Introduction

On June 25, 2020, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) made a decision in Adidas AG v. Nike INC. Nike INC (“Nike”) is the owner of U.S. Patent No. 7,814,598 (“the ‘598 patent”) and f U.S. Patent No. 8,266,749 (“the ‘749 patent”), both titled “Article of Footwear Having a Textile Upper.”  

 The ‘598 patent and the ‘749 patent relate “to footwear…  more particularly, an article of footwear incorporating an upper that is at least partially formed from a textile material.” Adidas AG appeals the decision of the Patent Trial and Appeal Board (“Board”) in the previously petitioned “inter partes review of claims 1-13 of the ‘598 patent and claims 1-9, 11-19, and 21 of the ‘749 patent,” in which “the Board held that Adidas had not demonstrated that the challenged claims are unpatentable as obvious”.

Decision

Per the standard, the Federal Circuit needed to confirm the standing of this appeal. “Nike contends that Adidas cannot establish an ‘injury in fact,’ and therefore lacks standing to bring this appeal;” however, the Federal Circuit disagrees with this argument. It is known that Adidas and Nike are direct competitors and “Nike has refused to grant Adidas a covenant not to sue’” thus the Federal Circuit “conclude[s] that Adidas has Article III standing to bring this appeal.” In regard to obviousness, “[the Federal Circuit] review[ed] the Board’s legal determinations de novo and its factual findings for substantial evidence.”

Adidas presented two combinations of prior art to “demonstrate that the challenged claims are unpatentable as obvious.” Adidas “challenged the claims as obvious in view of (1) the combination of U.S. Patent Nos. 3,985,003 (Reed) and 5,345,638 (Nishida) and (2) the combination of Nishida and U.S. Patent Nos. 4,038,840 (Castello) and 6,330,814 (Fujiwara),” which was reviewed by the Federal Circuit for this appeal.

First, Adidas argued that the combination of Reed and Nishida is obvious; however, “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.” With this in consideration, Adidas did not provide any further evidence to prove such motivation. The Federal Circuit “conclude[s] that substantial evidence supports the Board’s motivation to combine findings with respect to the Base Claims.”

Second, Adidas argued that the combination of Castello, Fujiwara, and Nishida is obvious; however, “Adidas failed to identify which reference or combination of references it was relying on to disclose each limitation of the challenged claims.” Adidas “contends that “preseamed versus unseamed garment portions have no bearing” on the proposed,” but “the Board properly considered these fundamental differences in seaming techniques as part of its motivation to combine inquiry.”

For the reasons above, the Federal Circuit affirms the Board’s judgement.

Conclusion

This decision determines that when appealing a decision, substantial evidence supporting the argument must be provided along with how the original decision is not supported by evidence.

Full Adidas AG v. Nike INC decision can be read here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1787.OPINION.6-25-2020_1609483.pdf

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