Honeywell International Inc. v. Mexichem Amanco Holding S.A. De C.V. , 865 F.3d 1348 ( 2017 )


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  •   United States Court of Appeals
    for the Federal Circuit
    ______________________
    HONEYWELL INTERNATIONAL INC.,
    Appellant
    v.
    MEXICHEM AMANCO HOLDING S.A. DE C.V.,
    DAIKIN INDUSTRIES, LTD.,
    Appellees
    ______________________
    2016-1996
    ______________________
    Appeal from the United States Patent and Trademark
    Office, Patent Trial and Appeal Board in Nos. 95/002,189,
    95/002,204.
    ______________________
    Decided: August 1, 2017
    ______________________
    GREGG F. LOCASCIO, Kirkland & Ellis LLP, Washing-
    ton, DC, argued for appellant. Also represented by
    WILLIAM H. BURGESS, NOAH SAMUEL FRANK; JOSEPH
    MICHAEL SKERPON, Banner & Witcoff, Ltd., Washington,
    DC.
    JOSEPH A. KROMHOLZ, Ryan, Kromholz & Manion,
    S.C., Milwaukee, WI, argued for appellee Mexichem
    Amanco Holding S.A. de C.V. Also represented by
    PATRICK J. FLEIS.
    2     HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    ANTHONY F. LO CICERO, Amster, Rothstein &
    Ebenstein LLP, New York, NY, argued for appellee Dai-
    kin Industries, Ltd. Also represented by MARION P.
    METELSKI.
    ______________________
    Before LOURIE, REYNA, and WALLACH, Circuit Judges.
    Opinion for the court filed by Circuit Judge LOURIE.
    Opinion dissenting-in-part filed by Circuit Judge
    WALLACH.
    LOURIE, Circuit Judge.
    Honeywell International, Inc. (“Honeywell”) appeals
    from a decision of the U.S. Patent and Trademark Office
    (“the PTO”) Patent Trial and Appeal Board (“the Board”)
    affirming the Examiner’s rejection, in two merged inter
    partes reexaminations, of claims 1–26, 31–37, 46–49, 58,
    59, 61–68, 70–75, 80, and 81 of U.S. Patent 7,534,366
    (“the ’366 patent”) under 35 U.S.C. § 103. See Mexichem
    Amanco Holding S.A. De C.V. v. Honeywell Int’l Inc., No.
    2015-006430, 
    2016 WL 1254603
    (P.T.A.B. Mar. 29, 2016)
    (“Decision”). Because the Board erred in its analysis, and
    hence its decision, we vacate and remand.
    BACKGROUND
    Honeywell owns the ’366 patent, which 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. See, e.g.,
    ’366 patent col. 13 ll. 37–45. Claim 1 is illustrative and
    reads as follows:
    A heat transfer composition for use in an air con-
    ditioning system comprising:
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.   3
    (a) at least about 50% by weight of 1,1,1,2-
    tetrafluoropropene (HFO-1234yf) having no sub-
    stantial acute toxicity; and
    (b) at least one poly alkylene glycol lubricant in
    the form of a homopolymer or co-polymer consist-
    ing of 2 or more oxypropylene groups and having a
    viscosity of from about 10 to about 200 centistokes
    at about 37 °C.
    
    Id. (emphases added).
         Mexichem Amanco Holding S.A. DE C.V. (“Mexichem
    Amanco”) and Daikin Industries, Ltd. (“Daikin”) (togeth-
    er, “Mexichem”) filed requests for inter partes reexamina-
    tion of the ’366 patent, which the PTO granted and
    merged into a consolidated proceeding. During the reex-
    amination, the Examiner rejected claims 1–26, 31–37, 46–
    49, 58, 59, 61–68, 70–75, 80, and 81 of the ’366 patent as
    obvious over Japanese Patent H04-110388 (“Inagaki”) in
    view of either: (1) U.S. Patent 4,755,316 (“Magid”);
    (2) Acura Service Bulletin No. 92-027 (“Acura”) and
    “Patentee’s Admissions” 1; or (3) U.S. Patent 6,783,691
    (“Bivens”). The Examiner found that Inagaki expressly
    discloses HFO-1234yf and that each of the secondary
    references—Magid, Acura/Patentee’s Admissions, and
    Bivens—teaches the use of PAG lubricants with HFC
    refrigerants. Thus, the Examiner concluded that the
    1    During original prosecution of the ’366 patent, in
    the Supplemental Response, filed November 10, 2008, at
    page 20, Honeywell made a statement that a well-known
    lubricant, ND-8, meets the structural requirements of the
    claimed lubricant. See Decision, 
    2016 WL 1254603
    , at *5.
    The Examiner relied on this statement by Honeywell in
    combination with Acura, which teaches the use of ND-8
    with saturated HFC refrigerants. See 
    id. 4 HONEYWELL
    INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    claims would have been obvious over the cited prior art at
    the time of invention.
