Nike, Inc. v. Adidas Ag ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
NIKE, INC.,
Appellant
v.
ADIDAS AG,
Appellee
______________________
2014-1719
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00067.
______________________
Decided: February 11, 2016
______________________
MARK CHRISTOPHER FLEMING, Wilmer Cutler Picker-
ing Hale and Dorr LLP, Boston, MA, argued for appellant.
Also represented by WILLIAM F. LEE, KEVIN GOLDMAN;
ANDREA WEISS JEFFRIES, Los Angeles, CA.
MITCHELL G. STOCKWELL, Kilpatrick Townsend &
Stockton LLP, Atlanta, GA, argued for appellee. Also
represented by VAIBHAV P. KADABA, TIFFANY L. WILLIAMS.
MICHAEL SUMNER FORMAN, Office of the Solicitor,
United States Patent and Trademark Office, Alexandria,
VA, argued for intervenor Michelle K. Lee. Also repre-
2 NIKE, INC. v. ADIDAS AG
sented by NATHAN K. KELLEY, THOMAS W. KRAUSE, SCOTT
WEIDENFELLER.
______________________
Before CHEN, MAYER, and STOLL, Circuit Judges.
CHEN, Circuit Judge
This appeal arises from the inter partes review (IPR)
of U.S. Patent No. 7,347,011 (the ’011 patent) owned by
Nike, Inc. (Nike). The United States Patent and Trade-
mark Office, Patent Trial and Appeal Board (Board)
granted the IPR petition filed by adidas AG (Adidas) and
instituted inter partes review of claims 1–46 of the ’011
patent. Nike then filed a motion to amend in which it
requested cancellation of claims 1–46 and proposed sub-
stitute claims 47–50. The Board granted Nike’s motion to
cancel claims 1–46, but denied the motion as to the sub-
stitute claims because Nike failed to meet its burden of
establishing patentability of substitute claims 47–50.
Nike now appeals the Board’s denial of its motion to
amend, and the Director of the United States Patent and
Trademark Office (Director) intervened to defend the
Board’s decision. For the reasons stated below, we affirm-
in-part, vacate-in-part, and remand for further proceed-
ings consistent with this opinion.
BACKGROUND
I
Articles of footwear generally consist of two primary
components: a sole structure and an “upper.” The ’011
patent, entitled “Article of footwear having a textile
upper,” relates to the “upper” component, which has the
general shape of a foot and forms a void for receiving the
foot that is accessed using the ankle opening. The upper
disclosed in the ’011 patent is made from a knitted textile
using any number of warp knitting or weft knitting
processes. ’011 patent, 3:30–32. It is undisputed that
NIKE, INC. v. ADIDAS AG 3
weft knitting is well known in the art and includes “flat
knitting,” where the textile is knit as a sheet or flat piece
of textile, and “circular knitting,” where the textile is
produced as cylindrical textile structure. Id. at 7:5–8, 29–
32.
The knitted textile upper of the ’011 patent specifical-
ly consists of “a single material element that is formed to
exhibit a unitary (i.e., one-piece) construction” Id. at
5:38–39. In another embodiment, this unitary textile
element “may be formed as a part of a larger textile
element” where the upper is then cut and “removed from
the larger textile element.” Id. at 5:43–45. Once manu-
factured, the unitary textile element is then “formed or
otherwise shaped to extend around the foot.” Id. at 5:40–
41. By manufacturing the upper component in this fash-
ion, the “unitary construction is intended to express a
configuration wherein portions of a textile element are not
joined together by seams or other connections.” Id. at
6:43–46.
4 NIKE, INC. v. ADIDAS AG
Figure 8 of the ’011 patent illustrates the shape of the
seamless unitary textile element before the various edges
of the element are joined by seams in certain places to
form the shape of the upper, as depicted in Figure 2.
Nike’s proposed substitute claims generally relate to a
unitary flat-knitted textile element:
Claim 47. (Substitute for independent claim 16)
An article of footwear comprising an upper incor-
NIKE, INC. v. ADIDAS AG 5
porating a flat knit textile element, the flat knit
textile element
(1) having flat knit edges free of surrounding tex-
tile structure such that the flat knit edges are not
surrounded by textile structure from which the
textile element must be removed, some of the flat
knit edges joined together to form an ankle open-
ing in the upper for receiving a foot, the ankle
opening having an edge comprised of one of the
flat knit edges; and
(2) having a first area and a second area with a
unitary construction, the first area being formed
of a first stitch configuration, and the second area
being formed of a second stitch configuration that
is different from the first stitch configuration to
impart varying properties to the textile element;
and a sole structure secured to the upper.
Joint Appendix (J.A.) 1226–27.
II
Adidas petitioned the Board for inter partes review of
the ’011 patent, asserting that all forty-six claims were
unpatentable under either 35 U.S.C. § 102 or § 103 in
view of numerous prior art references. The Board granted
review of certain of Adidas’s challenges to the patentabil-
ity of all claims. After the Board issued its institution
decision, Nike filed a motion to amend the claims in which
it sought cancellation of claims 1–46 and proposed four
substitute claims. In its final written decision, the Board
granted Nike’s request to cancel claims 1–46. The Board
denied, however, Nike’s request to enter substitute claims
47–50 for two alternate reasons. First, the Board
acknowledged the requirement announced in the Board’s
Idle Free decision that a patent owner “persuade the
Board that the proposed substitute claim is patentable
over the prior art of record, and over prior art not of
6 NIKE, INC. v. ADIDAS AG
record but known to the patent owner.” J.A. 34–36.
Because Nike’s motion included only a conclusory state-
ment that the proposed claims were patentable over prior
art not of record but known to Nike, the Board denied
Nike’s motion. Alternatively, the Board denied entry of
the substitute claims because Nike failed to establish that
the substitute claims were patentable over the Nishida
and Schuessler references.
Nike filed a timely appeal from the Board’s decision,
and the Director intervened. We have jurisdiction under
28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
We review the Board’s conclusions of law de novo and
its findings of fact for substantial evidence. 5 U.S.C.
§ 706(2)(E); In re Sullivan, 498 F.3d 1345, 1350 (Fed. Cir.
2007). “Substantial evidence is more than a mere scintil-
la. It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Con-
sol. Edison Co. v. NLRB, 305 U.S. 197, 217 (1938).
In this appeal, Nike raises three primary arguments.
First, Nike asserts that the Board erroneously shifted to
Nike (the patent owner) the burden of proving patentabil-
ity of its proposed substitute claims 47–50. Second, Nike
contests the Board’s finding on the merits that the pro-
posed substitute claims are unpatentable as obvious.
Finally, Nike objects to the Board’s practice of requiring a
patent owner to establish patentability of substitute
claims over all prior art known to the patent owner,
including prior art not of record but known to the patent
owner.
I. Burden of Proof
When Congress created IPR proceedings, it also en-
acted 35 U.S.C. § 316, which directs the PTO to “prescribe
regulations” governing a considerable number of different
aspects of these new proceedings. 35 U.S.C. § 316(a).
NIKE, INC. v. ADIDAS AG 7
Particularly relevant to this case is § 316(a)(9), in which
Congress delegated authority to the PTO to prescribe
regulations “setting forth standards and procedures for
allowing the patent owner to move to amend the patent
under [§ 316](d) to cancel a challenged claim or propose a
reasonable number of substitute claims.” Id. § 316(a)(9);
see also id. § 316(d)(1) (“During an inter partes review . . .
, the patent owner may file 1 motion to amend the patent
in 1 or more of the following ways: (A) Cancel any chal-
lenged patent claim. (B) For each challenged claim,
propose a reasonable number of substitute claims.”).
