With Progressive Insurance’s recent patent loss to Liberty Mutual Insurance, insurers are running out of reasons for not pursuing leading edge technologies, such as telematics and usage-based insurance, industry experts say, and recent changes in patent law are favoring those who challenge patent holders.
Progressive initially filed patent litigation against Liberty Mutual and others, but soon found itself on defense when Liberty Mutual challenged the validity of Progressive’s patents, flipping the momentum and the outcome.
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“Progressive’s patent enforcement has been stopped in its tracks by Liberty Mutual’s validity challenge,” says Josh Pond, a registered patent attorney and partner at Kilpatrick Townsend & Stockton LLP in Washington, D.C. “The new validity challenges have generally been more favorable to challengers, and often these challengers are accused infringers. If presented with patents in this field, certainly consider challenging them at the [U.S Patent and Trademark Office (PTO)], like Liberty Mutual did here.”
Progressive had filed nine patent infringement suits in U.S. District Courts between 2010 and 2012, Pond says, and all them where stayed pending Liberty Mutual’s validity challenge, which Progressive has now lost. Progressive has not filed a single further patent infringement suit since, he adds.
Pond said that the decisions against Progressive are consistent with emerging trends from the PTO, which tends to find the majority of challenged patent claims invalid, and the Federal Circuit is affirming most of those findings.
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These new PTO proceedings and validity challenges are affecting U.S. District Court’s as well, he explains.
“Recall Progressive started this fight by suing Liberty Mutual and others in the Northern District of Ohio for infringing these patents,” Pond says. “The judge there stayed Progressive’s infringement suit, pending the outcome of Liberty Mutual’s validity challenge to the PTO. Liberty Mutual’s validity challenges shut down Progressive’s patent enforcement campaign.”
One of the crucial issues in the dispute was how early Progressive claimed to have invented the technologies, claiming that an early patent application supported individualized insurance rates, Pond says.
“Ultimately, the court found that the early application only supported actuarial classes,” Pond says. “At the end of the day, Progressive was over reaching on how early and how broad its early inventions were. That’s part of the reason they lost in both the Patent office and in the Federal Circuit court. The court said Progressive didn’t really describe individualized rates until this later application, and other people had already described it by then, so it’s not novel.”
Progressive has limited opportunities for further appeal, Pond adds, with the only options requiring an appellate court to approve and accept Progressive’s plea.
“They could request a rehearing by the current panel at the Federal Circuit, the three judges that heard them the first time, or they could request a broader en banc hearing, which would be all the judges on the Federal Circuit. Or they could request and appeal to the Supreme Court. The likelihood of any of those receiving favorable action is extremely low,” Pond says.
