United States: Federal Circuit Criticizes PTAB Reliance On Routine Testing

In Honeywell International, Inc. v. Mexichem Amanco Holdings S.A. DE C.V., the Federal Circuit vacated the decision of the USPTO Patent Trial and Appeal Board that invalidated Honeywell's patent in an inter partes reexamination proceeding. The court's decision could be important to applicants and patent owners facing obviousness rejections based on inherency and routine testing.

The Honeywell Patent At Issue

The patent at issue was Honeywell's U.S. Patent 7,534,366, of which the court cited claim 1 as illustrative:

A heat transfer composition for use in an air conditioning system comprising:

  1. at least about 50% by weight of 1,1,1,2- tetrafluoropropene (HFO-1234yf) having no substantial acute toxicity; and
  2. at least one poly alkylene glycol lubricant in the form of a homopolymer or co-polymer consisting of 2 or more oxypropylene groups and having a viscosity of from about 10 to about 200 centistokes at about 37 °C.

The claims were alleged to be obvious, but Honeywell challenged the prior art's ability to provide a motivation to combine components (a) and (b) with a reasonable expectation of success, and cited evidence of unexpected results. For example, Honeywell cited an understanding in the art that each of HFO refrigerants and PAG lubricants were reactive and unstable, such that one of ordinary skill would not have been motivated to combine them. On the other hand, Honeywell "submitted evidence of secondary considerations," including "the unexpected stability of HFO-1234yf in combination with PAG lubricants over other similar refrigerants combined with PAGs."

The Board rejected Honeywell's arguments. For example, the Board found that the stability of the claimed composition did not support patentability because the cited art revealed a level of unpredictability such that "one of skill in the art 'would no more have expected failure with respect to the stability of combining [HFOs] with PAG than would have expected success.'" That is, a person of ordinary skill in the art would have had a reason to try the claimed combination and assess its stability, and so "'would have arrived at the claimed combination by mere routine testing.'"

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Lourie and joined by Judge Reyna. Judge Wallach dissented in part.

As summarized in the decision, Honeywell alleged three Board errors on appeal:

  1. finding a motivation to combine the references with a reasonable expectation of success
  2. rejecting Honeywell's objective evidence
  3. relying on a new ground of rejection

With regard to motivation to combine, the Federal Circuit found that the "Board committed legal error by improperly relying on inherency to find obviousness and in its analysis of motivation to combine the references."

The court explained:

We have previously stated that 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.

All properties of a composition are inherent in that composition, but unexpected properties may cause what may appear to be an obvious composition nonobvious. Thus, the Board here, in dismissing properties of the claimed invention as merely inherent, without further consideration as to unpredictability and unexpectedness, erred as a matter of law.

With regard to the proffered evidence of unexpected results, the Federal Circuit found:

[T]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.

The court explained:

The Board made what amounts to a finding that one of ordinary skill would not have had a reasonable expectation of success in combining HFO-1234yf with PAG lubricants, but then seemed to make a burden-shifting argument that Honeywell did not persuasively establish that one of ordinary skill would have expected failure. ....

Thus, the Board seems to have determined that, because stability in the art was entirely unpredictable, one of ordinary skill would have made no predictions at all, but rather would have expected to undertake efforts to find an optimal combination and thus that "routine testing" would have led the skilled artisan to the claimed combination

The court reminded the Board of the proper legal question at issue:

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.

*****

Unpredictability of results equates more with nonobviousness rather than obviousness, whereas that which is predictable is more likely to be obvious. Thus, reasoning that one would no more have expected failure than success is not a valid ground for holding an invention to have been obvious. The Board erred in so holding.

Judge Lourie also commented on the Board's "routine testing" rationale:

A further point regarding so-called "routine testing" is that § 103 provides that "[p]atentability shall not be negated by the manner in which the invention was made." 35 U.S.C. § 103 (2012). That provision was enacted to ensure that routine experimentation does not necessarily preclude patentability. .... Here we are concerned with the question of whether the claimed would have been obvious at the time it was made to a person having ordinary skill in the art—not how it was achieved."

With regard to whether the Board relied on a new ground of rejection in its decision, the court found that it had, because "the Board [had] expressly disagreed with the Examiner's reasons and instead stated reasons of its own." Judge Wallach dissented on this issue, because in his view the alleged "new" rationale was not "the principal evidence upon which the [PTAB]'s rejection was based."

In view of these findings, the Federal Circuit vacated and remanded.

USPTO Reliance On Inherency and Routine Testing

Maybe I am reading my own frustrations into Judge Lourie's opinion, but I was struck by his strong language cautioning against the reliance on "inherency" and "routine testing" to support an obviousness rejection, particularly when there is evidence of unpredictability in the art. On the other hand, while I've seen examiners attempt to shift the burden to applicants to show an "expectation of failure," it is surprising to see the Board rely on such "reverse reasoning" contrary to basic principles of obviousness.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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