The Federal Circuit reiterated that inherent properties are not always obvious and that “routine testing” does not preclude patentability. The United States Court of Appeals for the Federal Circuit (“Federal Circuit”) reviews legal conclusions of the Patent Trial and Appeal Board (“Board”) de novo and the Board’s factual findings under the “substantial evidence” standard of review. To a certain extent, the standard of review has made challenging Board decisions finding obviousness problematic because obviousness is a question of law based on underlying factual findings. A recent decision of the Federal Circuit, however, shows how to challenge obviousness on more-easily reversed legal grounds and reaffirms that demonstrating a motivation to combine references, along with a reasonable expectation of success in doing so, is the examiner’s, not the applicant’s, burden. In reexamination, the patent owner should, if possible, introduce evidence of secondary considerations supporting patentability and tie them to the proper legal standard. In Honeywell International, Inc. v. Mexichem Amanco Holdings S.A. de C.V., the Federal Circuit reversed and remanded the Board’s affirmance of the examiner’s rejection of certain claims of U.S. Patent 7,534,366 (“the ’366 patent”) as obvious under 35 U.S.C. § 103. In the decision, the Federal Circuit:
- found that “[t]he Board committed legal error by relying on inherency to find obviousness”;
- determined that the Board committed legal error by finding that the art was unpredictable, but requiring the patent owner (“Honeywell”) to prove that one of ordinary skill in the art would have expected failure of the claimed combination to prove unexpected results; and
- emphasized that the use of “routine testing” does not preclude patentability.
The Reexamination Proceedings The ’366 patent is directed to the use of 1,1,1,2-tetrafluoropropene (“HFO-1234yf”)–an unsaturated hydrofluorocarbon (“HFC”) compound–and a polyalkylene glycol (“PAG”) lubricant in heat transfer systems, such as air conditioning equipment. The illustrative claim disclosed “[a] heat transfer composition for use in an air-conditioning system compromising:” (a) at least about 50% by weight of HFO-1234yf having no substantial acute toxicity; and “at least one poly alkylene glycol lubricant in the form of a homopolymer or co-polymer consisting of two or more oxypropylene groups and having a viscosity from about 10 to about 200 centistokes at about 37° C.” In two merged inter partes reexaminations of the ’366 patent, the examiner rejected certain claims as obvious over a Japanese patent (“Inagaki”) in view of either: (1) a U.S. patent (“Magid”); (2) an Acura Service Bulletin and certain admissions; or (3) a second U.S. patent (“Bivens”)(the “secondary references”). The examiner found that Inagaki expressly disclosed HFO-1234yf and that each of the secondary references taught the use of PAG lubricants with HFC refrigerants, and that the claims therefore would have been obvious over the cited prior art at the time of the invention.
The Board’s Determination
On appeal to the Board, Honeywell argued that Inagaki did not teach the use of HFO-1234yf with any particular lubricant and that instead, that reference taught the combination of HFO refrigerants with immiscible lubricants (such as those commonly employed in the prior art) rather than teaching or suggesting the use of a PAG lubricant. Honeywell also submitted evidence that HFO refrigerants were disfavored at the time of the invention by those skilled in the art because they were known to be reactive and unstable, and that PAG lubricants were also understood to be unstable. As result, Honeywell argued that “one of ordinary skill would not have been led by Inagaki to combine HFO-1234yf, one of a disfavored class of refrigerants, with a PAG lubricant, known to be unstable.” Honeywell further noted that the secondary references referred to the use of a PAG lubricant with saturated refrigerants rather than unsaturated refrigerants such as HFO-1234yf. Honeywell also submitted evidence of secondary considerations, including: (1) the unexpected stability of HFO-1234yf in combination with PAG lubricants over other similar refrigerants combined with PAGs; (2) long-felt but unmet need for compositions having certain environmentally-favorable characteristics; and (3) skepticism that such an environmentally-friendly composition existed, particularly one exhibiting other desirable properties such as low toxicity, stability, reactivity and effectiveness.
