Further to our August 4 post, on September 21, 2009, the Commission issued the public version of its opinion reversing Chief ALJ Paul J. Luckern’s April 1, 2009 Remand Initial Determination (“RID”) in Certain R-134a Coolant (Otherwise Known as 1,1,1,2-Tetrafluoroethane) (Inv. No. 337-TA-623).  In the opinion, the Commission determined to reverse the RID’s finding of nonobviousness of claim 1 of U.S. Patent No. 5,559,276 (the ‘276 patent).

By way of background, this investigation was instituted in December 2007 based on a complaint filed by INEOS Fluor Holdings Ltd., INEOS Fluor Ltd. and INEOS Fluor Americas LLC (collectively, “INEOS”).  INEOS’ complaint alleged violations of Section 337 by respondents Sinochem Modern Environmental Protection Chemicals (Xi’an) Co. Ltd., Sinochem Ningbo Ltd., Sinochem Environmental Protection Chemicals (Taicang) Co., Ltd., and Sinochem (U.S.A.) Inc. (collectively, “Sinochem”) in the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of certain R-134a coolant (otherwise known as 1,1,1,2-tetrafluoroethane) by reason of infringement of certain patents, including the ‘276 patent.  See our April 6 post for more details.

On December 1, 2008, ALJ Luckern issued a final initial determination (“ID”) that Sinochem infringed the ‘276 patent and the domestic industry requirement had been met.  ALJ Luckern further determined that Sincochem failed to establish that the ‘276 patent was invalid or unenforceable.  Following submissions by the parties, the Commission reviewed the ID with respect to invalidity and issued an order on January 30, 2009 remanding the investigation to the ALJ for further proceedings related to anticipation and obviousness because the disposition of these issues was unclear from the ALJ’s ID.  On April 1, 2009, ALJ Luckern issued his RID concluding that Sinochem’s arguments regarding anticipation and obviousness arguments were waived under the ground rules and, alternatively, that the arguments were without merit.  As explained in our June 3 post, on June 1, 2009, the ITC determined to review the RID in its entirety.

In the opinion, the Commission determined that it was necessary to consider Sinochem’s arguments relating to certain party admissions and the state of the prior art “because the admissions and background are relevant to a key factor in the obviousness analysis –  ‘the scope and content of the prior art’ under Graham v. John Deere Co., 383 U.S. 1 (1966).”  The Commission further determined that “the ALJ should have considered arguments and evidence relating to the state of the prior art at the time of invention in conjunction with his analysis of the specific remand references.”

With respect to what one of ordinary skill in the art would know about production of R-134a, the Commission determined that “no party disagrees with the ALJ’s finding that the two reactions at issue were known in the prior art and that it was recognized that the reactions could be performed in sequence to create R-134a.”  According to the opinion, the “‘276 patent itself acknowledges this fact” and “also discloses that the concept of recycling a portion of the product stream was known in the prior art, albeit with reference to a different method of production of R-134a.”  The opinion further notes that it is “undisputed that a person of ordinary skill in the art would have had a reason to recycle unconverted 1,1,1-trifluoro-2-chloroethane for further reaction with hydrogen fluoride.”

According to the opinion, however, it was disputed “whether it was known in the art to perform the method in two separate reaction zones, and it was further disputed whether it was known to perform reaction (1) at a temperature ‘below that used in reaction (2).’”  First, based on admissions made by INEOS’ expert and references described in the ‘276 patent, the Commission determined that carrying out the reaction sequence in two separate reaction zones was known in the prior art.  Second, regarding the dispute whether one of ordinary skill in the art would have known to run reaction (1) at a temperature lower than reaction (2), the Commission determined that the “record contains several pieces of evidence that clearly show that the claimed temperature relationship was known to one skilled in the art.”

Accordingly, the Commission determined that “without even consulting any of the remand references, one of ordinary skill in the art would have knowledge of all of the elements in claim 1, and would know how to combine the known elements to produce R-134a.”  The Commission therefore held that “claim 1 of the ‘276 patent would have been obvious to one of ordinary skill in the art based upon the scope and content of the prior art, the trial testimony, most of which was undisputed, and the disclosures in the ‘276 patent itself.”