`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`HONEYWELL INTERNATIONAL INC.,
`Appellant
`
`v.
`
`ARKEMA INC., ARKEMA FRANCE,
`Appellees
`______________________
`
`2018-1151, 2018-1153
`______________________
`
`Appeals from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in Nos. PGR2016-
`00011, PGR2016-00012.
`______________________
`
`Decided: October 1, 2019
`______________________
`
`JOHN C. O'QUINN, Kirkland & Ellis LLP, Washington,
`DC, argued for appellant. Also represented by GREGG
`LOCASCIO, WILLIAM H. BURGESS, NOAH SAMUEL FRANK,
`CALVIN ALEXANDER SHANK.
`
` MARK J. FELDSTEIN, Finnegan, Washington, DC, ar-
`gued for appellees. Also represented by ERIN SOMMERS,
`MARK D. SWEET.
` ______________________
`
`Before NEWMAN, REYNA, and HUGHES, Circuit Judges.
`
`

`

`2
`
`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`REYNA, Circuit Judge.
`Honeywell appeals from a pair of post-grant review
`proceedings involving a single Honeywell patent. Follow-
`ing institution, Honeywell sought authorization from the
`Board to file a motion for leave to petition the Patent and
`Trademark Office Director for a Certificate of Correction to
`correct the challenged patent. Honeywell sought to correct
`a mistake in the chain of priority listed on the face of the
`patent. The Board rejected Honeywell’s request. Because
`we conclude that the Board abused its discretion in reject-
`ing Honeywell’s request for authorization to file a motion
`for leave, we vacate and remand.
`BACKGROUND
`I. The ’017 Patent
`Honeywell International Inc. (“Honeywell”) owns U.S.
`Patent No. 9,157,017 (“the ’017 patent”), which is directed
`to fluoroalkene compounds used in refrigeration systems
`and other applications. The ’017 patent issued on October
`13, 2015, and recites a chain of priority applications dating
`back to 2002, all of which were incorporated by reference
`into the ’017 patent.
`During prosecution of the ’017 patent, Honeywell filed
`a preliminary amendment that cancelled all 20 claims re-
`cited in the original application and added 20 new claims
`directed to admittedly different subject matter: automobile
`air conditioning systems. In the proceedings below, Hon-
`eywell asserted for the first time that when it made the
`preliminary amendment, it inadvertently failed to make
`corresponding amendments to the list of priority applica-
`tions. J.A. 156:10–13 (asserting an “inadvertent error in
`failing to make a claim of priority to [certain] sister chains
`of cases that we could have made at that time”). As a re-
`sult, when the ’017 patent issued, the list of priority appli-
`cations listed on the face of the patent was materially the
`same as the initial application.
`
`

`

`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`3
`
`II. Arkema’s
`PGR2016-00012 and PGR2016-00011
`Four months after the ’017 patent issued, Arkema Inc.
`(“Arkema”) filed two petitions for post-grant review
`(“PGR”) of the ’017 patent with the Patent Trial and Appeal
`Board (“Board”) of the Patent and Trademark Office
`(“PTO”). Both petitions asserted that the priority applica-
`tions listed on the face of the ’017 patent did not provide
`written description support for the issued claims. As a re-
`sult, Arkema argued, the claims of the ’017 patent were
`only entitled to a priority date of March 26, 2014—the fil-
`ing date of the application that led to the ’017 patent—ra-
`ther than the 2002 priority date that would result if the
`priority chain adequately supported the claims.
`Based on that contention, Arkema argued that the ’017
`patent was eligible for PGR proceedings, which are availa-
`ble only for patents having at least one claim with an effec-
`tive filing date on or after March 16, 2013. Arkema also
`presented several prior art references, including work by
`Honeywell’s own inventors, dated from the period between
`2002 and 2014.
`According to Honeywell, it did not immediately realize
`that the alleged lack of written description support
`stemmed from a mistake in the priority chain. Instead, in
`its Preliminary Patent Owner Response to Arkema’s peti-
`tion, Honeywell argued that all claims of the ’017 patent
`were entitled to a priority date at least as early as 2004
`based on the priority chain listed on the patent. As a re-
`sult, Honeywell claimed, the ’017 patent was not eligible
`for PGR proceedings. The Board rejected Honeywell’s ar-
`gument and instituted both post-grant review proceedings.
`Honeywell asserts that it realized the priority chain
`mistake when preparing its Patent Owner Response. Hon-
`eywell then requested permission to file a motion for leave
`to request a Certificate of Correction from the Director of
`the PTO (“Director”) that would amend the priority chain
`
`