The Board affirmed the examiner’s rejection of the claims as obvious, finding that PAGs were known lubricants for “HFC-based refrigeration systems,” as evidenced by the secondary references. The Board concluded that, because Inagaki teaches that the disclosed refrigerants, including HFO-1234yf, did not “have any problem with respect to their general characteristics” (such as compatibility with lubricants), it would have been obvious to combine HFO-1234yf with “known lubricants” such as PAGs. The Board further found that the known drawbacks of using HFO-1234yf would not have deterred one of ordinary skill from choosing that refrigerant because such disadvantages would have been viewed as a tradeoff for the benefits taught by Inagaki—namely, “good cooling with little effect on the ozone.” Further, the Board found that because PAGs were known lubricants, one of ordinary skill motivated to use HFO-1234yf based on the teachings of Inagaki would have arrived at a combination with a PAG lubricant by “routine testing.”
The Board made two other important findings. First, that the claims were obvious because HFO-1234yf’s stability and compatibility with PAG lubricants was an inherent property of HFO-1234yf. Second, even though the Board accepted Honeywell’s evidence that how various refrigerants react with various lubricants is unpredictable, it nevertheless found the claimed invention obvious because Honeywell failed to prove that a skilled artisan would have expected the claimed combination to fail and because one of ordinary skill in the art would have arrived at the combination by “routine testing.”
Finally, the Board found Honeywell’s evidence of secondary considerations to be unpersuasive because of the perceived lack of nexus between the evidence and the claimed composition. The Board determined that Honeywell’s evidence showed that the refrigerant HFO-1234yf possessed desirable properties already known in the art but that the evidence did not show the connection between the favorable properties and the claimed composition.
The Federal Circuit’s Decision
The Federal Circuit reversed the Board’s decision, finding that “[t]he Board committed legal error by improperly relying on inherency to find obviousness and in its analysis of motivation to combine the references.” It noted that “Honeywell provided evidence that at the time of the invention, HFO refrigerants were known to be highly reactive and unstable and yet HFO-1234yf was unexpectedly stable in combination with PAGs, which were also previously understood to be unstable.” In finding the stability and miscibility of HFO-1234yf with a PAG lubricant to be an inherent property of HFO-1234yf, the Board erred because the proper analysis is not whether a property is inherent, but whether unknown properties are unexpected: “All properties of a composition are inherent in that composition, but unexpected properties may cause what may appear to be an obvious composition to be nonobvious.” The Board erred in dismissing the properties of the claimed invention as merely inherent, without further consideration as to their unpredictability and unexpectedness.
Second, the Board erred in dismissing Honeywell’s evidence of unpredictability in the art in determining that one of ordinary skill “would no more have expected failure … than would have expected success” in combining the references. By finding that the art was unpredictable, the Board in effect made a finding that one of ordinary skill in the art would not have had an expectation of success in combining HFO-1234yf and a PAG lubricant, but instead the Board required Honeywell to establish that one of ordinary skill in the art would have expected failure. That determination applied the incorrect standard: in a reexamination, it is the examiner’s burden to show that “one of ordinary skill would have had a motivation to combine the references with a reasonable expectation of success.”
Finally, the Federal Circuit rejected the Board’s rationale that because the art was unpredictable, one of ordinary skill would have arrived at the claimed combination by “routine testing.” The Board’s reasoning reversed the ordinary effect of unpredictability of results—which tends to prove non-obviousness. Further, 35 U.S.C. § 103, which provides that “[p]atentability shall not be negated by the manner in which the invention was made,” was enacted to ensure that routine experimentation does not preclude patentability, which was the effect of the Board’s holding.
Finally, the Federal Circuit concluded that the Board’s decision was legally erroneous in “rejecting Honeywell’s objective evidence” of non-obviousness. The Federal Circuit vacated the Board’s decision and remanded for the Board to make factual determinations regarding the motivation to combine the references and objective indicia of non-obviousness consistent with its decision.