    Honeywell appealed to the Board, arguing 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 one of
    ordinary skill in the art. See Decision, 
    2016 WL 1254603
    ,
    at *5. Honeywell argued that Inagaki does not teach or
    suggest the use of a PAG lubricant with HFO-1234yf
    because it teaches that the HFO refrigerants can be
    combined with other, less environmentally-friendly refrig-
    erants, in order to “improve solubility,” thereby indicating
    that it teaches the combination of HFO refrigerants with
    immiscible lubricants, such as those commonly employed
    in the prior art. See 
    id. Further, Honeywell
    argued that
    Magid, Acura, and Bivens use “HFC” to refer only to
    saturated HFC refrigerants, not unsaturated (i.e., HFO)
    refrigerants. See 
    id. at *6.
        Honeywell submitted evidence that HFO refrigerants
    were disfavored at the time of the invention by those of
    skill in the art in that they were known to be reactive and
    unstable, and that PAG lubricants were also understood
    to be hygroscopic and thus unstable. See 
    id. Therefore, Honeywell
    argued, 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. It argued that one of ordinary skill
    would have expected the combination to result in peroxide
    formation that leads to degradation reactions of HFO
    compounds that are not possible with the prior art satu-
    rated HFC compounds. See 
    id. Honeywell also
    submitted
    evidence of secondary considerations—namely, the unex-
    pected stability of HFO-1234yf in combination with PAG
    lubricants over other similar refrigerants combined with
    PAGs; long-felt but unmet need for compositions having
    certain environmentally-favorable characteristics; and
    skepticism that such an environmentally-friendly compo-
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.    5
    sition existed, particularly one that also exhibits other
    desirable properties, such as low toxicity, stability, reac-
    tivity, and effectiveness. See 
    id. The Board
    affirmed the Examiner’s rejection of claims
    1–26, 31–37, 46–49, 58, 59, 61–68, 70–75, 80, and 81 of
    the ’366 patent as obvious. First, the Board found that
    PAGs were known lubricants for “HFC-based refrigera-
    tion systems,” as evidenced by Magid, Acura/Patentee’s
    Admissions, and Bivens. 
    Id. at *9.
    Thus, the Board
    concluded, because Inagaki teaches that the disclosed
    refrigerants, including HFO-1234yf, “do not have any
    problem with respect to their general characteristics (e.g.,
    compatibility with lubricants . . .),” it would have been
    obvious to combine HFO-1234yf with “known lubricants”
    such as PAGs. 
    Id. at *10
    (emphasis added) (internal
    quotation marks omitted). The Board explained that the
    known drawbacks of using HFO-1234yf, such as toxicity,
    flammability, reactivity, and so forth, would not have
    deterred one of ordinary skill from choosing HFO-1234yf,
    as taught by Inagaki, because such disadvantages would
    have been viewed as merely a “tradeoff” for the benefits
    touted by Inagaki—namely, “good cooling with little effect
    on the ozone.” 
    Id. at *8.
    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 its combination with a
    PAG lubricant by mere routine testing. 
    Id. at *10
    .
    Second, the Board rejected Honeywell’s argument that
    the claimed combination would not have been obvious
    because of the unpredictability of finding suitable lubri-
    cants for unsaturated HFO refrigerants based on infor-
    mation pertaining to saturated HFC refrigerants, or in
    light of the unexpected stability and miscibility of HFO-
    1234yf with PAG lubricants. 
    Id. The Board
    found that
    Inagaki expressly discloses HFO-1234yf as possessing
    ozone-friendliness and other favorable characteristics for
    use in heat transfer compositions, and that its stability
    6    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    and miscibility with a PAG lubricant are properties that
    are “inherent to the refrigerant.” 
    Id. at *7–8
    (emphasis in
    original). Thus, the Board concluded, the stability and
    miscibility of HFO-1234yf with a PAG lubricant are
    “inherent properties of an otherwise known refrigerant”
    that could not confer patentable weight to the claimed
    mixture. 
    Id. (emphasis added).
        Finally, the Board found Honeywell’s evidence of sec-
    ondary considerations to be unpersuasive because of a
    perceived lack of nexus between the evidence and the
    claimed composition. 
    Id. at *11.
    The Board explained
    that most of Honeywell’s evidence shows that a “particu-
    lar refrigerant” possessed desirable properties long sought
    after in the art, but that the refrigerant—HFO-1234yf—
    was known in the art. 
    Id. at *12
    (emphasis in original).
    Because the claims are directed to the combination of
    HFO-1234yf with a PAG lubricant, the Board concluded
    that Honeywell’s evidence lacked a nexus to the claimed
    composition. See 
    id. The Board
    also rejected Honeywell’s evidence of un-
    expected stability/miscibility of the claimed combination
    in light of JP H5-85970A (“Omure”). The Board disagreed
    with the Examiner, who reasoned that Honeywell’s evi-
    dence of unexpected stability “do[es] not contradict the
    fact that stability is an inherent property of the refriger-
    ant/lubricant pair.” 