Consistent with § 316(a)(9), the PTO promulgated a
regulation relating to motions practice, 37 C.F.R. § 42.20,
which explains that “[r]elief, other than a petition re-
questing the institution of a trial, must be requested in
the form of a motion” and that “[t]he moving party has the
burden of proof to establish that it is entitled to the
requested relief.” 37 C.F.R. § 42.20(a), (c).
The Board addressed these regulations in its Idle Free
“informative” decision in which it interpreted section
42.20(c) and explained that “[t]he burden is not on the
petitioner to show unpatentability [of new, substitute
claims], but on the patent owner to show patentable
distinction over the prior art.” Idle Free Sys., Inc. v.
Bergstrom, IPR 2012-00027, 2013 WL 5947697, at *4
(PTAB June 11, 2013); see also Patent Trial and Appeal
Board, Standard Operating Procedure 2 (Revision 9), at 3
(¶ IV.A–B) (Standard Operating Procedure 2), available
at
http://www.uspto.gov/sites/default/files/documents/sop2-
revision-9-dated-9-22-2014.pdf (explaining that Board
decisions labeled “informative” are “not binding authori-
ty,” but provide “Board norms on recurring issues,” “guid-
ance on issues of first impression,” and “guidance on
Board rules and practices”).
In our recent decision in Microsoft Corp. v. Proxyconn,
Inc., we held that the Board’s interpretation of section
8 NIKE, INC. v. ADIDAS AG
42.20(c) was permissible in light of the text of § 316(a)(9)
and the language of the PTO’s regulation. 789 F.3d 1292,
1306–08 (Fed. Cir. 2015); see also id. at 1307 (“Nor can we
say that the Board’s interpretation of § 42.20(c) in Idle
Free—requiring the patentee to show patentable distinc-
tion [of the substitute claims] over the prior art of rec-
ord—is plainly erroneous or inconsistent with the
regulation or governing statutes.” (alteration in original)
(citation omitted)). We further explained that placing this
burden on the patent owner for its newly formulated
claims is appropriate given “the very nature of IPRs,”
which are distinctly different from a typical PTO exami-
nation or reexamination where a patent examiner per-
forms a prior art search and independently conducts a
patentability analysis of all claims, whether newly pro-
posed or previously existing. Id. at 1307.
During IPRs, once the PTO grants a patentee’s
motion to amend, the substituted claims are not
subject to further examination. Moreover, the pe-
titioner may choose not to challenge the patenta-
bility of substitute claims if, for example, the
amendments narrowed the claims such that the
petitioner no longer faces a risk of infringement.
If the patentee were not required to establish pa-
tentability of substitute claims over the prior art
of record, an amended patent could issue despite
the PTO having before it prior art that under-
mines patentability.
Id. at 1307–08; see also 35 U.S.C. § 318(a) (instructing the
Board to “issue a final written decision with respect to the
patentability of any patent claim challenged by the peti-
tioner and any new claim added under section 316(d)”).
In this way, placing the burden on the patent owner
ensures that proposed substitute claims are critically
analyzed before they are entered as claims that are part
of the issued patent.
NIKE, INC. v. ADIDAS AG 9
Consistent with the language of the regulation and
our subsequent conclusion in Proxyconn, the Board in the
present case stated that Nike’s proposed substitute claims
could not be “entered automatically,” but instead could be
entered only “upon [Nike]’s having demonstrated the
patentability of the substitute claims.” Adidas, 2014 WL
1713368, at *5. Ultimately, the Board denied Nike’s
motion because it failed to carry this burden. Nike now
argues that the understanding of the authority delegated
in § 316(a)(9) from Idle Free and from Proxyconn is incor-
rect in light of § 316(e):
Evidentiary standards.—In an inter partes re-
view instituted under this chapter, the petitioner
shall have the burden of proving a proposition of
unpatentability by a preponderance of the evi-
dence.
35 U.S.C. § 316(e) (emphasis added). On its face, § 316(e)
places the burden of proving unpatentability on the
petitioner as it relates to any patent claim included in the
Board’s decision instituting the IPR proceedings. Nike
interprets this provision as also placing on the petitioner
the burden of proving unpatentability of any newly pro-
posed substitute claim that the patent owner seeks to
introduce during the proceedings. When § 316(e) is read
in isolation, Nike’s position is not without some merit.
But after considering the entire statute, we disagree that
this section has such a broad command. See also Synop-
sys Inc. v. Mentor Graphics Corp., No. 14-1516, slip op. at
24–26 (Fed. Cir. Feb. 10, 2016).
First, Nike’s interpretation is in tension with Con-
gress’s direction that the PTO “shall prescribe regula-
tions” “setting forth standards and procedures for
allowing the patent owner to move to amend.” § 316(a)(9).
In other words, Congress delegated to the PTO the specif-
ic authority to establish the standards and procedures
with which a patent owner must comply to amend its
10 NIKE, INC. v. ADIDAS AG
patent during an IPR. Furthermore, the specific language
in § 316(a)(9) also directs the PTO to set “standards and
procedures . . . ensuring that any information submitted
by the patent owner in support of any amendment en-
tered under subsection (d) is made available to the pub-
lic.” In this way, § 316(a)(9)’s requirement that the patent
owner has some obligation to provide “information . . . in
support of any amendment,” indicates that the patent
owner carries an affirmative duty to justify why newly
drafted claims—which, unlike the issued claims, had
never been evaluated by the PTO—should be entered into
the proceeding.
This conclusion is further supported by inspection of
the language of § 316(e). Specifically, the evidentiary
standard set forth in § 316(e) applies to “an inter partes
review instituted under this chapter,” making clear that
the burden of proof is on the petitioner to prove unpatent-
able those issued claims that were actually challenged in
the petition for review and for which the Board instituted
review. Synopsys, No. 14-1516, slip op. at 24–26; see also
35 U.S.C. § 314(a) (authorizing IPR proceedings only
when the information in a petition for review and any
response “shows that there is a reasonable likelihood that
the petitioner would prevail with respect to at least 1 of
the claims challenged in the petition”). The evidentiary
standard of § 316(e), when read together with § 316(a)(9),
therefore does not necessarily apply to claims that were
not in existence at the time a petition is filed, such as
newly offered substitute claims proposed by a patent
owner in a motion to amend filed as part of an already-
instituted IPR proceeding.
For these reasons, Nike’s attempt to undo our conclu-
sion in Proxyconn—that the PTO may impose the burden
of establishing the patentability of proposed substitute
claims on the patent owner—is not persuasive. Nike’s
argument focuses solely on a small portion of the lan-
guage in § 316(e) and ignores the context supplied by the
NIKE, INC. v. ADIDAS AG 11
entirety of § 316. See Davis v. Mich. Dep’t of Treasury,
489 U.S. 803, 809 (1989) (“[S]tatutory language cannot be
construed in a vacuum. It is a fundamental canon of
statutory construction that the words of a statute must be
read in their context with a view to their place in the
overall statutory scheme.”). Our precedent recognizes
that § 316(a)(9) instructed the PTO to promulgate a
regulation setting forth the standard for motions to
amend a patent that might be filed as part of an IPR
proceeding. The PTO did just that in 37 C.F.R. § 42.20(c)
and, as we held in Proxyconn, the Board permissibly
interpreted this regulation as imposing the burden of
proving patentability of a proposed substitute claim on
the movant: the patent owner. Section 316(e), on the
other hand, speaks to a different context. Section 316(e)
places the burden on the petitioner to prove unpatentabil-
ity of any issued claim for which the Board has instituted
review and requires that the petitioner carry this burden
by a preponderance of the evidence. Thus, the Board did
not err by placing the burden on Nike to establish patent-
ability over the prior art of Nike’s proposed substitute
claims.
