Burden of the Court – Nike v. Adidas

Nike, Inc. vs. Adidas AG and Kathi Vidal21-1903 (Fed. Cir. 2022)

This ongoing dispute between the two sportswear companies has been going on since Adidas filed its IPR petition in 2012. IPR2013-00067. The decade is procedurally explainable – this is the third appeal in the case. The appeals all related to replacement requests offered by Nike. Initially, the Commission refused to allow Nike to submit a request for replacement. This decision was partially reversed on appeal by Nike, Inc. v. Adidas AG812 F.3d 1326 (Fed. Cir. 2016) (Nike I), then the doctrine of allowing substitute claims was significantly changed by the court’s decision. bench decision in Aqua Prods., Inc. vs. Matal, 872 F.3d 1290 (Fed. Cir. 2017). The Board then issued a second written decision finding that the substitute claims were obvious. On appeal, the Federal Circuit again overturned due to the PTAB’s failure to provide notice that it would rely on a particular prior art reference (Spencer). Nike, Inc. v. Adidas AG, 955 F.3d 45 (Fed. Cir. 2020) (Nike II). Back on remand, the Board opened the case to a further evidentiary briefing, then again found the new claims to be obvious. The PTAB again relied on Spencer to teach a particular stitch pattern for flat lace holes.

Ordinary IPR procedures place the burden of proof on the applicant who challenged the patents. 35 USC 316(e) (“petition shall bear the burden of proving a claim of non-patentability by a preponderance of the evidence”). Things get a bit more complicated with amended and replacement claims. Originally (pre-Aqua), the board held that it was for the patent proprietor to demonstrate the patentability of any new claims. However, in Aquathe Federal Circuit en banc ruled that 316(e) also applies to amended claims. Aqua (the AIA “places the burden of persuasion as to the patentability of the amended claims on the petitioner”).

Whose burden is it – the applicant, the patentee or the Board?: In adversarial proceedings, we usually argue about which party bears the burden of proving a factual assertion. Sometimes, however, the onus is instead on the court. In my Civil Procedure lesson yesterday, we covered Rule 11 penalties and discussed how the rules empower the judge to act spontaneously, but must issue a written order that “describes the sanctioned conduct and explains the basis of the penalty”. FRCP R.11.

In this case, it was the Commission that raised the use of Spencer to teach the lace hole in the surrogate claim. And, despite Aqua’s seemingly straightforward statement that the petitioner bears the burden, the Board concluded that in this situation, the Board could bear the burden of persuasion itself. The Board noted the unusual circumstances of the substitution claims which raise new issues that the petition did not anticipate and that petitioners sometimes “fail to present certain evidence of non-patentability which is readily identifiable and persuasive.” In order to protect the integrity of the system, it is the Council’s responsibility to intervene and provide evidence. The board read Aqua as prohibiting any shifting of the burden onto the patentee, but providing no guidance as to the status of the patentability issues raised by the Board.

On appeal here, the Court declined to specifically answer this question. Instead, the court noted that the petitioner (Adidas) had discharged the burden of proof in its submission on the dismissal. Thus, even if the Board’s statement regarding its burden is erroneous, that error is of no consequence.

The arguments of the Commission and Adidas mirror each other and therefore the result below would have been the same whether the burden was on Adidas or the Commission. We therefore consider that it is not necessary to determine here whether, in an inter partes examination, the applicant or the Commission bears the burden of persuasion for a ground of non-patentability raised spontaneously by the Commission against proposed substitution claims.

Slide Op. Confirmed evidence.


One of the reasons why it is entirely acceptable for the court to dodge the question of the distribution of the burden is that the Patent Office has adopted a revised rule which expressly distributes the burden of persuasion. The rule codified at 37 CFR § 42.121(d). Under the new rules, an applicant still bears the burden: “An applicant bears the burden of persuasion to show, by a preponderance of the evidence, that any proposed substitute claim is unpatentable.”

Darryl A. Chapin