With the summer Olympic Games just around the corner, and Nike already battling for placement on the track (by way of a lawsuit with runner Boris Berian), it seems an appropriate time to check in on the ongoing legal battle between Nike and adidas that arose at the time of the London Olympics in 2012.
Leading up to the London Olympics, Nike and adidas released their first knitted running shoes: the Flyknit for Nike and the Primeknit for adidas. Nike announced the debut of its shoe – which is the result of an allegedly novel technique for assembling a shoe's upper by knitting – in February 2012, after some 10 years of research and development. Adidas unveiled its knitted footwear the following July, hailing the product as "a first-of-its-kind running shoe."
FLYKNIT VS. PRIMEKNIT
Nike responded to adidas’ knitted footwear debut by filing a patent infringement lawsuit. Nike filed suit in a District Court in Nuremberg, Germany, seeking to prohibit adidas from making and selling the Primeknit in Germany, where adidas is headquartered, for the duration of the litigation and depending on the outcome of the case, permanently thereafter. (Nike spokeswoman Mary Remuzzi said the case was filed in and limited to Germany because it's the only place where adidas was making and distributing the Primeknit at the time). In August 2012, the German court granted Nike's injunction, ordering that adidas halt the sale and production of its knitted sneaker. In return, adidas moved to challenge the validity of Nike’s European patent a few months later.
While it appeared – given the court's granting of Nike’s preliminary injunction – that the case would turn out well for Nike, the court ultimately ruled in adidas’s favor, holding that the technology involved in making the shoe's knitted upper has been around since the 1940s. As a result, the court held that Nike’s design failed to meet the novelty element required for patentability, thereby stripping Nike of the right to continue to pursue adidas for patent infringement. The court ordered that the injunction be set aside and that Nike’s patent be deemed invalid in Germany. In so doing, the court permitted adidas to manufacture shoes bearing the knitted elements in Germany. But the rivals’ feud did not end there.
Since then, both Nike and adidas have started selling their respective knitted footwear in the U.S. Adidas filed to challenge the validity of Nike’s patent in late 2012 by way of an inter partes review (“IPR”), in an attempt to prevent Nike from filing suit in order to stop adidas from selling the shoe.
Note: IPR is a proceeding in which the PTAB reviews the patentability of one or more claims in a patent in connection with the “novelty” requirement for patentability (s. 102) or the “non-obviousness” requirement for patentability (s.103), and only on the basis of prior art consisting of patents or printed publications. An IPR proceeding is meant to be a cheaper and quicker proceeding than traditional litigation, as the fee for filing a petition for IPR is $9,000 for challenging up to 20 claims and $200 for each additional claim and a final determination must be made within a maximum of two years following the filing of the petition.
In its petition, which was filed with the U.S. Patent Trial and Appeal Board (“PTAB”), adidas argues that Nike’s U.S. patent for the Flyknit design (patent no. 7,347,011) is invalid based on another party’s patent application from 1991, which discloses a process for creating uppers that are cut from a web of textile material and then shaped and connected to a sole – thereby making Nike's patent obvious (non-obviousness is a necessary element in order to achieve patentability).
The PTAB instituted a review of the patent, after which Nike moved to amend the claims in order to add further narrowing limitations distinguishing the prior art of record. The PTAB denied the motion, however, ruling that the proposed amended claims were obvious and that Nike had failed to meet its burden to demonstrate the amended claims’ patentability over prior art not of record.
To this, Nike filed a 118-page appeal with the U.S. Court of Appeals for the Federal Circuit in 2014, holding that the PTAB had erred in finding that its Flyknit design was invalid, and stating that it “invented” the “novel” knitted technology, that the knit is recognized as a “quantum leap in the field,” and that “it satisfied a long-felt need for an athletic shoe that could be more efficiently manufactured.”
As of now, the case has been remanded by the Federal Circuit Court to the PTAB to decide whether Nike’s invention (as presented in the 7,347,011 utility patent) is, in fact, obvious and thus, ineligible for patent protection, among other issues.
THE LATEST LEGAL ACTION
The war between the two sportswear giants is very much still underway with some new developments as of just a few months ago. Most recently: adidas filed three additional petitions for IPR in April in connection with three more of Nike’s utility patents. The patents at hand were issued to Nike between 2010 and 2012 (and which are distinct from the 7,347,011 patent, which is already subject to litigation as indicated above), and they protect different aspects of an “article of footwear having a textile upper and a method of manufacturing the article of footwear.” In short: the utility patents – patents that cover what most people refer to as an invention, such as a method of creating a shoe – at issue each protect elements of Nike’s Flyknit design and the method for creating those elements.
Ultimately, the PTAB has the power in such a proceeding to invalidate existing patents, which is what adidas is clearly hoping for in connection with its proceedings involving Nike’s three Flyknit-related patents. As for whether a decision from the PTAB will come before the start of the Olympics in Rio, which commence on August 5, and somehow affect what adidas-sponsored athletes will be wearing on their feet, it seems unlikely, and even if it did, that would almost certainly not be the end for these two, as an appeal is likely in order. So, stay tuned.