II. Obviousness
Nike next asserts that the Board nevertheless erred
in concluding that Nike failed to carry its burden of
establishing that proposed substitute claims 47–50 were
patentable under 35 U.S.C. § 103. Section 103 forbids
issuance of a claim when “the differences between the
subject matter sought to be patented and the prior art are
such that the subject matter as a whole would have been
obvious at the time the invention was made to a person
having ordinary skill in the art.” 35 U.S.C. § 103. The
ultimate determination of obviousness under § 103 is a
question of law based on underlying factual findings. In
re Baxter Int’l, Inc., 678 F.3d 1357, 1361 (Fed. Cir. 2012)
(citing Graham v. John Deere Co., 383 U.S. 1, 17–18
(1966)). These underlying factual considerations consist
12 NIKE, INC. v. ADIDAS AG
of: (1) the “level of ordinary skill in the pertinent art,” (2)
the “scope and content of the prior art,” (3) the “differ-
ences between the prior art and the claims at issue,” and
(4) “secondary considerations” of non-obviousness such as
“commercial success, long-felt but unsolved needs, failure
of others, etc.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
406 (2007) (quoting Graham, 383 U.S. at 17–18).
A claimed invention may be obvious even when the
prior art does not teach each claim limitation, so long as
the record contains some reason why one of skill in the art
would modify the prior art to obtain the claimed inven-
tion. See Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299,
1307 (Fed. Cir. 2006). Whether a person of ordinary skill
in the art would have had such a reason to combine the
teachings of prior art references is also a question of fact.
Pregis Corp. v. Kappos, 700 F.3d 1348, 1353 (Fed. Cir.
2012). Although an analysis of the teaching, suggestion,
or motivation to combine elements from different prior art
references is helpful, we must always be mindful that an
obviousness inquiry requires an “expansive and flexible
approach.” Kinetic Concepts, Inc. v. Smith & Nephew,
Inc., 688 F.3d 1342, 1360 (Fed. Cir. 2012) (citing KSR, 550
U.S. at 415, 419). Importantly, we have repeatedly em-
phasized that an obviousness inquiry requires examina-
tion of all four Graham factors and that an obviousness
determination can be made only after consideration of
each factor. Id.
On appeal, Nike objects to three components of the
Board’s obviousness analysis. First, Nike contests the
Board’s finding that a person of skill in the art would
have a reason to combine the two relevant prior art
references to arrive at the unitary upper claimed in the
substitute claims. Second, Nike argues that the Board
failed to consider Nike’s evidence of secondary considera-
tions in violation of this court’s precedent. Finally, Nike
contends that, at the very least, proposed claim 49 recites
a limitation absent from the cited prior art references.
NIKE, INC. v. ADIDAS AG 13
A. Motivation to Combine
In concluding that substitute claims 47–50 were un-
patentable, 1 the Board pointed to three prior art refer-
ences: (1) U.S. Patent No. 5,345,638 (Nishida), entitled
“Process for producing a shoe-shaped part from a web of
material and resulting shoe-shaped part”; (2) U.S. Patent
No. 2,178,941 (Schuessler I), entitled “Knitted helmet”;
and (3) U.S. Patent No. 2,150,730 (Schuessler II), entitled
“Knitting machine.” In its Final Written Decision, the
Board acknowledged that because Nike declined to file a
response to the petition, the Board would “accept as
unchallenged that Nishida teaches or suggests all of the
limitations of [the] original claims.” Adidas, 2014 WL
1713368, at *18. This left only the added limitation in
proposed substitute claims 47–50, namely, the recitation
of “flat knit edges free of surrounding textile structure.”
The Board found this limitation disclosed in Schuessler I
and Schuessler II (collectively, the Schuessler Refer-
ences). The Board then concluded that a person of skill in
the art would have reason to modify Nishida using the
teachings of the Schuessler References to arrive at the
unitary, flat-knitted textile upper recited in the proposed
substitute claims. Nike argues that this finding is not
supported by substantial evidence. We disagree.
1.
As mentioned above, the Board’s obviousness conclu-
sion rested on three prior art references: Nishida and the
two Schuessler References.
Nishida discloses a process that reduces the amount
of waste produced when manufacturing shoe uppers.
Nishida accomplishes this goal using a pattern where
1 Nike does not argue claims 48–50 separately from
claim 47 for the purposes of this argument.
14 NIKE, INC. v. ADIDAS AG
only just those parts of the web of material are
produced in the necessary quality, thickness, mul-
tilayers or the like which correspond to the pat-
tern or to an area of a pattern of the shoe upper or
the related sole part. The remaining area of the
web of material in contrast can consist of a simple
lightweight or inexpensive material quality, which
holds together only the patterns . . . .
’638 patent, 2:11–18. As shown in Figure 2 of Nishida,
the textile corresponding to the pattern for the shoe upper
is of a different quality or thickness than the remainder of
the textile web.
Id. at Figure 2. The process disclosed in Nishida then
requires that the portion of the pattern corresponding to
the shoe upper be cut from the surrounding textile web.
Id. at 2:20–22. After the upper is cut out, the “cutting
NIKE, INC. v. ADIDAS AG 15
waste” “represents a simple, lightweight and inexpensive
material.” Id. Nishida therefore improves on the prior
art, where the cutting waste consisted of the normal, more
“expensive tubular material, multilayer material or the
like.” Id. at 2:24–25.
The Schuessler References both issued in 1939 to the
same inventor. Schuessler I discloses “a method for
forming a . . . knitted helmet while rendering it unneces-
sary to cut any portion of the knitted swatch while at the
same time providing a finished helmet,” ’941 patent, 1:16–
19, rather than the traditional method of “form[ing] a
knitted piece and then cut[ting] out portions and sew[ing]
sections together to form the completed article,” id. at
1:4–6. This manufacturing process allows the creation of
the knitted article “in a continuous manner” “without
requiring cutting.” Id. at 1:24–26. Schuessler I further
recognizes that this cutting-free method avoids the need
for additional processing “to prevent unraveling” before
the parts are sewn together. Id. at 1:8. Schuessler I
specifically references Schuessler II as an example of a
knitting machine that can be used to form the knitted
helmet disclosed in Schuessler I. See also Adidas, 2014
WL 1713368, at *19 (“The knitted helmet [of Schuessler I]
may be formed from a swatch knit on a flat knitting
machine, such as that described in Schuessler II.”).
Schuessler II discloses a flat-knitting machine. ’730
patent, 1:1–5. Thus, the flat-knitting machine can be
used to manufacture the unitary textile element with flat-
knit (not cut) edges that can be stitched in certain places
to form a knitted helmet as disclosed in Schuessler I.
2.
The Board found that one of skill in the art would
have reason to combine Nishida and the Schuessler
References because these references are in similar fields
and address the same problem. Nike asserts that the
Board’s finding lacks substantial evidence because the
16 NIKE, INC. v. ADIDAS AG
processes in these references are sufficiently different
such that a person of skill in the art would not think to
combine them. According to Nike, Nishida discloses a
“subtractive” process, which requires the additional step
of cutting the textile from a larger textile web. Nike
contends that Nishida’s subtractive process bears no
resemblance to the “additive” process in the Schuessler
References, where the textile shape is created by flat
knitting to shape in the first instance. Nike’s argument is
not persuasive.
In KSR, the Supreme Court instructed that “any need
or problem known in the field of endeavor at the time of
invention and addressed by the patent can provide a
reason for combining the elements in the manner
claimed.” 550 U.S. at 420. The three references all relate
to the creation of three-dimensional, knitted articles
created in an efficient and economical way by joining the
edges of two-dimensional knit textiles. Nishida recogniz-
es the desire to minimize the amount of wasted textile
resulting from cutting the shoe upper pattern from a
larger textile web. Schuessler I describes its preferred
process, carried out by the flat-knitting machine in
Schuessler II, for creating an article knitted to a specific
shape “‘without requiring cutting.’” Adidas, 2014 WL
1713368, at *19 (emphasis in original) (quoting Schuess-
ler I, 1:25–26). We thus agree with the Board that the
prior art references “serve the same purpose” of efficiently
creating knitted articles. See id. And a skilled artisan
interested in Nishida’s preference to minimize waste in
the production process would have logically consulted the
well-known practice of flat-knitting, which eliminates the
cutting process altogether. In other words, a person of
skill in the art would have been motivated to address the
problem identified in Nishida by applying the teachings of
the Schuessler References to arrive at the invention in
Nike’s proposed substitute claims.
