Institute for Governance & Sustainable Development

Status of Patents and Legal Challenges: Patents Related to The use of HFO-1234yf in Auto Air Conditioning

3 December 2021 (updated 7 January 2022)The 2016 Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol) phases down the production and consumption of hydrofluorocarbon (HFC) greenhouse gases. Since 2016, the vast majority of countries that use and produce HFCs, including the United States, China, India, and European nations have agreed to avoid and curtail these potent GHGs. One of the major challenges to transitioning to lower global warming potential (GWP) alternatives identified by Parties to the Montreal Protocol is intellectual property rights (IPR), particularly in the automotive sector (including passenger automobiles, light trucks, and commercial and industrial vehicles used on- and off-road), where low-GWP refrigerant hydrofluoroolefin (HFO)-1234yf has become the predominant solution used in automobiles manufactured or exported to developed countries worldwide. Because a few transnational companies filed a large number of the patents on low-GWP chemical substitutes for HFCs, multiple developing countries (Article 5 Parties under the Montreal Protocol) have raised concerns that these patents could impede their ability to meet HFC reduction goals, significantly increase the costs of doing so, or put their industries at a competitive disadvantage if they do not. Furthermore, because the agreed incremental costs (including IPR) of the Article 5 Parties’ transition is paid from the Multilateral Fund for the Implementation of the Montreal Protocol (MLF), there is concern over affordability among Parties from developed countries (non-Article 5 Parties) donating to that fund.

A new paper, Status of Patents and Legal Challenges: Patents Related To the Use of HFO-1234yf In Auto Air Conditioning (2021) published by the Institute for Governance & Sustainable Development, addresses what has been described as a primary concern related to patents: even if chemical companies in Article 5 Parties can develop their own methods of producing HFOs or using them in the products they make, they could be prevented (absent a license) from selling their products at home and in key markets abroad in countries where restrictive patents have been granted to other companies, at least until the time when challenges to patents are decided or these patents expire.

The authors reviewed the status of patents granted on HFO-1234yf in automotive air conditioning (AC) in the US, Europe, and China, covering the largest automotive manufacturing regions in the world, primarily focusing on patents on the use of HFO-1234yf in automobiles, as opposed to patents on the manufacture of HFO-1234yf. There are multiple manufacturing pathways for HFO-1234yf which may be reviewed in a future paper. In the US and Europe, most patents on the use of HFO-1234yf in automobile AC systems were invalidated following legal challenge. However, this has not prevented the same chemical manufacturers from gaining or maintaining similar IPR in China, where some of the patents have yet to be challenged or overturned. This raises both legal and diplomatic questions about the validity of such patents and the environmental, financial, and trade-related benefits that could be realized if legal barriers to unrestricted use were removed.

This paper updates and expands upon a preceding publication co-authored by Stephen Seidel of the Center for Climate and Energy Solutions and Christine R. Ethridge of Eckert Seamans Cherin & Mellott LLC, published in July 2016 and titled “Status of Legal Challenges: Patents Related to the Use of HFO-1234yf in Auto Air Conditioning”.

Status of Patents and Legal Challenges: Patents Related to The use of HFO-1234yf in Auto Air Conditioning is available here.