Adidas fails to overturn Nike win at Federal Circuit
The US Court of Appeals for the Federal Circuit yesterday, June 25, ruled in a long-running dispute between competitors Adidas and Nike over patents covering the manufacture of knitted sneakers.
In a precedential decision, the court held that Adidas was entitled to appeal against the Patent Trial and Appeal Board (PTAB) rulings which upheld two Nike patents, even though Adidas wasn’t sued over the patents, but that doesn’t change the board’s findings in favour of Nike.
Nike’s patents, numbers 7,814,598 and 8,266,749, share a specification and are directed to methods of manufacturing footwear with a textile upper.
Adidas petitioned for inter partes review of claims 1-13 of the ‘598 patent and claims 1-9, 11-19 and 21 of the ‘749 patent. But the PTAB held that Adidas hadn’t demonstrated that the challenged claims were unpatentable as obvious.
Before the Federal Circuit, Nike argued that Adidas cannot establish an “injury in fact”, so it lacks standing to bring the appeal, because Nike “has not sued or threatened to sue Adidas for infringement of either the ‘598 or the ‘749 patent”.
But the Federal Circuit didn’t agree—it concluded that because Nike had accused Adidas of infringing one of its German Flyknit patents, after Adidas launched its Primeknit products, it had standing before the court.
The court added that Nike has asserted the ‘749 patent against a third-party product similar to Adidas’ footwear and that Nike had refused to grant Adidas a covenant not to sue, confirming that “Adidas’ risk of infringement is concrete and substantial”.
But despite this victory for Adidas, the court went on to conclude that the PTAB didn’t err in its obviousness analysis and substantial evidence supported its underlying factual findings.
Adidas had challenged the claims as obvious before the PTAB in view of: the combination of US patent numbers 3,985,003 (Reed) and 5,345,638 (Nishida) and the combination of Nishida and US patent numbers 4,038,840 (Castello) and 6,330,814 (Fujiwara).
On the first ground, the PTAB concluded that Adidas hadn’t demonstrated that a person of ordinary skill in the art would have been motivated to combine Reed and Nishida, because of the differences in teachings.
According to the board, while Reed teaches “pre-seaming”, Nishida involves seaming the textile element after it has been cut from the textile structure.
In summing up the PTAB’s reasoning, the Federal Circuit added: “The board therefore determined that combining Reed with Nishida would ‘require the alteration of the principles of operation of Reed or would render Reed inoperable for its intended purpose’.”
Adidas, before the court, argued that Reed and Nishida are entirely compatible because they both discuss knitting in multiple layers and a skilled artisan would be motivated to combine the references to reduce waste.
But the court rejected this contention, finding that, in view of the “undisputed evidence of the pre-seaming differences” between Reed and Nishida, substantial evidence supports the board’s decision.
On its second ground, Adidas appealed against the board’s finding that it had failed to establish that a person of ordinary skill in the art would have been motivated to combine the teachings of Nishida and Castello with the teachings of Fujiwara.
“Because Adidas failed to reconcile these differences, we conclude that the board’s motivation to combine findings are supported by substantial evidence,” said the court.
After considering the parties’ remaining arguments and finding them unpersuasive, the Federal Circuit affirmed the PTAB’s rulings.
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