Honeywell International, Inc. v. Mexichem Amanco Holdings - Revenge of the Chemist Judges II

Before reading this post, please read my post of July 19, 2017 about Millennium Pharms. v. Sandoz, and you will “get” the title. Judges Lourie and Newman both dissented from refusal of the court to rehear the holding in Schering v. Geneva en banc. That panel decision held that inherent anticipation can be found when the missing claim element is, in fact, necessarily present when a prior art process is carried out, even if this fact was unknown to the POSA when the application was filed.

In Millennium, the question turned on the standards required for a finding of “inherent obviousness”. Judge Newman, writing for the panel, held that inherent obviousness could not be applied to invalidate a claim – in this case to a previously unknown product that was accidently produced during lyophilization of an unstable active and the bulking agent, mannitol – without a full-blown obviousness analysis of the claimed compound, even if the product was always produced upon co-lyophilization of the active and mannitol.

In Honeywell v Mexichem, Appeal No. 2016-1996 (Fed. Cir. Aug. 1, 2017), the Fed. Cir. Panel, Judge Lourie writing, applied the same rigorous standard to evaluate the obviousness of claims to a heat transfer composition that is a mixture of at least about 50 wt-% of “HFO-1234yl”, a tetraflouropropene,(“HFO”) and at least one polyalkylene glycol lubricant, having a certain viscosity (“PAG”). (U.S. Pat. No. 7,534,366).

The Board, in IPR, found the claims obvious in view of the cited art, inter alia dismissing Honeywell’s argument that the combination exhibited unexpectedly favorable properties: “The Board found that Inagaki expressly discloses HFO as possessing ozone-firedlilness and other favorable characteristics of use in heat transfer compositions, and that its stability and miscibility with a PAG lubricant are ‘inherent to the refrigerant'[the HFO]”…. The Board went on argue that Honeywell’s evidence of unexpected stability ‘do[es] not contradict the fact that stability is an inherent property of this refrigerant/lubricant pair'”[emphasis supplied].

You can probably see where this is going by now. The Fed. Cir. panel held that the Board committed legal error by improperly relying on inherency to find obviousness and in its analysis of motivation to combine references:

“We have previously stated that the use of inherency in the context of obviousness must be carefully circumscribed because ‘that 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, it whether or not 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 to be nonobvious [citations omitted]. Thus, the Board here, in dismissing properties of the claimed composition as merely inherent, without further consideration as to unpredictability and unexpectedness, erred as a matter of law.”

But wait, there’s more! For example, the panel criticized the Board for accepting evidence of unpredictability, but then concluding that the POSA would employ routine testing to arrive at the invention. This effectively, and wrongly, placed the burden on Honeywell to prove an expectation of failure: “Rather, the patent owner need only establish that the results would have been unexpected to the [POSA] at the time of invention, or ‘much greater than would have been predicted.'” With respect to the argument that “routine testing” would have led to the invention, the panel reminded the Board that how the invention was achieved shall not be negated by the manner in which the invention was made.

Lots of classic obviousness case law is cited, much of it from the chemical arena, going all the way back to In re Papesch (CCPA 1963) and In re Fay (CCPA 1965). This lengthy opinion is essentially a monograph on the use of unexpected results to establish non-obviousness. If you don’t remember the details of this opinion, the single most important takeaway is:

“Even inherent properties, to the extent they demonstrate results beyond what would have been expected to [the POSA]…must be considered accordingly.” This decision will remind, or even teach you, how to prosecute “accordingly.”

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