`

`4
`
`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`of the ’017 patent. Honeywell explained that its proposed
`correction would include additional Honeywell patent ap-
`plications in the priority chain that disclosed automotive
`air conditioning subject matter, and thus conferred a dif-
`ferent priority benefit.
`The Board held two telephonic conferences to discuss
`Honeywell’s request. In response to questions from the
`Board, Honeywell conceded that the mistake was not a
`clerical or typographical error, but it argued that a Certifi-
`cate of Correction is a permissible means for making “a
`change in the priority chain.” J.A. 155:19–22. Honeywell
`also argued that this change was “minor” because it did not
`change the substance of the claims or the specification.
`J.A. 155:13–25. Finally, in response to the Board’s ques-
`tions about whether the change would satisfy the “good
`faith” requirement of 35 U.S.C. § 255, Honeywell explained
`that it learned of the incomplete priority chain for the first
`time after the Board issued its decision to institute. Hon-
`eywell asserts, and Arkema does not dispute, that Honey-
`well sought authorization from the Board to file its motion
`for leave “promptly upon discovering the mistake in the
`course of preparing its Patent Owner Responses.” Appel-
`lant Br. 50–51. Honeywell sought authorization from the
`Board a little over a year after the ’017 patent issued and
`less than three months after the Board instituted review.
`Arkema, on the other hand, argued that the error was
`“not of a minor character and is not proper grounds for cor-
`rection.” J.A. 176:15–19. Arkema claimed that allowing
`Honeywell to correct this error would be “extremely preju-
`dicial,” because, among other things, Arkema’s window to
`re-file a PGR with different prior art or different references
`had now closed. J.A. 162:4–165:5.
`The Board rejected Honeywell’s request for authoriza-
`tion to file a motion for leave, explaining:
`The panel has conferred and has determined at this
`juncture there has been a failure to show that [the]
`
`

`

`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`5
`
`requirements of 255 have been met. This is not a
`typographical or clerical error. It’s been also failed
`[sic] to show that the minor character prong has
`been met. We do not need to reach the issue of
`whether there is a good faith effort here. Further-
`more, we believe that to the extent of showing prej-
`udice in this case, it would be improper to allow
`such a motion to be filed at this juncture, due to the
`prejudice that would arise to [Arkema].
`J.A. 177:12–178:2.
` After rejecting Honeywell’s request, the proceedings
`continued until the Board issued a combined Final Written
`Decision on August 31, 2017. The Board held that
`claims 1–20 of the ’017 patent were unpatentable.
` Honeywell timely appealed. We have jurisdiction un-
`der 28 U.S.C. § 1295(a)(4)(A).
`DISCUSSION
`Under the Administrative Procedure Act, we “hold un-
`lawful and set aside agency action, findings, and conclu-
`sions found to be . . . arbitrary, capricious, an abuse of
`discretion, or otherwise not in accordance with law.”
`5 U.S.C. § 706(2)(A); see In re Chapman, 595 F.3d 1330,
`1336–37 (Fed. Cir. 2010). The Board abuses its discretion
`if the decision: (1) is clearly unreasonable, arbitrary, or fan-
`ciful; (2) is based on an erroneous conclusion of law; (3)
`rests on clearly erroneous fact findings; or (4) involves a
`record that contains no evidence on which the Board could
`rationally base its decision. Ultratec, Inc. v. CaptionCall,
`LLC, 872 F.3d 1267, 1273 (Fed. Cir. 2017).
`As a preliminary matter, we reject Arkema’s assertion
`that the Board’s decision is unreviewable under 5 U.S.C.
`§ 701(a)(2) as agency action “committed to agency discre-
`tion by law.” As we have held, § 701(a)(2) provides a “very
`narrow exception” to the presumption of judicial review,
`and is applicable only “in those rare instances where
`
`

`

`6
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`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`‘statutes are drawn in such broad terms that in a given case
`there is no law to apply.’” Hyatt v. U.S. Patent & Trade-
`mark Office, 797 F.3d 1374, 1379 (Fed. Cir. 2015). In Ul-
`tratec, we reviewed the Board’s refusal to authorize the
`patent owner to file a motion during a post-grant proceed-
`ing. 872 F.3d at 1271–72. We are unpersuaded by
`Arkema’s arguments that we lack the ability to review the
`Board’s refusal to grant authorization in this case.
`On the merits of Honeywell’s appeal, we conclude that
`the Board abused its discretion by assuming the authority
`that 35 U.S.C. § 255 expressly delegates to the Director: to
`determine when a Certificate of Correction is appropriate.
`Patentees may petition the Director to issue a Certifi-
`cate of Correction to correct in an issued patent “a mistake
`of a clerical or typographical nature, or of minor character,
`which was not the fault of the Patent and Trademark Of-
`fice.” 35 U.S.C. § 255. The patentee must show that the
`mistake “occurred in good faith” and that “the correction
`does not involve such changes in the patent as would con-
`stitute new matter or would require re-examination.” Id.
`When a patentee seeks to correct a patent that is sub-
`ject to a post-issuance review proceeding, the patentee
`must first file a motion with the Board seeking authoriza-
`tion to petition the Director for a Certificate of Correction,
`asking the Board to temporarily cede its exclusive jurisdic-
`tion over the proceedings. 37 C.F.R. § 1.323; Manual of Pa-
`tent Examining Procedure (“MPEP”) § 1485; see also
`37 C.F.R. § 42.3(a). Before doing so, the patentee must
`seek authorization from the Board to file the motion for
`leave—as is the case with all motions filed with the Board.
`37 C.F.R. § 42.20(b) (“A motion will not be entered without
`Board authorization.”).
`In other words, a patent owner subject to a post-issu-
`ance review proceeding must take three steps in order to
`file a petition for a Certificate of Correction: (1) seek au-
`thorization from the Board to file a motion, 37 C.F.R.
`
`