    Id. at *13
    (emphasis added) (internal
    quotation marks omitted). The Board acknowledged that
    “[e]ven inherent properties, to the extent that they
    demonstrate results beyond what would have been ex-
    pected to one of ordinary skill in the art, particularly
    superior results that demonstrate more than a mere
    improvement in a property, are evidence that the inven-
    tion is non-obvious and must be considered accordingly.”
    
    Id. (citing In
    re Geisler, 
    116 F.3d 1465
    , 1470 (Fed. Cir.
    1997)).
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.     7
    Yet the Board found Honeywell’s evidence to be un-
    persuasive because Omure states that a different unsatu-
    rated propene HFO compound has “relatively superior
    thermal stability” in PAG. 
    Id. (internal quotation
    marks
    omitted). Thus, the Board concluded that, although
    Honeywell’s evidence persuasively shows the unpredicta-
    bility of “how various refrigerants would have reacted
    with various lubricants,” Omure provides evidence 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.” 
    Id. at *14
    (em-
    phases added). Thus, the Board found that, due to the
    “overall unpredictability as to stability in the art,” one of
    ordinary skill would have arrived at the claimed combina-
    tion by mere routine testing. 
    Id. at *15.
        Honeywell timely appealed to this court. We have ju-
    risdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
    DISCUSSION
    We review the Board’s legal determinations de novo,
    In re Elsner, 
    381 F.3d 1125
    , 1127 (Fed. Cir. 2004), and the
    Board’s factual findings underlying those determinations
    for substantial evidence, In re Gartside, 
    203 F.3d 1305
    ,
    1316 (Fed. Cir. 2000). A finding is supported by substan-
    tial evidence if a reasonable mind might accept the evi-
    dence to support the finding. Consol. Edison Co. v.
    NLRB, 
    305 U.S. 197
    , 229 (1938). Obviousness is a ques-
    tion of law, based on underlying factual findings, includ-
    ing what a reference teaches, whether a person of
    ordinary skill in the art would have been motivated to
    combine references, and any relevant objective indicia of
    nonobviousness. Apple Inc. v. Samsung Elecs. Co., 
    839 F.3d 1034
    , 1047–48, 1051 (Fed. Cir. 2016) (en banc).
    On appeal, Honeywell argues that the Board erred in
    (1) finding a motivation to combine the references with a
    reasonable expectation of success, (2) rejecting Honey-
    well’s objective evidence, and (3) relying on a new ground
    8    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    of rejection when it relied on Omure, without giving
    Honeywell notice and opportunity to respond. We discuss
    each issue in turn.
    I
    We first consider whether the Board erred in finding
    that one of ordinary skill in the art would have been
    motivated to combine the references with a reasonable
    expectation of success and in considering Honeywell’s
    evidence of unexpected results.
    Honeywell argues that the Board improperly relied on
    hindsight to find that one of ordinary skill would have
    had a reasonable expectation of success in combining
    HFO-1234yf with PAG lubricants. Honeywell provided
    evidence that at the time of the invention, HFO refriger-
    ants 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. Honeywell also points to evidence of the unex-
    pected miscibility of the claimed combination, and argues
    that the Board improperly disregarded it as an “inherent
    property” of the refrigerant, when in fact miscibility is a
    property of the combination. Thus, Honeywell argues
    that both the ex ante unpredictability of the stabil-
    ity/miscibility of HFO-1234yf with PAGs, as well as the ex
    post unexpected results weigh against the Board’s obvi-
    ousness determination. Honeywell also challenges the
    Board’s reasoning concerning inherency in making the
    obviousness determination.
    Mexichem responds that the Board’s findings were
    supported by substantial evidence. Mexichem contends
    that the Board properly found a reasonable expectation of
    success, emphasizing that “absolute predictability of
    success in combining references is not required” for an
    obviousness determination. Appellee’s Br. 36 (emphasis
    added) (citing Pfizer, Inc. v. Apotex, Inc., 
    480 F.3d 1348
    ,
    1364 (Fed. Cir. 2007)). Mexichem argues that Inagaki
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.   9
    discloses HFO-1234yf as one of five preferred embodi-
    ments and generally teaches its use with lubricants. It
    asserts that one of ordinary skill would have been moti-
    vated to combine HFO-1234yf with PAG lubricants, which
    were known to be used with HFC-based refrigerants.
    Thus, Mexichem urges, there would have been a reasona-
    ble expectation of success in combining the references,
    and the Board’s findings were supported by substantial
    evidence.
    We agree with Honeywell that the Board’s analysis
    was flawed. The Board committed legal error by improp-
    erly relying on inherency to find obviousness and in its
    analysis of motivation to combine the references.
    As an initial matter, we find the Board’s analysis to
    be internally inconsistent. Early in its analysis, the
    Board rejected Honeywell’s argument concerning unex-
    pected results and its argument that the unpredictability
    of the art weighs against finding a motivation to combine
    the references with a reasonable expectation of success.