NIKE, INC. v. ADIDAS AG 17
Nike next points to our decision in Leo Pharmaceuti-
cals Products, Ltd. v. Rea, and argues that the age of
these references and the passage of time between their
public availability and the inventions recited in the pro-
posed substitute claims should have precluded the Board
from finding a reason to combine the references. 726 F.3d
1346, 1356–57 (Fed. Cir. 2013). Nike over reads our
precedent. The relevant portion of Leo Pharmaceuticals
stands for the proposition that the age of a reference can
highlight the fact that no one in the art understood the
problem to be solved.
True enough, Leo Pharmaceuticals discusses the
number of years that passed from the time the prior art
was invented until the filing of the patent at issue. See
id. at 1355, 1356–57. But, our reversal of the Patent
Board’s obviousness determination hinged on the fact that
nothing in the cited prior art appreciated the problem the
invention recognized and then solved. Id. at 1353 (“The
’013 patent, however, is not simply a combination of
elements found in the prior art. The inven-
tors . . . recognized and solved a problem . . . that the prior
art did not recognize.”). Because there was no prior
recognition of the problem solved by the subject invention,
there was no reason in the record why one of skill in the
art would attempt to combine the cited prior art to arrive
at the claimed invention. Id. at 1354 (“Only after recog-
nizing the existence of the problem would an artisan then
turn to the prior art and attempt to develop [the claimed
invention].”); see also id. at 1356–57 (rejecting an obvious-
to-try argument because “[u]ntil the advancement made
by the inventors . . . [t]he problem was not known, the
possible approaches to solving the problem were not
known or finite, and the solution was not predictable”).
In this way, our decision in Leo Pharmaceuticals is
entirely consistent with established precedent that “[t]he
mere age of the references is not persuasive of the unobvi-
ousness of the combination of their teachings, absent
18 NIKE, INC. v. ADIDAS AG
evidence that, notwithstanding knowledge of the refer-
ences, the art tried and failed to solve the problem.” In re
Wright, 569 F.2d 1124, 1127 (CCPA 1977); see also Iron
Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1325
(Fed. Cir. 2004) (“Absent a showing of long-felt need or
the failure of others, the mere passage of time without the
claimed invention is not evidence of nonobviousness.”). 2
Leo Pharmaceuticals recognizes the natural consequence
of this idea: Persons of skill in the art cannot have tried
and failed to solve the problem if they were never aware
of that problem to begin with. Thus, the number of years
that passed between the prior art and the claimed inven-
tion may be a relevant factor to underscore that skilled
artisans had long failed to appreciate the problem solved
by that invention. Here, there is no question that skilled
artisans knew of the desire to reduce waste when produc-
ing wearable, knitted shoe uppers because that problem is
expressly recognized in Nishida. Thus, Leo Pharmaceuti-
cals does not control the present case.
B. Secondary Considerations
In Nike’s brief supporting the motion to amend filed
at the Board, Nike argued that reducing waste was a
long-felt need in the shoe manufacturing industry and
that Nishida did not resolve this need because the process
in Nishida still resulted in some waste. Nike specifically
pointed to its expert’s declaration, which explained that
Nishida shows that reducing material waste dur-
ing manufacture of textile footwear uppers was a
2 As discussed in the next section, we must remand
for reconsideration of obviousness in light of Nike’s evi-
dence of secondary considerations. As such, it may be
appropriate for the Board to consider the passage of time
in connection with Nike’s secondary considerations evi-
dence on remand.
NIKE, INC. v. ADIDAS AG 19
long-felt need. . . . Nishida’s response to this prob-
lem was to make the “cutting waste” a simpler,
lighter or cheaper material. . . . Unlike Nishida,
which simply tried to make “cutting waste” less
expensive, the upper of substitute claim 47 solves
the long-felt need to reduce flat textile footwear
upper manufacturing waste by eliminating the
need to cut a textile element from a textile struc-
ture, thereby eliminating “cutting waste” (and the
associated cutting step) instead of simply making
the cutting waste cheaper.
J.A. 1647–48. Despite this argument and evidence, the
Board’s final written decision lacks a discussion, or even
an acknowledgement, of secondary considerations.
1.
Evidence of secondary considerations plays a critical
role in the obviousness analysis because it serves as
objective indicia of nonobviousness and “may often be the
most probative and cogent evidence in the record. It may
often establish that an invention appearing to have been
obvious in light of the prior art was not.” Stratoflex, Inc.
v. Aeroquip Corp., 713 F.2d 1530, 1538–39 (Fed. Cir.
1983). It is well-established that “evidence rising out of
the so-called ‘secondary considerations’ must always when
present be considered en route to a determination of
obviousness.” Id. at 1538. In fact, we have expressly
stated that “when secondary considerations are present
. . . it is error not to consider them.” In re Kao, 639 F.3d
1057, 1067 (Fed. Cir. 2011) (emphasis added).
Nike argues that the Board erred by failing to address
secondary considerations. Neither Adidas nor the PTO
disputes that the Board’s Final Written Decision lacks an
acknowledgment of Nike’s secondary considerations
evidence. Adidas instead argues that this omission is not
an automatically reversible error. Similarly, the PTO
argues that the Board did not err because it “implicitly
20 NIKE, INC. v. ADIDAS AG
found that reducing waste was not a long-felt but unre-
solved need.” Intervenor Br. 19 (emphasis added). Be-
cause long-felt need is indisputably a secondary
consideration, see Graham, 383 U.S. at 17–18, our prece-
dent dictates that the Board is bound to fully consider
properly presented evidence on the long-felt need for a
claimed invention. Recognizing that the Board operates
under stringent time constraints, we do not hold that it is
obliged to explicitly address conclusory and unsupported
arguments raised by a litigant. Cf. Fresenius USA, Inc. v.
Baxter Int’l, Inc., 582 F.3d 1288, 1296 (Fed. Cir. 2009)
(holding that a party cannot preserve an argument if it
presents “only a skeletal or undeveloped argument to the
trial court”). Under the particular circumstances present-
ed here, however, we conclude that the Board should have
explicitly acknowledged and evaluated Nike’s secondary
considerations evidence.
2.
Adidas attempts to minimize this gap in the Board’s
decision by relying on our decisions stating that there is
no requirement that a decision explicitly enumerate each
Graham factor and include findings specifically in terms
of the factors so long as “the required factual determina-
tions were actually made and it is clear that they were
considered while applying the proper legal standard of
obviousness.” Specialty Composites v. Cabot Corp., 845
F.2d 981, 990 (Fed. Cir. 1988); see also MySpace, Inc. v.
GraphOn Corp., 672 F.3d 1250, 1263–64 (Fed. Cir. 2012)
(finding no error for failing to explicitly mention second-
ary considerations because “the record establishe[d] that
the evidence was properly before and considered by the
[district] court”).
Both Specialty Composites and MySpace are distin-
guishable from the facts of this case. In these earlier
cases, we were able to confirm that the respective district
courts had weighed the evidence of secondary considera-
NIKE, INC. v. ADIDAS AG 21
tions and reached a conclusion on that evidence because it
was presented in written briefing and oral arguments
and, critically, the courts made fact findings on that
evidence. The absence of express recognition of secondary
considerations was inconsequential. Specialty Compo-
sites, 845 F.2d at 990 (affirming the district court’s obvi-
ousness determination because the record established
that “the required factual determinations were actually
made and it [was] clear that they were considered while
applying the proper legal standard of obviousness”);
MySpace, 672 F.3d at 1263–64 (finding no error for failing
to explicitly mention secondary considerations because
“the record establishe[d] that the evidence was properly
before and considered by the [district] court”). Under
these cases, we could perhaps be satisfied with the
Board’s decision, even without it mentioning the second-
ary considerations factor, if the decision had contained
some findings indicating a basis for why the Board had
rejected Nike’s evidence of long felt need. However, such
findings are absent in this case. See Loctite Corp. v.
