Last week the Court of Appeals for the Federal Circuit disagreed with the Patent Trials and Appeal Board ruling in 2018 that rendered Nike’s patent invalid. The patent at issue covers Nike’s “flymesh” sneaker technology. In 2013, industry rival Adidas, requested a review of the validity of Nike’s patent. This sparked a six year long battle that impacts the weekend warrior.
Intellectual Property usually finds its way into the sporting world through branding and trademark issues. Seldom do equipment supplier’s patent disputes surface to a media-worthy level. Nike’s leading sports brand value of 15.9 billion, is aided in part by a government-sanctioned miniature monopoly, in the form of patents.
In the sporting world, a patent can be one of two types: a utility patent, and a design patent. A utility patent protects a new and useful process, like a method of creating a basketball, a machine like an ice resurfacer (or zamboni), an article of manufacture like a sneaker, or any new and useful improvement. While a design patent purely protects the aesthetic appearance of an article of manufacture, such as a unique apparel design.
Utility patents offer 20 year of the right to exclude someone from making, using, selling, or offering for sale of the invention, while design patents last for 15 years. In 2008, Nike’s patent application, that covers Nike’s flyknit footwear construction, was granted. The patent allows Nike to exclude other’s from making, using, selling, or offering for sale until 2025.
Adidas, boasting the third most valuable sports brand at 6.8 billion, challenged the validity of Nike’s patent to the Patent Trials and Appeal Board. Nike responded by cancelling all of their previous claims and submitted all new ones to the Patent Trials and Appeals Board. Those new claims were determined to be unpatentable. In 2016, Nike appealed to the Court of Appeals for the Federal Circuit who determined that the evidence was not properly considered and remanded the case back to the Patent Trials and Appeals Board.
In 2018 the Patent Trials and Appeals Board, determined Nike’s new claims to be unpatentable based on a “handful of passages” from a 413 page knitting handbook. A prior reference in the case record that Adidas did not present as grounds for challenge to Nike’s new claims.
Judge Chen, presiding over the Court of Appeals for the Federal Circuit for Nike’s appeal, blasted the decision. Judge Chen voiced concerns over the Board’s decision to based their decision on prior art in the case file that Adidas did not present its petition for review.
“[Using the reference] sounds incompatible with the board’s rules, which require the petitioner to carry the burden of proof to show the unpatentability of proposed substitute claims.”U.S. Circuit Judge Raymond T. Chen. https://www.law360.com/articles/1241737/ptab-denial-of-nike-amendment-troubles-fed-circ-judge.
Nike has had excellent success with their various branding of “flyknit” technology. They officially incorporated the product in 2012 and in 2016 they announced various environmental and sustainability benefits achieved through utilizing recycled polyester from disposable water bottles. Nike’s flyknit construction is still utilized in their 2020 footwear lines and for the foreseeable future.
As for the decision on the fate of Nike’s patent, Adidas, Under Armour, and other competing footwear companies will have to wait to fully incorporate Nike’s technology, as the case is ongoing. Nike argues that they cannot support their patent claims without notice of the grounds that reject them. Adidas contends that all references within the case record that the Board cites is sufficient notice to Nike of the grounds of rejection.
If Nike’s patent is rendered invalid, the athletic footwear market will dramatically change. Without the patent protection the “flyknit” technology is publicly available to be incorporated by others, potentially increasing environmental friendly, and sustainable technology. Inversely, if the Board is allowed to finalize its decision, it leaves the patentee at a disadvantage, requiring them to have to predict all of the possibilities a Board decision could rely on without having presented, debated, discussed, or given a notice on the grounds for invalidity.
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