    The Board found that the claimed combination’s stabil-
    ity/miscibility is an inherent property of HFO-1234yf and
    thus cannot confer patentable weight to the composition.
    See Decision, 
    2016 WL 1254603
    , at *8. Yet, when the
    Examiner used similar reasoning in responding to Hon-
    eywell’s evidence of secondary considerations, the Board
    rejected that reasoning, acknowledging that inherent
    properties must be considered if they demonstrate unex-
    pected and nonobvious results. See 
    id. at *13.
        Thus, on the one hand, the Board dismissed Honey-
    well’s evidence regarding the unpredictability and unex-
    pected properties of the claimed combination by
    characterizing them as “inherent” and of non-patentable
    weight. See 
    id. at *8.
    On the other hand, the Board later
    credited that very same evidence, conceding that it per-
    suasively established the “overall unpredictability” in the
    art, but then dismissed it for other reasons—namely, that
    10   HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    because of the unpredictability as to stability of the
    claimed combination, “routine testing” would have led to
    its discovery. 
    Id. at *14
    –15.
    Each part of that internally inconsistent analysis was
    individually flawed. First, the Board erred in relying on
    inherency to dismiss evidence showing unpredictability in
    the art—evidence which it later acknowledged did per-
    suasively demonstrate unpredictability—in order to reject
    Honeywell’s argument that one of ordinary skill would not
    have been motivated to combine the references with a
    reasonable expectation of success. See Decision, 
    2016 WL 1254603
    , at *8 (“[I]nherent properties of refrigerants
    include their specific toxicity [and] miscibility, . . . whether
    or not these properties are predictable.” (emphasis added)),
    *15 (“[T]he evidence presented by Patent Owner as a
    whole shows the unpredictability of how various refriger-
    ants would have reacted with various lubricants.” (em-
    phasis added)).
    We have previously stated that the use of inherency
    in the context of obviousness must be carefully circum-
    scribed because “[t]hat which may be inherent is not
    necessarily known” and that which is unknown cannot be
    obvious. In re Rijckaert, 
    9 F.3d 1531
    , 1534 (Fed. Cir.
    1993) (internal quotation marks omitted) (quoting In re
    Spormann, 
    363 F.2d 444
    , 448 (1966)); see also PAR
    Pharm., Inc. v. TWI Pharm., Inc., 
    773 F.3d 1186
    , 1195
    (Fed. Cir. 2014) (distinguishing a prior case finding obvi-
    ousness based on inherency because, in that case, “neither
    party disputed that the [claimed features] were expected
    in light of the dosages disclosed in the prior art” (empha-
    sis added)).
    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 com-
    position, but unexpected properties may cause what may
    appear to be an obvious composition to be nonobvious.
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.   11
    See, e.g., In re Papesch, 
    315 F.2d 381
    , 391 (C.C.P.A. 1963)
    (emphasizing that “[f]rom the standpoint of patent law, a
    compound and all of its properties are inseparable; they
    are one and the same thing,” and yet in comparing the
    similarity of the one compound to another, “[t]here is no
    basis in law for ignoring any property in making such a
    comparison”). Thus, the Board here, in dismissing prop-
    erties of the claimed invention as merely inherent, with-
    out further consideration as to unpredictability and
    unexpectedness, erred as a matter of law.
    Second, the Board erred in dismissing Honeywell’s ev-
    idence 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 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 Honey-
    well did not persuasively establish that one of ordinary
    skill would have expected failure. 
    Id. at *14
    –15 (“[T]he
    evidence presented by Patent Owner as a whole shows the
    unpredictability of how various refrigerants would have
    reacted with various lubricants. Thus, . . . the skilled
    artisan would no more have expected failure . . . than
    would have expected success.” (emphases added)). The
    Board rejected Honeywell’s evidence, concluding that,
    because there would have been no reasonable expectation
    of success, one of ordinary skill would have arrived at the
    claimed combination by mere “routine testing.” 
    Id. (find- ing
    Honeywell’s stability data to be unpersuasive “in light
    of the evidence of routine testing and overall unpredicta-
    bility as to stability in the art” (emphases added)).
    Thus, the Board seems to have determined that, be-
    cause 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 test-
    12   HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    ing” would have led the skilled artisan to the claimed
    combination. 
