EU To Investigate Honeywell, DuPont

Under prompting from French specialty chemical maker Arkema, the European Commission, the administrative arm of the 27-nation European Community, has opened an antitrust proceeding to investigate whether an agreement between Honeywell and DuPont to develop and produce a next-generation auto refrigerant is anticompetitive.

The Commission’s investigation escalates an ongoing dispute between Arkema and the U.S. partners over the patent rights to hydrofluoroolefin (HFO)-1234yf, a refrigerant recently introduced for the air conditioning systems of cars that will be sold under new European environmental regulations. HFO-1234yf also has applications beyond cars in fluorochemical markets such as refrigeration, home air conditioning, and foam blowing that today are worth as much as $5 billion in annual sales, according to an industry consultant.

An Arkema spokeswoman says her firm has proprietary technology to make HFO-1234yf but that Honeywell owns application patents in Europe and the U.S. that keep it from the market. Although Arkema contests those patents, the spokeswoman says the company is also willing “to obtain a license under fair and reasonable conditions in order to supply HFO-1234yf to car makers as soon as possible.”

Both Honeywell and DuPont say they are confident the Commission will rule that they have acted in compliance with European competition rules.

Honeywell and DuPont have a venture to jointly produce—but separately market—HFO-1234yf. Because HFO-1234yf has a low global warming potential and is a drop-in replacement for the widely used refrigerant hydrofluorocarbon (HFC)-134a, it is the auto industry’s refrigerant of choice.

Court battles over the rights to HFO-1234yf have been going on since 2009 when Honeywell first sued Arkema in a European court for infringing its patents. Arkema sued Honeywell in June 2010 in U.S. District Court seeking to invalidate Honeywell’s U.S. patents. Arkema says it has also filed an action in the European Patent Office to invalidate Honeywell’s patents.