Federal Circuit Affirms PTAB Finding that Adidas Did Not Prove Nike Patent Claims Unpatentable as Obvious

By Eileen McDermott
June 26, 2020

“The obviousness inquiry does not merely ask whether a skilled artisan could combine the references, but instead asks whether ‘they would have been motivated to do so.’ Fundamental differences between the references are central to this motivation to combine inquiry.” – CAFC

The U.S. Court of Appeals for the Federal Circuit (CAFC) yesterday affirmed a Patent Trial and Appeal Board (PTAB) decision that certain claims of Nike, Inc.’s U.S. Patent Nos. 7,814,598 and 8,266,749 are not unpatentable as obvious. The Court also disagreed with Nike’s argument that Adidas did not have standing to appeal because it could not prove that it had an “injury in fact.” The opinion was authored by Judge Moore.

Standing

With respect to standing, the CAFC said that Nike’s contention that Adidas did not have standing since Nike “has not sued or threatened to sue Adidas for infringement of either the ’598 or the ’749 patent” was irrelevant. Citing E.I. DuPont de Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1004 (Fed. Cir. 2018), the Court explained that “an appellant need not face ‘a specific threat of infringement litigation by the patentee’ to establish the requisite injury in an appeal from a final written decision in an inter partes review.” The appellant only need show that it has engaged in, is engaging, or will engage in potentially infringing activity. Since Adidas and Nike are direct competitors, and had sued Adidas in the past based on Adidas’ introduction of its “Primeknit” products, of infringing one of Nike’s German “Flyknit” patents “and expressed its intent ‘to protect [Nike’s] rights globally in the future against further infringing acts,’” that was enough. Nike has also asserted the ’749 patent against a third-party product similar to Adidas’ footwear, said the Court.

Obviousness 

Moving on to the obviousness analysis, the Court agreed with the Board’s finding that the challenged claims, which  recite “a method of ‘mechanically-manipulating a yarn with a circular knitting machine. . . to form a cylindrical textile structure,” had not been demonstrated by Adidas to be obvious in light of the asserted prior art combinations.

Adidas had argued the claims were obvious in view of:

(1) the combination of U.S. Patent Nos. 3,985,003 (Reed) and 5,345,638 (Nishida) (Ground 1); and

(2) the combination of Nishida and U.S. Patent Nos. 4,038,840 (Castello) and 6,330,814 (Fujiwara) (Ground 2).

The Board said that Adidas had not established that a person of ordinary skill in the art (POSITA) would have been motivated to combine Reed and Nishida, and in particular that neither Adidas or its declarant had addressed the fact “’that each of the relied upon embodiments of Reed teaches pre-seaming,’ whereas Nishida involves seaming the textile element after it has been cut from the textile structure.”  Adidas countered that Reed and Nishida are compatible and that the pre-seaming differences were irrelevant “in view of the Board’s construction of the Base Claims as ‘encompass[ing] methods related to both pre-seamed and unseamed garments and garment sections.’” But the Court disagreed, siding with the Board and adding that “the obviousness inquiry does not merely ask whether a skilled artisan could combine the references, but instead asks whether ‘they would have been motivated to do so.’” The Court continued:

Fundamental differences between the references are central to this motivation to combine inquiry. Thus, while the Board construed the Base Claims as encompassing pre-seamed and unseamed garments and garment sections, the Board properly considered the fundamental differences in the seaming techniques of Reed and Nishida.

As to Adidas’ Ground 2 for obviousness, the Court again agreed with the Board that Adidas relied upon disclosures of Castello that did not teach pre-seaming:

In contrast, ‘the intended purpose of Fujiwara’s methods is to produce pre-seamed, substantially finished garments.’ As explained with respect to Ground 1, the Board properly considered these fundamental differences in seaming techniques as part of its motivation to combine inquiry.

Thus, the Court held that the Board’s motivation to combine findings were supported by substantial evidence, and that it did not err overall in its obvious analysis.

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

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