    Id. In an
    inter partes reexamination involving obvious-
    ness, 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 moti-
    vation to combine the references with a reasonable expec-
    tation of success. See, e.g., Redline Detection, LLC v. Star
    Envirotech, Inc., 
    811 F.3d 435
    , 449 (Fed. Cir. 2015)
    (“When asserting that a claimed invention would have
    been obvious, that party must demonstrate . . . that a
    skilled artisan would have had reason to combine the
    teaching of the prior art references to achieve the claimed
    invention, and that the skilled artisan would have had a
    reasonable expectation of success from doing so.” (empha-
    sis added) (internal quotation marks omitted)); Rambus
    Inc. v. Rea, 
    731 F.3d 1248
    , 1255 (Fed. Cir. 2013) (revers-
    ing the Board’s obviousness determination where “[t]he
    Board erroneously placed the burden on [the Patent
    Owner] to prove that its claims were not obvious” and
    emphasizing that “[i]n reexamination proceedings, ‘a
    preponderance of the evidence must show nonpatentabil-
    ity before the PTO may reject the claims of a patent
    application’” (citing Ethicon, Inc. v. Quigg, 
    849 F.2d 1422
    ,
    1427 (Fed. Cir. 1988)); In re Jung, 
    637 F.3d 1356
    , 1365–66
    (Fed. Cir. 2011) (explaining that while “the applicant
    must identify to the Board what the examiner did
    wrong, . . . the examiner retains the burden to show
    invalidity”)).
    The Board made what amounts to a finding that one
    of ordinary skill would not have expected success, because
    Honeywell’s evidence persuasively established the “over-
    all unpredictability” in the art, but then glossed over that
    finding with a “routine testing” rationale because Honey-
    well did not persuasively prove an expectation of failure.
    See Decision, 
    2016 WL 1254603
    , at *15.
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.    13
    That is reverse reasoning. Unpredictability of results
    equates more with nonobviousness rather than obvious-
    ness, 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.
    Even when presenting evidence of unexpected results
    to “rebut” an Examiner’s prima facie case for obviousness,
    a patent owner need not demonstrate that one of ordinary
    skill would have expected failure—rather, the patent
    owner need only establish that the results would have
    been unexpected to one of ordinary skill at the time of
    invention, or “much greater than would have been pre-
    dicted.” Leo Pharm. Prod., Ltd. v. Rea, 
    726 F.3d 1346
    ,
    1358 (Fed. Cir. 2013) (“Unexpected results are useful to
    show the improved properties provided by the claimed
    compositions are much greater than would have been
    predicted.” (internal quotation marks omitted)); In re
    Baxter Travenol Labs., 
    952 F.2d 388
    , 392 (Fed. Cir. 1991)
    (“[W]hen unexpected results are used as evidence of
    nonobviousness, the results must be shown to be unex-
    pected compared with the closest prior art.”); In re De
    Blauwe, 
    736 F.2d 699
    , 706 n.8 (Fed. Cir. 1984) (“A proper
    showing of unexpected results will rebut a prima facie
    case of obviousness.”).
    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. See, e.g., In re Saether, 
    492 F.2d 849
    , 854 (C.C.P.A. 1974) (“In his argument that ‘mere
    routine experimentation’ was involved in determining the
    optimized set of characteristics, the solicitor overlooks the
    last sentence of 35 U.S.C. § 103. . . Here we are concerned
    with the question of whether the claimed invention would
    14   HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    have been obvious at the time it was made to a person
    having ordinary skill in the art—not how it was
    achieved.” (internal citation omitted)); In re Fay, 
    347 F.2d 597
    , 602 (C.C.P.A. 1965) (“[W]e do not agree that ‘routine
    experimentation’ negatives patentability. The last sen-
    tence of section 103 states that ‘patentability shall not be
    negatived by the manner in which the invention was
    made.’”).
    We thus conclude that the Board’s analysis was legal-
    ly erroneous in its consideration of inherency, in conclud-
    ing that unpredictability indicates obviousness, and in
    rejecting Honeywell’s objective evidence. Because finding
    a motivation to combine the references and consideration
    of objective evidence are fact questions, we vacate and
    remand for the Board to make determinations consistent
    with this opinion.
    II
    We next consider whether the Board relied on a new
    ground of rejection, when it raised Omure as a basis for
    dismissing Honeywell’s evidence of unexpected results.
    During reexamination, both Mexichem Amanco and
    Daikin mentioned Omure in their “Third Party Requester
    Comments” after the Non-final Action and the Action
    Closing Prosecution, and Mexichem Amanco proposed a
    rejection based on Omure. Joint Appendix 1365, 1567,
    8588. However, the Examiner never addressed those
    comments or entered the proposed rejection. Yet in its
    review of Honeywell’s evidence of unexpected results, the
    Board relied on Omure as evidence that, although one of
    ordinary skill would not have expected success in combin-
    ing HFO-1234yf with a PAG lubricant, one would also not
    have expected failure. See Decision, 
    2016 WL 1254603
    , at
    *14 (“[A]s evidenced by Omure, the skilled artisan would
    no more have expected failure with respect to the stability
    of combining hydrofluoroolefins with PAG than would
    have expected success.” (emphases added)). The Board
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.   15
    found Honeywell’s evidence to be unpersuasive of nonob-
    viousness, based on Omure’s teachings. The question
    before us is whether that reliance on Omure constituted a
    new ground of rejection.
    Under the Administrative Procedure Act (“APA”), the
    PTO must ensure that the parties before it are “fully and
    fairly treated at the administrative level.” Rambus Inc. v.
