11/14/2017

Honeywell International Inc. V. Mexichem Amanco Holding, Case No. 2016-1996 (Fed. Cir. August 1, 2017)

In Honeywell International Inc. v. Mexichem Amanco Holding, Case No. 2016-1996 (Fed. Cir., decided August 1, 2017), the Federal Circuit vacated and remanded a Patent Trial and Appeal Board’s (“The Board”) decision that found a Honeywell patent for an air conditioner refrigerant invalid.

Mexichem and Daikin Industries, Ltd. (together, “Mexichem”) filed requests for inter partes reexamination of US 7,534,366, owned by Honeywell, which the USPTO granted and merged into a consolidated proceeding.

Claim 1 of the ‘366 patent reads: “A heat transfer composition for use in an air conditioning system comprising: (a)  at least about 50% by weight of 1,1,1,2-tetrafluoropropene (HFO-1234yf) having no substantial acute toxicity; and (b) at least one poly alkylene glycol lubricant [PAG lubricant] ….”

During the reexamination, the Examiner rejected certain claims of the ‘366 patent as being obvious over JP 04-110388 (“Inagaki”) in view of secondary references—Magid, Acura/Patentee’s Admissions, or Bivens.

The Examiner found that Inagaki expressly discloses HFO-1234yf and that each of the secondary references teaches the use of PAG lubricants with HFC (hydrofluorocarbon) refrigerants.

Honeywell appealed to the Board and 1) argued that Inagaki does not teach the use of HFO-1234yf with any particular lubricant, much less a PAG lubricant; further, the secondary references use “HFC” to refer only to saturated HFC refrigerants, not unsaturated (i.e., HFO) refrigerants; 2) submitted evidence that HFO refrigerants were known to be reactive and unstable, and that PAG lubricants were hygroscopic and thus unstable; and 3) submitted evidence of secondary considerations including unexpected stability of HFO-1234yf in combination with PAG lubricants; long-felt but unmet need for compositions having certain environmentally-favorable characteristics; and skepticism that such an environmentally-friendly composition existed.

The Board affirmed and stated that 1) PAGs were known lubricants for “HFC-based refrigeration systems,” and Inagaki teaches that the disclosed refrigerants, including HFO-1234yf, “do not have any problem with respect to their general characteristics;" 2) HFO-1234yf's stability and miscibility with a PAG lubricant are properties that are “inherent to the refrigerant;” and 3) due to the “overall unpredictability as to stability in the art,” one of ordinary skill would have arrived at the claimed combination by mere routine testing and “would no more have expected failure with respect to the stability of combining [HFOs] with PAG than would have expected success.”

The Federal Circuit found that the Board, in dismissing properties of the claimed invention as merely inherent, without further consideration as to unpredictability and unexpectedness, erred as a matter of law.

The Federal Circuit also found the Board erred in dismissing Honeywell’s evidence of unpredictability in the art when it stated that one of ordinary skill would no more have expected failure than success in combining the references.

According to the Federal Circuit, the use of inherency in the context of obviousness must be carefully circumscribed because “[t]hat which may be inherent is not necessarily known” and that which is unknown cannot be obvious.  What is important regarding properties that may be inherent, but unknown, is whether they are unexpected.

Also, according to the Federal Circuit, in an inter partes reexamination involving obviousness, the standard is not whether the patent owner can persuasively show that one of ordinary skill would have expected failure; rather, the burden is on the Examiner to show that one of ordinary skill would have had a motivation to combine the references with a reasonable expectation of success; further, routine experimentation does not necessarily preclude patentability.

The Federal Circuit concluded that the Board’s analysis was legally erroneous in its consideration of inherency, in concluding that unpredictability indicates obviousness, and in rejecting Honeywell’s objective evidence.  Because finding a motivation to combine the references and consideration of objective evidence are fact questions, the Federal Circuit vacated and remanded for the Board to make determinations.