The Claims Interpreted Report
Unpredictability, not Inherency, Important for Obviousness
By Peter Keros
Categories: Ex Parte PTAB Appeals, Patent Eligibility, The Claims Interpreted Report, USPTO Post-Issue Proceedings
In Honeywell International Inc. v. Mexichem Amanco Holding S.A. De C.V., No. 2016-1996, 2017 U.S. App. LEXIS 13909 (Fed. Cir. Aug. 1, 2017), the Federal Circuit vacated and remanded a PTAB decision, holding that an obviousness rejection based on inherent properties should be reconsidered where the patent owner presents evidence of unpredictability in the art and unexpected results.
Honeywell International, Inc. (“Honeywell) owns U.S. Patent No. 7,534,366, which is directed to a combination of a refrigerant and a lubricant. Mexichem Amanco Holding S.A. (“Mexichem Amanco”) and Daikin Industries, Ltd. (“Daikin”) (together, “Mexichem”) filed requests for inter partes reexamination.
During the reexamination, the Examiner rejected the claims of the ‘366 patent as obvious under 35 U.S.C. § 103. The PTAB upheld the rejection, noting that the primary reference teaching the refrigerant combined with the secondary reference teaching the lubricant and using similar (but not identical) refrigerants would have been known in the art. Honeywell submitted evidence that this particular combination of separately unstable ingredients was unexpectedly stable, and that this particular refrigerant was disfavored for its instability. The PTAB held that disclosure of the refrigerant rendered its inherent properties (namely, its ozone-friendliness) irrelevant to the obviousness analysis and could not confer patentable weight to the mixture. The PTAB then held that, based on the refrigerant’s inherent properties previously held irrelevant, the combination was merely a tradeoff of the refrigerant’s disadvantages (e.g., instability) and its advantages (e.g., cooling effect).
The Court held that the PTAB “committed legal error by improperly relying on inherency to find obviousness and in its analysis of motivation to combine the references.” At the very least, the PTAB’s analysis was inconsistent: (1) the refrigerant’s instability was an inherent property, and could not confer patentable weight, but (2) Honeywell’s arguments on secondary considerations were unpersuasive based on the inherent properties of the refrigerant. That is, the instability was both irrelevant to patentability and the precise reason why the combination was unpatentable. The Court held that the analysis should focus on whether the properties are unexpected, not inherent. In dismissing Honeywell’s evidence, the PTAB held that unpredictability lead to obviousness; the Court vigorously disagreed, noting that unpredictability leads to nonobviousness, and predictability leads to obviousness. Patent owners merely need to establish that the results would have been unexpected to rebut a prima facie case of obviousness. The Court vacated and remanded to the PTAB to determine the factual questions arising from the evidence and the motivation to combine the references.
Lessons for Practice
The Federal Circuit has handed patent owners a tool that both supports extrinsic evidence and emphasizes the Examiner’s burden to affirmatively show obviousness. When presenting evidence on secondary considerations to overcome obviousness rejections, emphasize the unexpected nature of the claimed invention. Remind the Examiner of the burden to show a reasonable expectation of success, and be wary of improper shifting of the burden onto the patent owner. Your arguments should ultimately show that unpredictability in the prior art leads to nonobviousness of your invention.