Ultraseal Ltd., 781 F.2d 861, 873 (Fed. Cir. 1985) (“[W]e
must be convinced from the opinion that the district court
actually applied Graham and must be presented with
enough express and necessarily implied findings to know
the basis of the trial court’s opinion.”), overruled on other
grounds by Nobelpharma AB v. Implant Innovations, Inc.,
141 F.3d 1059 (Fed. Cir. 1998).
Contrary to the PTO’s arguments, the Board’s state-
ments describing the teachings of the prior art do not
amount to an “implicit” rejection of Nike’s long-felt-need
evidence and argument. The Board made these state-
ments in its motivation to combine analysis. See Adidas,
2014 WL 1713368, at *19. Nothing in that discussion, or
in any other part of the Board’s decision, suggests that
the Board weighed and rejected Nike’s evidence of long-
felt need to eliminate waste in the manufacture of knit
textile uppers en route to concluding that the proposed
22 NIKE, INC. v. ADIDAS AG
substitute claims were unpatentable as obvious. We must
therefore remand for the Board to examine Nike’s evi-
dence and its impact, if any, on the Board’s analysis
under the first three Graham factors.
3.
Adidas finally argues that we can alternatively affirm
the obviousness determination, despite the absence of
findings on secondary considerations, because there is no
nexus between Nike’s evidence and the merits of the
invention in substitute claims 47–50. See In re GPAC
Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995) (“For objective
evidence [of secondary considerations] to be accorded
substantial weight, its proponent must establish a nexus
between the evidence and the merits of the claimed inven-
tion.”). Whether the requisite nexus exists is a question of
fact. Pro-Mold & Tool Co., Inc. v. Great Lakes Plastics,
Inc., 75 F.3d 1568, 1573 (Fed. Cir. 1996). As such, we
cannot resolve this factual dispute in the first instance.
Comiskey, 554 F.3d at 974. We therefore express no
opinion on this argument, except to recognize that the
Board may certainly consider it on remand.
C. Claim 49
As mentioned above, Nike filed a motion to amend
pursuant to 35 U.S.C. § 316(d) in which it sought to cancel
the challenged patent claims and propose substitute
claims. Section 316(d) provides that a patent owner’s
ability to propose substitute claims is limited to proposing
a “reasonable number of substitute claims.” Id.
§ 316(d)(1)(B) (emphasis added). The PTO interpreted
this limit in 37 C.F.R. § 42.121(a)(3) by explaining that
“[t]he presumption is that only one substitute claim would
be needed to replace each challenged claim.” The regula-
tion also acknowledges that this presumption “may be
rebutted by a demonstration of need.” Id. In its Idle Free
informative decision, the Board further explained that
when a patent owner seeks to provide more than one
NIKE, INC. v. ADIDAS AG 23
substitute claim for a challenged claim, “the patent owner
needs to show patentable distinction of the additional
substitute claim over all other substitute claims for the
same challenged claim.” 2013 WL 5947697, at *5. If the
patent owner fails to carry this burden, “then at the
Board’s discretion, the proposed additional claim may be
denied entry, or it may be grouped with, or deemed as
standing and falling with, another substitute claim for the
same challenged claim, e.g., the first substitute claim, for
purposes of considering patentability over prior art.” Id.
Nike’s proposed substitute claims 48 and 49, both of
which depend from substitute claim 47, recite:
Claim 48. (Substitute for dependent claim 19)
The article of footwear recited in claim [16] 47,
wherein at least one of the first stitch configura-
tion and the second stitch configuration forms an
aperture in the [weft-knitted] flat knit textile el-
ement and the joined edges shape the flat knit
textile element to form a lateral region, a medial
region, an instep region and a heel region of the
upper.
Claim 49. (Second substitute for dependent claim
19) The article of footwear recited in claim [16] 47,
wherein at least one of the first stitch configura-
tion and the second stitch configuration forms [an
aperture] a plurality of apertures in the [weft-
knitted] flat knit textile element, the apertures
formed by omitting stitches in the flat knit textile
element and positioned in the upper for receiving
laces.
J.A. 1227. Claim 48 is directed to the general shape of the
flat-knitted textile upper. Claim 49, on the other hand, is
directed to a knit textile upper containing “apertures”
that can be used to receive laces and that are formed by
omitting stitches in the knit textile.
24 NIKE, INC. v. ADIDAS AG
Thus, because Nike proposed substitute claims 48 and
49 to replace challenged claim 19, under Idle Free, Nike
was required to demonstrate that proposed claims 48 and
49 were patentably distinct from one another. On appeal,
Nike argues only that the Board erred in its treatment of
claim 49 and asserts that the Board should have ultimate-
ly found claim 49 patentable.
1.
The Board explained that, under Idle Free, whether
both claim 48 and claim 49 could be substituted for origi-
nal claim 19 depended on whether those claims were
patentably distinct from each other. 3 Despite recognizing
this standard, the Board proceeded to compare the limita-
tions in each of these claims to the prior art. As to claim
48, the Board observed that “Nishida describes joining the
edges of the layout to form various portions of the upper.” 4
Adidas, 2014 WL 1713368, at *12. With respect to claim
49, the Board stated that “Nishida describes forming
lacing areas by knitting.” Id. The Board then concluded
that Nike had not demonstrated “that claims 48 and 49
are patentably distinct from each other.” Id. Rather than
deny entry of claims 48 and 49 on this basis, the Board
decided to follow the alternate option provided in Idle Free
and “group[ed] claim 49 with claim 48, for patentability
purposes.” Id.
We agree with Nike that, despite correctly reciting
the Idle Free standard that multiple substitute claims are
permissible if they are patentably distinct from each
other, the Board nevertheless did not engage in any such
analysis comparing proposed substitute claims 48 and 49.
3 Neither party objects to Idle Free’s interpretation
of 37 C.F.R. § 42.121(a)(3) or to the PTO’s interpretation
of § 316(d)(1)(B) in section 42.121(a)(3).
4 Nike does not dispute this conclusion.
NIKE, INC. v. ADIDAS AG 25
Thus, the Board’s decision to group substitute claims 48
and 49 together, meaning that claim 49 would stand and
fall with claim 48, is not consistent with the rule set out
by the Board in Idle Free. The Board has not provided a
supported basis for grouping the two claims together in
this manner. We must therefore remand for a proper
determination of how these claims should be treated per
the standard set forth in Idle Free, and, if necessary, a full
consideration of the patentability of each.
2.
Even though the Board did not engage in the proper
analysis to group claims 48 and 49 together, Adidas
argues that Nike never separately argued the patentabil-
ity of claim 49, and for that reason it was appropriate to
nevertheless find claim 49 unpatentable. Contrary to
Adidas’s assertion, Nike did argue to the Board that claim
49 was separately patentable. In its motion to amend,
Nike explained that “Nishida also does not disclose the
limitation of claim 49 regarding apertures.” J.A. 1233.
Nike supported this argument with its expert declaration:
Nishida also does not teach the limitation requir-
ing “a plurality of apertures in the flat knit textile
element, the apertures formed by omitting stitch-
es in the flat knit textile element and positioned
in the upper for receiving laces.” While figure 3 of
Nishida indicates the upper includes openings for
laces, Nishida contains no description or sugges-
tion of forming such openings by omitting stitches
in the layout. Thus, it appears such openings
were created by an additional manufacturing step,
e.g., punching out the openings.
