Nike and adidas settle (One) patent lawsuit over their knitted technology

Nike and adidas have settled a short-lived patent lawsuit over their respective knitted shoe technology. In the wake of Nike’s lawsuit against adidas in federal court in Portland last year, arguing that the German sportswear titan had made unauthorized use of its “revolutionary” Flyknit technology – and protected by a patent – (which he spent over a decade and over $100 million researching and developing) for a rival collection of “Primeknit” footwear, the parties alerted the US District Court for the District of Oregon that “they have reached a settlement of the matter in dispute such that the matter is dismissed without prejudice,” with each party bearing its own costs and attorneys’ fees.

Nike filed its first patent infringement lawsuit against adidas in December 2021, alleging that instead of committing to innovation, adidas has spent “much of the last decade challenging several of Nike’s patents intended to Flyknit technology” and “continued to use Nike’s patented technology without permission”. As a result, Nike claimed that “adidas offers dozens of footwear products that violate [its] patents, including many so-called “Primeknit” shoes from adidas. In the case since settled, Nike specifically alleged that adidas infringed nine of its nearly 300 utility patents for Flyknit technology “by making, using, offering for sale, selling and/or importing to United States shoes that practice the claimed inventions,” all centered on “a new method of designing and manufacturing uppers that allows Nike to use yarns made from recycled materials and knit the upper to the exact shape needed” .

According to Nike’s complaint, “adidas announced its Primeknit shoes five months after Nike announced Flyknit, [and] the industry immediately took notice of the similarities between Nike’s patented Flyknit technology and adidas’ Primeknit offerings. Instead of seeking a “license to one of Nike’s patents covering Flyknit technology, adidas chose to challenge several of them, while marketing a number of different shoe styles and following Nike’s innovations in other sports,” the Swoosh claimed, setting out nine claims of patent infringement and seeking an injunction and increased damages.

At the time of filing, adidas pushed back against Nike’s claims, saying, “Our Primeknit technology is the result of years of dedicated research and shows our commitment to sustainability.

Nike Flyknit (top) and adidas Primeknit (bottom)

Prior to the parties’ settlement, the case had been stayed, with the court accepting adidas’ unopposed motion to stay the case pending the outcome of an investigation by the United States International Trade Commission (“ITC”). United. On the same day that Nike filed suit against adidas, it also asked the ITC to investigate adidas based on its “unlawful and unauthorized importation into the United States, sale for importation and/or sale in the United States after importing certain knitted footwear products that infringed Nike’s patents protecting its Flyknit technology. That lawsuit — in which Nike is seeking to get the federal commerce agency to block the importation of adidas’ allegedly counterfeit Primeknit shoes — appears to still be ongoing.

A separate feud

Additionally, a separate lawsuit still opposes the sportswear giants nearly a decade after it was filed, with Nike and adidas vying over Nike’s U.S. Patent No. 7,347,011, which is the original patent for its “upper textile family.” knitted”. Adidas originally filed for inter partes (“IPR”) review in 2013 challenging the patentability of a range of claims in Nike and the Patent Trial and Appeal Board (“PTAB”) instituted review .

During the original proceedings, Nike sought to amend its patent by canceling the disputed claims (claims 1-46) and adding replacement claims. Pushing back, adidas argued that the substitution claims, which relate to “a single flat knit textile element”, are not patentable in light of three prior art examples. Although the PTAB granted Nike’s request to vacate the claims, it refused to allow the Swoosh to add the replacement claims due to the state of the art, prompting Nike to appeal to the United States Court of Appeals for the Federal Circuit. (The Court of Appeal upheld the PTAB’s findings that the replacement claims are not patentable and that Nike bore the burden of proving the patentability of the replacement claims.)

Fast forward to 2020, and the case landed in the federal circuit again, with Nike challenging the PTAB’s ruling that its replacement claim 49, which centers on “a knit upper with openings for the laces made by omitting stitches in the knit”, is unpatentable, among others. (The court made such a decision based not on the previously cited prior art references, but on distinct prior art.) Siding with Nike, an appeals court panel ruled stated in an April 2020 decision that the PATB could raise grounds of non-patentability spontaneously when considering a request to amend a claim in IPR proceedings. Specifically, the Federal Circuit held that the PTAB may, in fact, cite prior art or other grounds of invalidity not raised by the disputing party (adidas, here), so long as it gives the parties a advance notice and an opportunity to respond before making a final decision.

Just this month, that case returned to the Federal Circuit for the third time in nine years, with Nike’s attorney arguing that when faced with a challenge from the PTAB, a petitioner (adidas in this case) wears the burden of persuasion. (According to Bloomberg, a panel of federal circuit judges “appeared skeptical” during oral argument Aug. 1 that Nike Inc. “would have saved a patent claim whether or not Adidas had the burden of persuasion after [the PTAB] took on his own challenge” to Nike’s patent.)

The case is Nike, Inc. v adidas AG, 3:21-cv-01780 (D. Or.).

Darryl A. Chapin