    Rea, 
    731 F.3d 1248
    , 1255 (Fed. Cir. 2013) (internal quota-
    tion marks omitted). The APA requires the PTO “to
    provide prior notice . . . of all matters of fact and law
    asserted prior to an appeal hearing before the Board.” 
    Id. (internal quotation
    marks omitted). Such a framework
    “limits the Board’s ability to rely on different grounds
    than the examiner.” 
    Id. When considering
    whether the Board issued a new
    ground of rejection, the “ultimate criterion” is “whether
    applicants have had fair opportunity to react to the thrust
    of the rejection.” 
    Id. (internal quotation
    marks omitted).
    While the Board need not “recite and agree with the
    examiner’s rejection in haec verba” to avoid issuing a new
    ground of rejection, mere reliance on the same statutory
    basis and the same prior art references, alone, is insuffi-
    cient to avoid making a new ground of rejection when the
    Board “relies on new facts and rationales not previously
    raised to the applicant by the examiner.” 
    Id. (emphasis added)
    (internal quotation marks omitted). A new ground
    of rejection, however, generally will not be found based on
    the Board “further explain[ing] the examiner’s rejection”
    or the Board’s thoroughness in responding to an appli-
    cant’s argument. See In re Jung, 
    637 F.3d 1356
    , 1364–65
    (Fed. Cir. 2011). Whether the Board relied on a new
    ground of rejection is a legal issue that we review de novo.
    
    Rambus, 731 F.3d at 1343
    .
    Honeywell argues that the Board relied on a new
    ground of rejection in its reliance on Omure, which was
    never mentioned or relied upon by the Examiner. Hon-
    16   HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    eywell asserts that, during reexamination, the patent
    owner responds only to the Examiner’s rejections, not to
    the “unacknowledged arguments” of the Requesters.
    Appellant’s Br. 41. Therefore, Honeywell contends, even
    though Mexichem raised Omure with the Examiner, “the
    Examiner did not have a position on Omure, so Honeywell
    could not address that position.” 
    Id. at 43.
    Thus, Honey-
    well continues, it did not have notice of or an opportunity
    to respond to Omure, and the Board’s reliance on it con-
    stituted a new ground of rejection.
    Mexichem responds that the Board relied on Omure
    only to explain why Honeywell’s evidence of secondary
    considerations did not support a determination of nonob-
    viousness. Ultimately, Mexichem argues, “the thrust of
    the Board’s analysis of secondary considerations was the
    same as that of the Examiner.” Appellee’s Br. 25–26.
    We disagree. The Board’s analysis was different from
    that of the Examiner. During its analysis of Honeywell’s
    evidence of secondary considerations, the Board expressly
    stated that it “disagree[d]” with the Examiner’s treatment
    of that evidence. See Decision, 
    2016 WL 1254603
    , at *13
    (“The Examiner determined that the stability data ‘do not
    contradict the fact that the stability is an inherent prop-
    erty of the refrigerant/lubricant pair.’ We disagree. Even
    inherent properties, to the extent that they demonstrate
    results beyond what would have been expected to one of
    ordinary skill in the art . . . must be considered according-
    ly.” (emphasis added)).
    The Board instead concluded that Honeywell’s evi-
    dence persuasively shows the “overall unpredictability” of
    the art, but that Omure is evidence that one of ordinary
    skill would not have expected failure in combining HFO-
    1234yf with PAG lubricants. 
    Id. at *14
    –15. Accordingly,
    the Board rejected the Examiner’s conclusions regarding
    the evidence of unexpected results and instead relied on
    Omure to find the evidence unpersuasive.
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.       17
    Thus, it is not correct that “the thrust of the Board’s
    analysis of secondary considerations was the same as that
    of the Examiner,” Appellee’s Br. 25–26, when the Board
    expressly disagreed with the Examiner’s reasons and
    instead stated reasons of its own, based on Omure. As in
    prior cases where we have found a new ground of rejec-
    tion, the Board’s findings regarding Omure here were
    “completely new” and the Board did more than merely
    “elaborate on the examiner’s findings with more detail.”
    
    Rambus, 731 F.3d at 1256
    (internal quotation marks
    omitted). It expressly rejected the Examiner’s findings
    and then articulated findings of its own.
    Furthermore, it cannot be said that Honeywell had a
    “fair opportunity to react to the thrust of the rejection,” as
    premised on Omure. 
    Id. at 1255.
    Mexichem raised
    Omure with the Examiner, who did not adopt or respond
    to that argument. As Honeywell notes, during reexami-
    nation, the patent owner responds to the Examiner’s
    reasoning, not to the Requesters’ unadopted arguments.
    Thus, because the Examiner did not credit Omure’s
    teachings in issuing the rejections, Honeywell had no
    reason to respond to Mexichem’s arguments regarding
    Omure. We have held in an original application setting
    that “[i]t is crucial that the examiner issue a rejec-
    tion . . . so the applicant is on notice that it is obligated to
    respond.” In re Stepan Co., 
    660 F.3d 1341
    , 1344–45 (Fed.