J.A. 1610.
Adidas seems to imply that Nike insufficiently pre-
served the argument by raising it only in its motion to
amend and not in its reply brief. An issue is preserved for
26 NIKE, INC. v. ADIDAS AG
appeal, however, so long as it can be said that the tribu-
nal was “‘fairly put on notice as to the substance of the
issue.’” Consolidation Coal Co. v. United States, 351 F.3d
1374, 1378 (Fed. Cir. 2003) (quoting Nelson v. Adams
USA, Inc., 529 U.S. 460, 469 (2000)). Nike raised this
argument in its motion to amend and supported the
argument with its expert declaration. This was sufficient
to put the Board on notice that Nike was asserting the
“apertures formed by omitting stitches . . . and . . . for
receiving laces” limitation as a patentable distinction. We
therefore cannot agree with Adidas that Nike has waived
its arguments relating to the patentability of claim 49.
3.
Adidas also argues that we can nevertheless affirm
the Board’s conclusion that claim 49 is unpatentable in
light of Nishida and the Schuessler References. Adidas
even asserts that the Board itself engaged in this analysis
and found that the additional limitations in claim 49 were
disclosed in Nishida. To support this argument, Adidas
points to the Board’s above-mentioned, less-than-clear
analysis purporting to analyze whether claims 48 and 49
were “obvious over each other.” Adidas, 2014 WL
1713368, at *12.
Claim 49 adds the limitation: “a plurality of aper-
tures . . . formed by omitting stitches in the flat knit
textile element and positioned in the upper for receiving
laces.” J.A. 1227. The Board merely explained that
“[w]ith respect to the additional limitations of claim 49,
Nishida describes forming lacing areas by knitting.
Further, the Specification of the ’011 Patent describes the
omission of stitches, as recited in claim 49, to provide air
permeability to the upper.” Adidas, 2014 WL 1713368, at
*12 (citations omitted). The Board supported its conclu-
sion that “Nishida describes forming lacing areas by
knitting,” by first citing to (but not discussing) Nishida’s
NIKE, INC. v. ADIDAS AG 27
specification, which describes the concept of shoe laces
and lacing areas, as seen in Figures 2 and 3 of Nishida:
[T]he material can be woven or knitted in two or
more layers or can be especially thick or addition-
ally embroidered. Similarly, the lacing areas 23
and 24 can be made dimensionally stable in corre-
sponding manners, especially if, for example, no
additional trimmings, such as the lacing strips 25,
shown in FIG. 3, are to be applied.
’638 patent, 3:67–4:5.
’638 patent, Figure 2 (illustrating lacing areas 23 and 24
in Nishida’s knit textile upper pattern).
28 NIKE, INC. v. ADIDAS AG
’638 patent, Figure 3 (depicting a completed shoe with the
optional lacing strips 25 attached to lacing area 23 or 24).
In this same discussion, the Board also pointed to Nike’s
own patent, the ’011 patent, because it “describes the
omission of stitches . . . to provide air permeability to the
upper.” 5 Id. (citing ’011 patent, 9:57–62). Finally, the
Board cited, in a parenthetical, to Nishida’s disclosure
that the toe area of the upper can have “good air exchange
capability . . . by [using] a net-like woven or knitted
structure.” ’638 patent, 3:49–52. The Board did not
provide any explanation of the relevance of this passage
nor the conclusions that it drew therefrom. Nevertheless,
from these passages, the Board concluded that Nike had
5 We are troubled by the Board’s citation to the ’011
patent’s written description and the corresponding ap-
pearance of using the ’011 patent to find claim 49 un-
patentable. Given the confusing analysis of comparing
the substitute claims to the prior art to conclude that the
substitute claims are not patentably distinct from one
another, we are unsure for what purpose the Board was
referring to the ’011 patent’s written description. This
confusion can also be resolved on remand.
NIKE, INC. v. ADIDAS AG 29
not demonstrated that claims 48 and 49 were patentably
distinct from one another and then decided to group the
two proposed substitute claims together for patentability
purposes. At no point did the Board refer to the Graham
factors and conclude that Nishida renders proposed
substitute claim 49 obvious.
The Board’s statements are insufficient to support a
conclusion that proposed substitute claim 49 is unpatent-
able as obvious. As discussed above, obviousness deter-
minations require underlying fact-findings, many of
which are missing from the Board’s decision as it relates
to the specific limitations in claim 49. Adidas contends
that no additional fact-finding is needed by pointing to the
holes in the lacing area depicted in Nishida’s Figure 3.
But, the Board did not point to any disclosure in Nishida
that explains the manner in which these holes were
created, whether through knitting or some other way. In
fact, the Board’s short discussion did not even address the
presence of the holes in either claim 49 or Nishida. Fur-
ther, Nishida’s specification never specifically discusses
the lacing holes of its upper; they are only shown in
Figure 3. It may well be that the Board intended to
convey that claim 49 was obvious in light of Nishida
because skipping stitches to form apertures, even though
not expressly disclosed in Nishida, was a well-known
technique in the art and that understanding perhaps
would be a basis to conclude that one of skill in the art
would utilize this technique to create holes for accepting
shoe laces. 6 But, the Board did not articulate these
6 Adidas also asserts that the manner in which the
lacing holes are created is irrelevant because the “formed
by omitting stitches” portion of the limitation is nothing
more than a product-by-process limitation. Because this
was not raised to the Board during the IPR proceedings,
we decline to opine on the issue except to say that, if given
30 NIKE, INC. v. ADIDAS AG
findings. This portion of the Board’s analysis on whether
Nike’s proposal of claim 48 and 49 constituted a reasona-
ble number of substitute claims for originally issued claim
19 lacks critical fact-findings needed for any obviousness
determination. We are unable to engage in such fact-
finding in the first instance and must therefore remand
for further proceedings. See Ariosa, 805 F.3d at 1365
(“But we must not ourselves make factual and discretion-
ary determinations that are for the agency to make.”).
4.
Nike, on the other hand, requests that we reverse and
find claim 49 patentable because Nishida does not dis-
close the formation of apertures by omitting stitches.
Nike specifically argues that the Board misunderstood the
scope of claim 49 and the disclosure of Nishida. According
to Nike, the Board failed to realize that claim 49 requires
more than just knit “lacing areas,” but requires apertures
formed from skipping stitches in the knit pattern in an
orientation such that the resulting apertures are capable
of accepting shoe laces. See Adidas, 2014 WL 1713368, at
*12 (“With respect to the additional limitations of claim
49, Nishida describes forming lacing areas by knitting.”).
To support this argument, Nike points to its expert,
who opined that, “[w]hile figure 3 of Nishida indicates the
upper includes openings for laces, Nishida contains no
description or suggestion of forming such openings by
omitting stitches in the layout. Thus, it appears such
the opportunity, Adidas may raise this argument to the
Board on remand. See Ariosa Diagnostics v. Verinata
Health, Inc., 805 F.3d 1359, 1367 (Fed. Cir. 2015) (“We do
not direct the Board to take new evidence or, even, to
accept new briefing. The Board may control its own
proceedings, consistent with its governing statutes, regu-
lations, and practice.”).
NIKE, INC. v. ADIDAS AG 31
openings were created by an additional manufacturing
step, e.g., punching out the openings.” J.A. 1610. Nike
asserts that this interpretation of the lacing holes in
Nishida is correct based on Nishida’s explanation that the
knit upper “can be provided with an embroidery, especial-
ly with an English embroidery (i.e., the type of embroi-
dery by which a hole pattern is welded and which is
commonly used for the sewing of button holes), of a
trademark or another mark or identification on suitable
or preferred places.” ’638 patent, 4:33–38. Nike’s expert
further opined that there would have been “no motivation
or other reason that would have prompted one of ordinary
skill in the art at the time of the invention to modify
Nishida to include this additional feature.” J.A. 1613.
