds the Board considered vertically or horizontally redundant, providing some clarification under the then-new proceedings. After Liberty Mutual responded by selecting a subset of grounds, it then filed the second petition for CBM review of the patent based on grounds that were not raised it its first petition. For its second CBM petition, Liberty Mutual alleged only obviousness grounds, based on a newly cited primary prior art reference in combination with a secondary prior art reference initially relied on as a primary reference for grounds listed in the first CBM petition but denied by the Board.

The Board instituted review on 10 grounds for the first CBM proceeding and all grounds of review for the second CBM proceeding. In both proceedings, the Board was unpersuaded by Progressive’s argument that a claim-by-claim analysis was required for institution of CBM review rather than the all-or-nothing type of review adopted by the Board.  Progressive also filed a motion to exclude evidence in each proceeding, arguing that Liberty Mutual’s experts cited to evidence not originally relied on in the CBM petitions.

In the final written decision of the first CBM proceeding, the Board cancelled all but three claims that were reviewed on anticipation grounds. The Board concluded that the alleged anticipatory reference cited by the petitioner was not prior art against those claims.  In doing so, the Board analyzed each limitation of those claims for compliance with the written description requirement of § 112, first paragraph, a necessary condition for the benefit of priority under § 120, concluding that the claims were entitled to a priority date earlier than the publication date of the alleged anticipatory reference.

In the final decision for the second CBM proceeding, the petitioner prevailed on all grounds, with the Board cancelling all claims of the patent as being obvious.

In each final decision, the Board denied Progressive’s motions to exclude evidence. In doing so, the Board explained that it is proper for a petitioner to cite to new evidence, not originally relied on, in response to arguments raised in the Patent Owner Response if that response “makes an argument that reasonably could not have been anticipated by the Petitioner.”

Practitioner Note:  The reported CBM proceedings underscore the potential effectiveness of challenging the claimed priority date for claims in a patent issuing from a continuation-in-part (CIP) application, as the burden of proof is shifted to the patent owner to show entitlement to the priority date for each claim under review.  For such CIP-based patents, petitioners may want to consider including in a CBM or IPR petition one or more grounds of invalidity based on prior art antedating an intermediary application of the patent’s priority chain as a way of forcing the patent owner to prove the soundness of the priority claim for each claim under review.