    Cir. 2011) (emphasis added). Moreover, “[a] new ground
    of rejection is not negated by the fact that the Board is
    responding to [a party’s] argument.” In re Biedermann,
    
    733 F.3d 329
    , 338 (Fed. Cir. 2013). “Notice does not focus
    on the applicant’s arguments divorced from the examin-
    er’s rejections of record that are actually appealed to the
    Board. Instead, it focuses on the ‘adverse decisions of
    examiners’ during prosecution which form the basis of the
    Board’s scope of review.” 
    Stepan, 660 F.3d at 1346
    (em-
    phasis added) (citing 35 U.S.C. § 6(b)). Thus, even though
    Mexichem raised Omure with the Examiner, the Examin-
    18    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    er never relied upon, or even mentioned, Omure, so Hon-
    eywell was not on notice that it needed to respond to that
    argument.
    In sum, we conclude that the Board’s reliance on
    Omure constituted a new ground of rejection. We there-
    fore vacate the Board’s decision and remand with instruc-
    tions to designate its rejection as a new ground of
    rejection, if it intends to continue relying on Omure in
    evaluating Honeywell’s appeal.
    Honeywell separately argues that the Examiner erred
    in rejecting dependent claims 36, 37, 46–49, 70, and 75.
    However, because we find the Board’s analysis of the
    representative independent claim legally flawed, we need
    not address those separate arguments.
    CONCLUSION
    We have considered the parties’ remaining arguments
    but find them to be unpersuasive. For the foregoing
    reasons, we vacate and remand the decision of the Board.
    VACATED AND REMANDED
    COSTS
    Costs to Honeywell.
    United States Court of Appeals
    for the Federal Circuit
    ______________________
    HONEYWELL INTERNATIONAL INC.,
    Appellant
    v.
    MEXICHEM AMANCO HOLDING S.A. DE C.V.,
    DAIKIN INDUSTRIES, LTD.,
    Appellees
    ______________________
    2016-1996
    ______________________
    Appeal from the United States Patent and Trademark
    Office, Patent Trial and Appeal Board in Nos. 95/002,189,
    95/002,204.
    ______________________
    WALLACH, Circuit Judge, dissenting-in-part.
    The instant appeal concerns whether certain claims of
    U.S. Patent No. 7,534,366 (“the ’366 patent”) would have
    been obvious over various prior art references. In consoli-
    dated inter partes reexaminations, an examiner with the
    U.S. Patent and Trademark Office (“PTO”) concluded that
    the claims are invalid as obvious, basing its decision on
    twenty-eight different grounds of rejection. See J.A.
    2548–78. The PTO’s Patent Trial and Appeal Board
    (“PTAB”) affirmed the Examiner’s conclusions in full. See
    generally Mexichem Amanco Holding S.A. De C.V. v.
    Honeywell Int’l Inc., No. 2015-006430, 
    2016 WL 1254603
    (P.T.A.B. Mar. 29, 2016).
    2    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    I agree with the majority’s decision to vacate and re-
    mand the consolidated reexaminations to the PTAB,
    except for the discussion pertaining to a purported new
    ground of rejection issued by the PTAB. I respectfully
    disagree with the majority’s conclusion that the PTAB
    “relied on a new ground of rejection[] when it raised
    [Japanese Patent Application No. H05-85970 (‘Omure’)
    (J.A. 7956–60)] as a basis for dismissing Honeywell’s
    evidence of unexpected results” in its analysis of second-
    ary considerations. Maj. Op. 14. Rather, under the facts
    of this case, I conclude that the PTAB did not issue a new
    ground of rejection. The analysis below focuses solely on
    that point of disagreement with the majority.
    A. Standard of Review and Legal Standard for New
    Ground of Rejection
    “Whether the [PTAB] relied on a new ground of rejec-
    tion is a legal question that we review de novo.” In re
    Stepan Co., 
    660 F.3d 1341
    , 1343 (Fed. Cir. 2011). “When
    considering whether the [PTAB] issued a new ground of
    rejection, the ultimate criterion of whether a rejection is
    considered new in a decision by the [PTAB] is whether
    applicants have had fair opportunity to react to the thrust
    of the rejection.” In re Biedermann, 
    733 F.3d 329
    , 337
    (Fed. Cir. 2013) (internal quotation marks and citation
    omitted). The PTAB is not limited to “recit[ing] and
    agree[ing] with the examiner’s rejection in haec verba”;
    indeed, it may “further explain[] the examiner’s rejection”
    and thoroughly “respond[] to an applicant’s argument.”
    
    Id. (internal quotation
    marks and citations omitted).
    However, if the PTAB “finds facts not found by the exam-
    iner regarding the differences between the prior art and
    the claimed invention, and these facts are the principal
    evidence upon which the [PTAB]’s rejection was based,”
    then the PTAB improperly enters a new ground of rejec-
    tion. In re Leithem, 
    661 F.3d 1316
    , 1320 (Fed. Cir. 2011)
    (citation omitted).