Based on this evidence, Nike urges us to find claim 49
patentable. We are unable to do so on this record be-
cause, as already explained, the Board has not made the
requisite factual findings. Importantly, there are no
findings from the Board about the scope and content of
the passages from Nishida’s written description on which
Nike now relies. Further, there is no discussion about
whether Nike’s expert’s statement was sufficient to
demonstrate that there was no motivation to modify
Nishida to arrive at lace holes formed by omitting stitch-
es. Thus, we cannot, as Nike requests, reverse and find
claim 49 patentable. Any resolution of this issue requires
a factual analysis that must be done by the Board in the
first instance.
III. Adidas’s Alternative Grounds for Affirmance
Adidas also argues that, even if we cannot affirm the
Board’s obviousness conclusion, there are numerous
alternative grounds on which we could affirm claim 49’s
unpatentability. First, Adidas argues that the Board’s
construction of “flat knit edges” is overly narrow and that,
under the correct construction, Nishida anticipates all of
the proposed substitute claims. Second, Adidas asserts
32 NIKE, INC. v. ADIDAS AG
that, even under the Board’s construction, Nishida alone
renders the proposed substitute claims obvious. Finally,
Adidas contends that we should affirm the outcome
reached by the Board because, contrary to the Board’s
decision, Nike’s proposed substitute claims are inade-
quately supported by the ’011 patent’s written descrip-
tion.
1.
We review the Board’s ultimate claim construction de
novo and any underlying factual determinations involving
extrinsic evidence for substantial evidence. Teva Pharm.
U.S.A., Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841–42 (2015).
When, as here, the intrinsic record fully determines the
proper construction, we review the Board’s claim con-
struction de novo. Id. at 840–42; see also Proxyconn, 789
F.3d at 1297.
Each of Nike’s proposed substitute claims is directed
to a “flat knit textile element . . . having flat knit edges
free of surrounding textile structure.” Before the Board,
Adidas argued that the broadest reasonable interpreta-
tion of “flat knit edges” should encompass not only flat-
knit edges that are created when a flat knit textile ele-
ment is knit to shape, but also edges created from cutting
a textile element from a larger textile. The Board disa-
greed and determined that the broadest reasonable con-
struction of the term “flat knit edges” is “an edge of a flat
knit textile element, which is itself flat knit, e.g., which is
not formed by cutting from a flat knit textile element.”
Adidas, 2014 WL 1713368, at *9. The Board arrived at
this interpretation because any broader interpretation
would be inconsistent with “the context of this claim
(including surrounding claim language) and in the context
of the Specification of this patent.” Id. (emphasis in
original).
On appeal, Adidas again argues that the Board erred
because “flat knit edge” does not preclude edges formed by
NIKE, INC. v. ADIDAS AG 33
cutting. We agree with the Board’s construction. The
language of proposed substitute claim 47 expressly recites
that a “flat knit textile element, the flat knit textile
element having flat knit edges free of surrounding textile
structure from which the textile element must be removed .
. . .” J.A. 1226 (emphasis added). This claim language
demonstrates that the scope of this claim is limited to a
flat-knit textile element where the flat knit edges have
not been removed, or cut, from a surrounding textile
structure. An interpretation that included a flat-knit
textile element that has been cut from a larger textile web
would contradict the express claim language. 7
We therefore affirm the Board’s conclusion that the
broadest reasonable interpretation of “flat knit edge” is
“an edge of a flat knit textile element, which is itself flat
knit, e.g., which is not formed by cutting from a flat knit
textile element.” Because we affirm the Board’s construc-
tion of the term “flat knit edges,” we need not consider
Adidas’s argument that Nishida would anticipate under
Adidas’s proposed construction.
2.
Adidas next argues that, even if we affirm the Board’s
construction of “flat knit edges,” we should nevertheless
affirm the Board’s conclusion that the proposed substitute
claims are unpatentable because Nishida alone, without
the Schuessler References, renders the claims obvious.
This argument also fails.
A single-reference obviousness conclusion would avoid
only the question of whether there existed a motivation to
7 Because Adidas is requesting an even broader
construction than the broadest reasonable instruction, our
conclusion that Adidas’s construction is incorrect would
not change under the standard used in district court
proceedings.
34 NIKE, INC. v. ADIDAS AG
combine the teachings of Nishida and the Schuessler
References. We have already found the Board’s finding on
this question supported by substantial evidence. Adidas’s
single-reference obviousness argument does not, however,
resolve the Board’s failure to address Nike’s evidence of
secondary considerations. We therefore reject this argu-
ment as an alternative ground to affirm on the record
before us.
3.
Adidas finally asserts that we should affirm the
Board’s conclusion that the proposed substitute claims are
unpatentable because they lack adequate written descrip-
tion support. Whether a claim is supported by the pa-
tent’s written description is a question of fact that we
review for substantial evidence. See Ariad Pharm., Inc. v.
Eli Lilly & Co., 598 F.3d 1336, 1355 (Fed. Cir. 2010) (en
banc); In re Morsa, 713 F.3d 104, 109 (Fed. Cir. 2013)
(factual determinations by the Board are reviewed for
substantial evidence).
To adequately support the claims, the written de-
scription “must clearly allow persons of ordinary skill in
the art to recognize that the inventor invented what is
claimed.” Ariad, 598 F.3d at 1351 (internal quotation
marks omitted). “Substantial evidence supports a finding
that the specification satisfies the written description
requirement when the essence of the original disclosure
conveys the necessary information—regardless of how it
conveys such information, and regardless of whether the
disclosure’s words are open to different interpretations.”
Inphi Corp. v. Netlist, Inc., 805 F.3d 1350, 1354 (Fed. Cir.
2015) (internal quotation marks omitted); see also In re
Ruschig, 379 F.2d 990, 995 (CCPA 1967) (the written
description requirement serves the same function as
“blaze marks on the trees” to help “find[] one’s way
through the woods”).
NIKE, INC. v. ADIDAS AG 35
Adidas argued that the “flat knit edge” limitation was
a negative limitation. Adidas further argued that nega-
tive limitations must satisfy a heightened written descrip-
tion requirement under our decision in Santarus, Inc. v.
Par Pharmaceutical, Inc., 694 F.3d 1344 (Fed. Cir. 2012).
The Board disagreed and concluded that, even if the
limitation was a negative limitation, it was “supported by
the positive disclosure of the various forms of the textile
element” shown in the ’011 patent’s written description.
Adidas, 2014 WL 1713368, at *9.
On appeal, Adidas again argues that the term “flat
knit edge” is a negative limitation and as such it must
satisfy a “heightened requirement” of written description
support. Appellant’s Br. 51 (citing Santarus, 694 F.3d at
1351). It is worth noting that we doubt that the present
limitation is properly characterized as a negative limita-
tion. Negative limitations generally recite an express
exclusion of material. For example, in Inphi, we ad-
dressed claim language that expressly excluded the use of
certain signal types in a claim relating to computer sys-
tem memory modules. Inphi, 805 F.3d at 1352–53 (“the
chip selects of the first and second number of chip selects
are DDR chip selects that are not CAS, RAS, or bank
address signals” (emphasis added)). Similarly, in Santa-
rus, we examined claim language that expressly excluded
the use of sucralfate in a claim directed to the treatment
of an acid-caused gastrointestinal disorder. Santarus, 694
F.3d at 1350 (“wherein the composition contains no su-
cralfate”).
Even if we assume, as the Board did, that this claim
limitation is a negative limitation, Adidas is incorrect that
any sort of heightened standard applies. “Negative limi-
tations are adequately supported when the specification
describes a reason to exclude the relevant limitation.” Id.
at 1351. We recently explained in Inphi that, contrary to
Adidas’s argument, Santarus did not create a heightened
36 NIKE, INC. v. ADIDAS AG
standard for written description support of negative
limitations. Inphi, 805 F.3d at 1356. We further ex-
plained that “[w]hen viewed in its proper context, Santa-
rus simply reflects the fact that the specification need
only satisfy the requirements of § 112, paragraph 1 as
described in this court’s existing jurisprudence.” Id.