`

`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`7
`
`§ 42.20(b); (2) if authorization is granted, file a motion with
`the Board, asking the Board to cede its exclusive jurisdic-
`tion so that the patentee can seek a Certificate of Correc-
`tion from the Director, 37 C.F.R. § 1.323; MPEP § 1485; and
`(3) if the motion is granted, petition the Director for a Cer-
`tificate of Correction under 35 U.S.C. § 255. E.g., Plastic
`Dev. Grp., LLC v. Maxchief Investments, Ltd., No. IPR2017-
`00846, Paper No. 16 at 2 (P.T.A.B. Nov. 13, 2017). After
`those three steps are completed, the Director—not the
`Board—will evaluate the merits of the patentee’s petition,
`including whether the mistake is of “minor character” or
`“occurred in good faith.” See 35 U.S.C. § 255.
`Section 255 does not grant the Board authority to de-
`termine whether a mistake in an issued patent is of “minor
`character” or “occurred in good faith.” 35 U.S.C. § 255.
`That authority is expressly granted to the Director. Id.
`The Director has not delegated its Section 255 authority to
`the Board, but has instead promulgated procedures by
`which patentees may seek the Board’s leave to petition the
`Director for a Certificate of Correction. 37 C.F.R. § 1.323;
`MPEP § 1485.
`The Board has previously recognized that § 255 author-
`izes the Director—not the Board—to determine whether a
`Certificate of Correction should be issued. E.g., Plastic
`Dev. Grp., Paper No. 16 at 2 (“We leave the final determi-
`nation on whether a Certificate of Correction should be is-
`sued with the Director in accordance with the authority
`granted in 35 U.S.C. § 255.”). The Board has likewise rec-
`ognized that its review of a patentee’s motion for leave to
`seek a Certificate of Correction from the Director does not
`involve a decision about the merits of the patentee’s peti-
`tion. E.g., United Servs. Auto. Ass’n v. Asghari-Kamrani,
`No. CBM2016-00063, Paper No. 10 at 6 (P.T.A.B. August
`4, 2016) (“USAA”). In USAA, the Board explained:
`[I]n the instant Decision, we are not deciding
`whether a request for a Certificate of Correction
`
`

`

`8
`
`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`should be granted pursuant to 35 U.S.C. § 255, as
`Patent Owner merely is seeking authorization for
`filing such a request. Moreover, we are not the de-
`ciding official for a request for a Certificate of Cor-
`rection.
`Id.
`Instead, the Board has previously reviewed motions for
`leave to seek a Certificate of Correction from the Director
`to “determine whether there is sufficient basis supporting
`Patent Owner’s position that the mistake may be correcta-
`ble.” Plastic Dev. Grp., Paper No. 16 at 2 (emphasis added).
`We hold that this standard of review is appropriate and
`consistent with 35 U.S.C. § 255, the relevant Board regula-
`tions, e.g., 37 C.F.R. §§ 1.323, 42.20(b), 42.3(a); MPEP
`§ 1485, and Congress’s intent that the post-issuance pro-
`ceedings created under the America Invents Act provide
`the PTO with an “enlarged opportunity to correct its errors
`in granting a patent.” Cascades Projection LLC v. Epson
`Am., Inc., 864 F.3d 1309, 1311 (Fed. Cir. 2017).
`But in this case, the Board did not review Honeywell’s
`motion for leave to seek a Certificate of Correction from the
`Director to determine if Honeywell had demonstrated a
`“sufficient basis” that the mistake “may” be correctable.
`Instead, the Board prohibited Honeywell from even filing a
`motion for leave. The Board refused to authorize Honey-
`well to file a motion for leave because “at this juncture
`there has been a failure to show that [the] requirements of
`255 have been met.” J.A. 177:12–15. Specifically, the
`Board determined that—based solely on the two telephonic
`hearings—Honeywell “failed to show that the minor char-
`acter prong has been met.” J.A. 177:17–19. The Board also
`explained that “it would be improper to allow such a motion
`to be filed at this juncture, due to the prejudice that would
`arise to [Arkema].” J.A. 177:22–178:2.
`By requiring that Honeywell “show that [the] require-
`ments of 255 have been met” before authorizing Honeywell
`
`

