Nike, Inc. v. Adidas Ag
2016 U.S. App. LEXIS 2376
| Fed. Cir. | 2016Background
- Nike's U.S. Patent No. 7,347,011 covers a unitary, knitted (flat-knit) footwear upper; Nike sought to substitute claims 47–50 during an IPR instituted on claims 1–46 by adidas.
- The PTAB granted cancellation of claims 1–46 but denied entry of substitute claims 47–50 because Nike failed to establish their patentability over prior art of record and over prior art not of record but known to Nike.
- The Board relied on Nishida (shoe upper from a web, cutting-based) and Schuessler I/II (flat knitting to shape without cutting) to find a motivation to combine and render the substitute claims obvious.
- Nike appealed, arguing (1) the Board improperly placed the burden to prove patentability on Nike, (2) the Board’s obviousness findings lacked substantial evidence (including failure to consider secondary considerations), and (3) the Board improperly required proof against prior art not of record.
- The Federal Circuit affirmed that the PTO may require the patent owner to prove patentability of substitute claims (citing its Proxyconn decision), vacated the Board’s obviousness determination for failure to address Nike’s secondary-considerations evidence and for insufficient factfinding on certain limitations (notably claim 49), and rejected the Board’s denial based on Idle Free as too aggressive under MasterImage 3D.
Issues
| Issue | Plaintiff's Argument (Nike) | Defendant's Argument (Adidas / Director) | Held |
|---|---|---|---|
| Burden to prove patentability of substitute claims | §316(e) places burden on petitioner to prove unpatentability; petitioner must prove new claims unpatentable | PTO regulation 37 C.F.R. §42.20(c) and Proxyconn permit requiring patent owner to prove patentability of substitute claims | Affirmed that burden may be on patent owner; PTO regulation and Proxyconn are permissible interpretations |
| Motivation to combine Nishida and Schuessler to reach flat-knit, unitary upper | References are different (subtractive vs additive); no substantial evidence that skilled artisan would combine them | Both address same problem (efficient, low-waste knitted articles); KSR supports combining known solutions to known problems | PTAB’s motivation-to-combine finding supported by substantial evidence (affirmed) |
| Consideration of secondary considerations (long‑felt need/reduction of waste) | Board failed to consider Nike’s evidence; omission is legal error | Evidence insufficient or implicitly rejected by Board | Vacated: remand required because Board did not analyze Nike’s secondary‑considerations evidence or explain rejection |
| Specific limitation in claim 49 (apertures formed by omitting stitches for laces) | Nishida does not disclose apertures formed by skipping stitches; Nike presented expert support | Board found Nishida discloses lacing areas and cited patent/specification; argued claim 49 not patentably distinct from claim 48 | Vacated as to factual findings; remand required for PTAB to make express fact findings on scope, nexus, and obviousness for claim 49 |
| Requirement to show patentability over "prior art not of record but known to patent owner" (Idle Free) | Nike’s brief, per MasterImage 3D, sufficiently complied with duty of candor; no allegation of bad faith | Board applied Idle Free strictly and found Nike’s conclusory statement inadequate | Vacated Board’s denial on this ground; MasterImage 3D narrows Idle Free: patentee need only make material known prior art of record per duty of candor |
Key Cases Cited
- Consolidated Edison Co. v. NLRB, 305 U.S. 197 (agency fact‑finding standard explanation)
- KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (flexible obviousness, combining known solutions to known problems)
- Graham v. John Deere Co., 383 U.S. 1 (Graham factors for obviousness)
- In re Baxter Int’l, Inc., 678 F.3d 1357 (obviousness standard as question of law based on facts)
- Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (PTO/Board may place burden on patent owner to show patentability of substitute claims)
- Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346 (age of references relevant where prior art did not recognize the problem)
- Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (remand principles; agency fact‑finding)