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.     3
    B. The PTAB Did Not Issue a New Ground of Rejection
    The majority holds that the PTAB’s analysis of claims
    1, 3, 5–6, 8, 11–16, 18–20, 23–25, and 31–33 of the ’366
    patent (“subject claims”) “was different from that of the
    Examiner” because “[d]uring its analysis of Honeywell’s
    evidence of secondary considerations, the [PTAB] express-
    ly stated that it disagreed with the Examiner’s treatment
    of that evidence.” Maj. Op. 16 (internal quotation marks,
    brackets, and citation omitted). 1 Specifically, the majority
    believes that the PTAB “rejected the Examiner’s conclu-
    sions regarding the evidence of unexpected results and
    instead relied on Omure to find the evidence unpersua-
    sive.” 
    Id. I do
    not agree with this assessment of the
    record.
    Having concluded that the record supported the Ex-
    aminer’s determination that a prima facie case of obvi-
    ousness exists as to the subject claims, Mexichem, 
    2016 WL 1254603
    , at *5–11, the PTAB next considered Honey-
    well’s evidence relating to secondary considerations of
    non-obviousness, including whether a nexus exists be-
    tween what was claimed in the ’366 patent and the evi-
    dence of secondary considerations submitted, see 
    id. at *11–15;
    see also Apple Inc. v. Samsung Elecs. Co., 
    839 F.3d 1034
    , 1052–53 (Fed. Cir. 2016) (en banc) (“[E]vidence
    of secondary considerations . . . is to be considered as part
    of all the evidence, not just when the decisionmaker
    remains in doubt after reviewing the art.” (citation omit-
    ted)). The PTAB’s affirmative analysis of whether the
    requisite nexus exists here does not mention Omure. See
    Mexichem, 
    2016 WL 1254603
    , at *5–13, an approach that
    1    While the majority opinion does not mention the
    specific subset of claims, the enumerated “subject claims”
    are those claims the PTAB analyzed specifically with
    respect to Omure. See Mexichem, 
    2016 WL 1254603
    , at
    *5–15.
    4    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.
    tracks the Examiner’s, see J.A. 2548–605. Therefore, the
    PTAB’s analysis of secondary considerations does not
    include an improper new ground of rejection.
    Although the PTAB discussed Omure in other por-
    tions of its secondary considerations analysis in rejecting
    Honeywell’s arguments, that discussion does not alone
    necessitate a different conclusion because the PTAB’s
    analysis of Omure was not “the principal evidence upon
    which the [PTAB]’s rejection was based.” 
    Leithem, 661 F.3d at 1320
    (citation omitted). The PTAB’s discussion of
    Omure was limited to consideration of Honeywell’s argu-
    ment that the claimed combination of a known refriger-
    ant, 2,3,3,3-tetrafluoropropene (also known as “1,1,1,2-
    tetrafluoropropene” or “HFO-1234yf”), with a known poly
    alkylene glycol (“PAG”) lubricant exhibited an unexpected
    superior stability. See Mexichem, 
    2016 WL 1254603
    , at
    *13–15. The PTAB disagreed with Honeywell, basing its
    conclusion in part on statements in Omure. See 
    id. The PTAB’s
    discussion of Omure reflects the reality that the
    PTAB addresses arguments presented by adverse parties,
    and we have permitted the PTAB to thoroughly respond
    to such arguments in its decisions without the fear of
    entering an improper new ground of rejection. See
    
    Biedermann, 733 F.3d at 337
    . Here, the PTAB discussed
    Omure merely to explain why Honeywell’s evidence of
    secondary considerations did not overcome the Examiner’s
    determination of a prima facie case of obviousness. See
    Mexichem, 
    2016 WL 1254603
    , at *13–15. That discussion
    provided a more thorough explanation of the Examiner’s
    conclusion regarding the stability data. See id at *11–15;
    see also J.A. 2580–85 (Examiner’s Right of Appeal Notice).
    Under such circumstances, the PTAB does not enter an
    improper new ground of rejection. See In re Noznick, 
    391 F.2d 946
    , 947–48 (CCPA 1968) (“It does not constitute a
    new ground of rejection to point out to an appellant why
    his arguments are not persuasive of error in the
    [e]xaminer’s rejection, nor does it constitute an implied
    HONEYWELL INT’L INC.   v. MEXICHEM AMANCO HOLDING S.A.   5
    invitation to present belated showings to supply the
    deficiencies.”); see also In re Jung, 
    637 F.3d 1356
    , 1365
    (Fed. Cir. 2011) (“To assert that the [PTAB’s] thorough-
    ness in responding to [the examiner’s] explanation put it
    in the position of a ‘super-examiner’ would limit the
    [PTAB] to verbatim repetition of the examiner’s office
    actions, which would ill-serve the [PTAB]’s purpose as a
    reviewing body.”). For these reasons, I respectfully dis-
    sent-in-part.