(citing MPEP § 2173.05(i) (“If alternative elements are
positively recited in the specification, they may be explic-
itly excluded in the claims.”)). Thus, we need only consid-
er whether the disclosures of the ’011 patent, using the
customary standard for the written description require-
ment, allow persons of ordinary skill in the art to recog-
nize that the inventor invented a flat-knit textile with
flat-knit edges that are knit to shape rather than being
cut from a larger textile web.
In reaching its conclusion that the proposed substi-
tute claims were supported by the ’011 patent’s written
description, the Board emphasized Figures 8, 10, and 11.
’011 patent, Figures 8, 10, 11. These figures illustrate the
shape of textile element 40 before the formation of seams
to create the general shape for receiving a foot. Even
Adidas’s expert agreed that the upper illustrated in
Figure 8 “could be made on a flat knitting machine” and
“then the edges that are shown in Figure 8 would be flat
knitted.” J.A. 1483; see also J.A. 1574 (Nike’s expert
NIKE, INC. v. ADIDAS AG 37
opining that “[t]he disclosure in the ’011 patent that the
textile elements in Figures 8, 10, and 11 can be made
using flat knitting makes it clear that these textile ele-
ments can be knit to the shapes shown in these figures
(i.e., without surrounding textile structure) using flat
knitting.”).
These figures are in sharp contrast to Figure 9, which
is formed using a “wide-tube circular knitting machine,”
as opposed to a flat-knitting machine. ’011 patent, 6:66–
7:8, 7:41–43; see also id. at 7:29–32 (explaining that a
circular knitting machine “forms a generally cylindrical
textile structure”).
’011 patent, Figure 9. As shown in Figure 9, a circular
knit upper, as distinguished from flat knit, must be
removed from surrounding textile material by, for exam-
ple, cutting. In addition, Nike’s expert explained that the
embodiment illustrated in Figure 9 is made “using a
circular knitting process and requires that the textile
element [40] be formed as part of a larger textile structure
38 NIKE, INC. v. ADIDAS AG
[60]” and “requires additional processing to remove the
textile element [40] from the textile structure [60].” J.A.
1571. The Board agreed with Nike that the language
describing Figure 9 “does not limit the textile elements
depicted in Figures 8, 10, and 11 to those manufactured
according to the process of Figure 9.” Adidas, 2014 WL
1713368, at *15.
In addition, the Board cited Nike’s expert’s declara-
tion explaining that the textile upper shown in Figures 8,
10, and 11 “‘illustrates multiple examples in which the
textile element is shown in its final shape and is not
described as being formed as part of a larger textile
structure from which it must be removed.’” Id. (quoting
J.A. 1587). The written description and the originally
issued claims make a distinction between textile elements
that are removed from a larger textile web and those that
are not. For example, the patent discusses the textile
element 40 as “a single material element that is formed to
exhibit a unitary (i.e., one-piece) construction.” ’011
patent, 5:38–39. The patent then explains that “[t]extile
element 40 may be formed as a part of a larger textile
element,” which would then require that “textile element
40 is . . . removed from the larger textile element.” Id. at
5:43–45. In fact, only one of the originally issued, now
cancelled, independent claims is expressly directed to an
upper where “the textile element [is] removed from a
textile structure.” Id. at 13:47–14:6 (claim 36). Accord-
ingly, based on the Figures in the ’011 patent, the disclo-
sures in the written description, and the expert
testimony, we conclude that substantial evidence supports
the Board’s decision that the proposed substitute claims
are adequately supported by the written description of the
’011 patent.
NIKE, INC. v. ADIDAS AG 39
IV. Establishing Patentability Over Prior Art Not of
Record But Known to the Patent Owner
The Board’s Idle Free decision explained that, under
37 C.F.R. § 42.20(c), a motion to amend will be successful
only if the patent owner “persuade[s] the Board that the
proposed substitute claim is patentable over the prior art
of record, and over prior art not of record but known to the
patent owner.” 2013 WL 5947697, at *4 (emphasis added).
Nike attempted to carry this burden in its motion to
amend by simply stating that its proposed claims were
patentable over prior art known to Nike, but not part of
the record of the proceedings. See J.A. 1228. The Board
denied Nike’s request to enter proposed substitute claims
47–50 in part because Nike’s motion failed to address any
prior art reference that was not discussed in Adidas’s
petition for review or Adidas’s opposition to Nike’s motion
to amend, i.e., any prior art not of record. Adidas, 2014
WL 1913368, at *17 (finding Nike’s “conclusory state-
ment” to be “facially inadequate” under the Board’s un-
derstanding of Idle Free). As discussed above, as an
alternative ground to deny Nike’s motion, the Board went
on to consider the patentability of Nike’s proposed substi-
tute claims on the merits. Because we must vacate and
remand the Board’s obviousness conclusion, we must now
consider whether the Board’s denial of Nike’s motion to
amend for failure to show patentable distinction over
“prior art not of record but known to the patent owner”
provides an adequate basis for affirmance. For the rea-
sons explained below, we conclude that it is not.
After the Board’s decision in this case, the Board is-
sued MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040,
2015 WL 4383224 (PTAB July 15, 2015), which has been
designated by the PTO as a Representative Decision on
Motions to Amend. See Standard Operating Procedure 2,
at 3 (¶ IV.A–B) (explaining that Board decisions labeled
“representative” are “not binding authority,” but provide
“a representative sample of outcomes on a matter”). In
40 NIKE, INC. v. ADIDAS AG
MasterImage 3D, the Board “ma[d]e three points of clari-
fication regarding” Idle Free’s requirement that the patent
owner show that its proposed substitute claims are pa-
tentable over the prior art of record and also other prior
art known to the patent owner. Importantly, the Board
explained that “[t]he reference to ‘prior art known to the
patent owner’ . . . in Idle Free, should be understood as no
more than the material prior art that Patent Owner
makes of record in the current proceeding pursuant to its
duty of candor and good faith to the Office under 37
C.F.R. § 42.11, in light of the Motion to Amend.” Master-
Image 3D, Slip. Op. at 3. At oral argument in the present
case, the PTO confirmed this characterization of Master-
Image 3D. See Oral Argument at 29:13–29:22 available at
http://cafc.uscourts.gov/oral-argument-recordings/2014-
1719/all (“[MasterImage] is not a change of Idle Free, it’s
more of a clarification of Idle Free.”). The PTO further
explained that, although the Board’s denial of Nike’s
motion to amend was based on a reasonable reading of
Idle Free, given the clarification in MasterImage 3D, the
PTO acknowledged that the Board “read Idle Free too
aggressively in this decision.” Id. at 29:23–30:01.
We agree with the PTO. At the heart of Idle Free, as
interpreted by MasterImage 3D, is the question of wheth-
er the patent owner has submitted the necessary infor-
mation to comply with its duty of candor to the office. In
this case, there is not, and there has never been, an
allegation that Nike violated its duty of candor. Moreo-
ver, the PTO acknowledged that Nike’s statement about
the substitute claims’ patentability over prior art not of
record but known to Nike would satisfy the obligation as
explained in MasterImage 3D. Id. at 35:50–36:06. After
MasterImage’s explanation of Idle Free, we cannot see
how the statement used by Nike would be inadequate,
absent an allegation of conduct violating the duty of
candor. We therefore conclude that this was an improper
ground on which to deny Nike’s motion to amend.
NIKE, INC. v. ADIDAS AG 41
CONCLUSION
For the foregoing reasons, we vacate the Board’s obvi-
ousness determination and remand for further proceed-
ings consistent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
COSTS
No costs.