CAFC pulls last loose thread in Nike-Adidas Patent Row | McDermott Will & Emery

In issuing a third and final decision, the United States Court of Appeals for the Federal Circuit upheld a decision of the Patent Trial and Appeal Board (Board) invalidating the last remaining claim of a textile patent on Nike shoes. Nike, Inc. v. Adidas AGCase No. 21-1903 (Fed. Cir. Sept. 1, 2022) (Prost, ChenStoll, JJ.) (unprecedented)

Adidas filed a complaint inter partes examination of a patent held by Nike concerning a knitted shoe upper. After lengthy litigation, including two prior appeals to the Federal Circuit, all claims in the Nike patent were invalidated except for one substitution claim. In his second callNike successfully argued that the Board failed to give Nike an opportunity to respond to a patentability issue raised spontaneously by the Board, which included a reference to a knitting manual. Upon dismissal of the second appeal, the parties had the opportunity to inform the Board of this new reference and to discuss which party bears the burden of persuasion for the patentability issue raised. spontaneously by the Council.

On the merits, the Board determined that the knitting manual taught the disputed limitation, agreeing with adidas that a skilled craftsman would have understood the manual to teach the disputed limitation, and that there was sufficient reason to combine the teachings of the manual with those of other prior art references. The Board also concluded that the burden of persuasion should rest with the Board itself when raising the issue of patentability. spontaneously. Nike appealed, arguing that the Board had effectively placed the onus of persuasion on Nike.

The Federal Circuit first addressed the burden of persuasion with respect to the grounds first raised by the Commission. The Court found that the Council had juxtaposed its arguments with those of adidas and that they both relied on the same disclosures and arguments. Since the arguments of the Commission and adidas reflected each other, the Court found it unnecessary to determine whether the claimant or the Commission bore the burden of persuasion. The Court also rejected Nike’s argument that the Council had effectively shifted the onus to Nike by declaring in its opinion that Nike’s arguments were “unconvincing” and “inadequate”. The Court cited its 2016 decision in In re Magnum Oil Tools International, in which he explained that the language of the Council is not the concern but rather the actual placement of the burden of persuasion. The Court concluded that the Council and adidas had met the burden and that the burden had not been transferred to Nike.

Turning to the Commission’s obviousness determinations, the Federal Circuit rejected all of Nike’s arguments. First, Nike argued that the knitting manual did not teach the claimed method of creating openings in the fabric by omitting stitches. The Court found that the Commission relied on specific disclosures in the reference describing the use of empty needles to produce “loop displacement”. Nike also argued that there was no reason to combine the reference to the manual with the other two references and that the Commission could not rely on “common sense” to combine them. The Commission concluded (and the Court agreed) that the other two references shared a preference for waste minimization and that the manual’s method of omitting stitches offered a way to create openings without punching (and therefore wasting) material. material. The Court also disagreed with Nike’s argument that the Commission could not use common sense as a motivation to combine the references, citing its previous decisions in which it had concluded that common sense box be invoked to support a motivation to combine to reduce waste or increase efficiency. Finally, the Court rejected Nike’s argument that the Council violated the Administrative Procedure Act (APA) by including two “see also” citations to portions of the handbook reference that were not cited by any part. The Court concluded that these two quotes were not essential to the Commission’s analysis and that it had already sufficiently established its reasoning, therefore not violating the APA. The Court thus upheld the Commission’s decision on all the issues raised.

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