`

`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`9
`
`to file a motion for leave to seek a Certificate of Correction
`from the Director, the Board abused its discretion. The
`Board further abused its discretion by assuming the au-
`thority that § 255 delegates to the Director and deciding
`the merits of Honeywell’s petition for a Certificate of Cor-
`rection.
`As we held in Ultratec, the Board’s abuse of discretion
`precipitated additional problems. 872 F.3d at 1273. First,
`by evaluating the merits of Honeywell’s § 255 request when
`Honeywell was merely requesting authorization to file a
`motion for leave to petition the Director, the Board “lacked
`the information necessary to make a reasoned decision.”
`Id. At that stage, the Board had not seen the language of
`Honeywell’s proposed correction to the priority chain lan-
`guage of the ’017 patent. Nor had the Board seen any evi-
`dence of whether the mistake was inadvertent and made in
`good faith or whether the correction prejudiced Arkema.
`The Board also failed to provide an explanation or a
`reasoned basis for its decision. Ultratec, 872 F.3d at 1273
`(citing Motor Vehicle Mfs. Ass’n of U.S. v. State Farm Mut.
`Auto. Ins. Co., 463 U.S. 29, 43 (1983) (“[T]he agency must
`examine the relevant data and articulate a satisfactory ex-
`planation for its action including a rational connection be-
`tween the facts found and the choice made.”)). The Board
`provided no explanation for its conclusion that Honeywell
`“failed to show that the minor character prong has been
`met” or its conclusion that prejudice to Arkema required
`denial of Honeywell’s request to file a motion. JA 177:17–
`178:6. This failure impedes our meaningful review on ap-
`peal. Ultratec, 872 F.3d at 1274 (“For judicial review to be
`meaningfully achieved within these strictures, the agency
`tribunal must present a full and reasoned explanation of
`its decision.”).
`We find nothing in the record, or in the Board’s conclu-
`sory decision, that warrants denying Honeywell’s request
`to file a motion for leave to petition the Director for a
`
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`10
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`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`Certificate of Correction correcting the priority chain of
`the ’017 patent. Indeed, as Honeywell notes, the PTO has
`previously allowed patentees to correct priority claims
`through Certificates of Correction. Carotek, Inc. v. Koba-
`yashi Ventures, LLC., 875 F. Supp. 2d 313, 331 (S.D.N.Y.
`2012) (“If a patent is issued and contains a mistake, such
`as failing to claim priority to an appropriate earlier-filed
`patent, regardless of whose fault the mistake is, it may be
`corrected by petitioning the PTO for a Certificate of Correc-
`tion.”); B. Braun Melsungen AG v. Becton, Dickinson & Co.,
`No. 1:16-cv-411, 2017 WL 2531939, at *4 (D. Del. June 9,
`2017) (“There is substantial case law supporting Plaintiffs’
`position that the PTO has a longstanding practice of cor-
`recting priority claims through certificates of correction.”).
`The Board never addresses this prior practice, nor does it
`explain why Honeywell’s request is different.
`We also express doubt over Arkema’s assertion that
`Honeywell knew about the mistake in priority for at least
`nine months but, to obtain a strategic advantage, declined
`to pursue correction of the mistake. It is unclear how Hon-
`eywell would benefit from intentionally delaying its peti-
`tion to the Director. Because the Board improperly refused
`Honeywell the opportunity to file a motion for leave (and
`Arkema the opportunity to file a response), and then failed
`to explain its conclusion that a motion for leave would be
`improper “due to the prejudice that would arise to Peti-
`tioner,” J.A. 177:17–178:6, we are unable to meaningfully
`review the parties’ prejudice arguments.
`CONCLUSION
`We have considered Arkema’s other arguments and
`find them unpersuasive. We conclude that the Board erred
`by rejecting Honeywell’s request to file a motion for leave
`to petition the Director for a Certificate of Correction based
`on Honeywell’s failure to “show that [the] requirements of
`255 have been met.” We vacate the Board’s final written
`decision and remand to the Board. On remand, the Board
`
`

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`HONEYWELL INTERNATIONAL INC. v. ARKEMA INC.
`
`11
`
`should authorize Honeywell to file a motion seeking leave
`to petition the Director for a Certificate of Correction. The
`Board should then review Honeywell’s motion for leave in
`accordance with 37 C.F.R. § 1.323 and MPEP § 1485, in-
`cluding to evaluate whether prejudice to Arkema requires
`accommodation.
`VACATED AND REMANDED
`COSTS
`
`No costs.
`
`