Inquiry into Unexpectedness is Essential Even for Determining Obviousness in Inherency

This article is a follow up of my recent post entitled “Inherency in Obviousness – What is the Correct Standard?”  That post questioned determining inherent obviousness based primarily on asking if the missing limitation “flows naturally from” or is “necessarily present” in the prior art since that essentially amounts to determining inherent anticipation.  At about the same time, the Federal Circuit decided Honeywell International, Inc. v. Mexichem Amanco Holdings S.A. DE C.V., Appeal No. 2016-1996, Fed. Cir., August 1, 2017 (hereinafter “Honeywell”) and provided much needed clarification regarding whether unexpectedness of the missing, but inherent, limitation must be considered in determining obviousness.  Inherent obviousness, as noted in the previous article, was discussed at length by the Federal Circuit its opinion in Par Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1195 (Fed. Cir. 2014).  That discussion was framed mainly around determining whether, based on the combined teachings of the prior art, there was evidence that the missing limitation was “necessarily present,” and not around considerations of unpredictability or unexpectedness.  The risk of basing inherent obviousness determination on whether the missing/unknown limitation is necessarily present without also considering if a skilled artisan would have expected the limitation to be present is to guarantee an outcome of obviousness no matter how unexpected or unpredictable it would have been for a skilled artisan to arrive at the invention.

An opportunity for addressing the role of unexpected results in the determination of inherent obviousness arose recently in Millennium Pharmaceuticals v. Sandoz, Inc., Appeal No. 15-2066, Fed. Cir., July 17, 2017 (hereinafter “Millennium”).  In Millennium, challenger Sandoz, while admitting that the production of the claimed compound was unexpected, maintained that it was “inevitable,” and inherent, and as such, not inventive.  Disagreeing, the Federal Circuit determined that the compound, and the ensuing pharmaceutical efficacy and benefit negated obviousness.  Honeywell follows in a vein similar to Millennium, but is nonetheless noteworthy because of the clarity with which the Federal Circuit lays out the role of unpredictability and unexpectedness in determining obviousness in the context of inherency.  The court’s reasoning is explained below.

At issue in Honeywell was U.S. Patent 7,534,366 (‘366 patent) owned by Honeywell.  The claims of the ‘366 patent were directed to a heat transfer composition for use in an air conditioning system.  The composition included the refrigerant 1,1,1,2-tetrafluoropropene (HFO-1234yf) and at least one poly alkylene glycol (PAG) lubricant.  Mexichem Amanco Holdings and Daikin Industries, Ltd. (collectively “Mexichem”) requested inter partes reexamination of the ‘366 patent.  The Examiner rejected the claims based on a combination of a Japanese patent (Inagaki) expressly disclosing HFO-1234yf and one of three other references teaching use of PAG lubricants with HFC refrigerants.  HFO refrigerants differ from HFC refrigerants in that the former are unsaturated while the latter are saturated compounds.

On appeal, Honeywell argued that Inagaki does not teach the use of HFO-1234yf with any particular lubricant, much less a PAG lubricant, and that such a combination would not have been obvious to a skilled artisan.  Further, Honeywell submitted evidence that HFO refrigerants were disfavored at the time of the invention as they were known to be reactive and unstable, and that PAG lubricants were also understood to be hygroscopic and thus unstable.  Additionally, Honeywell submitted evidence of secondary considerations including (i) that HFO-1234yf was unexpectedly stable in combination with PAGs, and (ii) that the combination possessed unexpected miscibility.  Thus, according to Honeywell, both the ex ante unpredictability of the stability/miscibility of HFO-1234yf with PAGs, as well as the ex post unexpected results weighed against the Board’s obviousness determination.

The Board affirmed the Examiner’s finding of obviousness.  Most relevant to the present discussion, the Board rejected Honeywell’s arguments, namely, that the refrigerant-lubricant combination was unobvious because of (i) the unpredictability of finding suitable lubricants for unsaturated HFO refrigerants based on information that related only to saturated HFC refrigerants, and (ii) the unexpected stability and miscibility of HFO-1234yf with PAG lubricants.  The Board found that Inagaki expressly disclosed HFO-1234yf as possessing favorable characteristics for use in heat transfer compositions, and that its stability and miscibility with a PAG lubricant were “inherent properties of an otherwise known refrigerant,”  and as such, could not confer patentable weight to the composition (emphasis added).

The Federal Circuit reversed.  Indeed, it 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 found that the Board erred in relying on inherency to dismiss evidence showing unpredictability in the art in rejecting Honeywell’s argument that a skilled artisan would not have been motivated to combine the references with a reasonable expectation of success.  It referred to an earlier opinion [citations omitted] to state 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.”

Especially, it pointed out that, “[w]hat 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 to be nonobvious. [citations omitted].”  (Emphasis added).  In other words, in dismissing properties of the claimed composition as merely inherent, without also considering its unpredictability and unexpectedness, the Board was found to have erred as a matter of law.”

Honeywell affords two additional takeaways.  Ironically, in its obviousness analysis the Board, while conceding that evidence put forward by Honeywell established the “overall unpredictability” in the art, nonetheless dismissed the evidence on the ground that due to the unpredictability regarding stability of the claimed combination, “routine testing” would have led to its discovery.  This, said the court amounted to an argument for shifting the burden to Honeywell to establish that a skilled artisan would have expected failure.  The court reminded that in an inter partes reexamination involving obviousness, the standard is not whether the patent owner can persuasively show that a skilled artisan would have expected failure.  Rather, the Examiner has the burden of showing that the skilled artisan would have had a motivation to combine the references with a reasonable expectation of success.  The court further explained that even when rebutting a prima facie case for obviousness with evidence of unexpected results a patent owner need not demonstrate that a skilled artisan would have expected failure.  The only requirement is to establish that the results would have been unexpected to a skilled artisan at the time of invention, or much greater than would have been predicted.  Finally, with regard to “routine-testing”, the court pointed out that 35 U.S.C. § 103 provides that “[p]atentability shall not be negated by the manner in which the invention was made,” a provision enacted to ensure that routine experimentation does not necessarily preclude patentability.

Honeywell decision should inspire confidence in those facing obviousness rejections in the context of inherency if they can provide evidence of unpredictability and/or unexpectedness to the patent office.

The Author

Sanjeev Mahanta, Ph.D., J.D.

Sanjeev Mahanta, Ph.D., J.D. is an attorney in the Patent group of Arent Fox, LLP. Sanjeev’s practice focuses on prosecution of domestic and international patent applications. Sanjeev helps clients obtain patents across a wide technology spectrum including biotechnology, pharmaceuticals, chemistry, materials science, and medical device.

For more information or to contact Sanjeev, please visit his Firm Profile Page.

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