Lululemon USA Inc. recently scored a coveted win in a clash over the tech at the heart of Nike’s collection of knitted footwear. In a decision last week, the U.S. Patent Trial and Appeal Board (“PTAB”) said Lululemon’s challenge of the validity of claims in a much-litigated patent that protects part of Nike’s Flyknit line of sneakers can move forward despite Nike’s bid to get the proceeding waged against it tossed out. In handing Lululemon an early victory, the PTAB found that there is a “reasonable likelihood” that the athleisure giant would prevail with respect to at least one of the claims in the Nike utility patent that it is challenging.
In the newly-issued decision, a panel of judges for the PTAB gave the greenlight to Lululemon’s petition for inter partes review (“IPR”) of the claims that make up Nike’s “Flyknit” patent (Patent No. 8,266,749 B2), which covers “a method of manufacturing footwear with a knitted textile element.” As the basis for Lululemon’s quest to get the PTAB to invalidate Nike’s patent, it points to on a since-expired patent (Patent No. 5,345,638) – the “Nishida patent” – which describes a method for producing shoe uppers by cutting out a pattern from a strip of material and shaping it.
Given that a number of the claims in Nike’s Flyknit patent (including those involving the “simultaneous knitting” of a textile element) closely mirror those of the Nishida patent, Lululemon argues that Nike’s patented invention is anticipated (or “not novel”) and obvious, and thus, should be invalidated.
In response, Nike urged the PTAB to use its discretion to deny the petition on the grounds that Lululemon relies on arguments that have previously been presented to – and considered by – the U.S. Patent and Trademark Office (“USPTO”). Specifically, Nike argued that Lululemon maintains that the Nishida patent involved the “simultaneous knitting” of a textile element, which is a key element of the claims in Nike’s patent. The problem with that, according to Nike, is that during the original examination of Nike’s Flyknit patent back in 2011, the USPTO considered the Nishida patent and yet, ultimately granted Nike’s patent, concluding that the Nishida patent did not not adequately disclose the “simultaneous knitting” process that Nike claimed.
While Nike argued that the PTAB should use discretion when “the same or substantially the same prior art or arguments have previously been presented to the office,” the PTAB refused to side with the Beaverton, Oregon-based titan. As Administrative Patent Judge Josiah C. Cocks wrote in PTAB’s recent decision, “Given the inconsistencies that have emerged in the record in connection with [the Nishida patent’s] disclosures accounting for the ‘simultaneously knitting’ limitation,’ this proceeding is ripe to resolve those inconsistencies.”
In reaching this conclusion, the PTAB applied the Advanced Bionics test, a framework that is used to determine whether the PTAB should deny institution of an IPR on the basis that substantially the same art or arguments previously were presented to the USPTO. Here, the PTAB found that the USPTO examiner’s review of the prior art in connection with the Nishida patent in 2011 and its relevance to Nike’s patent was not adequate to call for a discretionary denial and should be looked at again. “Misapprehending or overlooking specific teachings of the relevant prior art where those teachings impact patentability of the challenged claims … does not lend itself to a conclusion that the exercise of discretion to deny institution is appropriate,” Judge Cocks wrote.
> What’s Next: By granting the IPR, the PTAB has initiated a trial to fully review the patentability of Nike’s patent claims. The trial will delve into the technical details of both the Nike and Nishida patents, with potential implications for Nike’s ongoing litigation, including a case it waged against Lululemon, and future enforcement of its patent rights.
THE BIGGER PICTURE: Far from an obscure patent, Nike has made headlines in connection with its enforcement of the Flyknit patent against multiple top brands, including (but certainly not limited to) Lululemon. The Swoosh sued Lululemon last year for allegedly infringing the knitted process patent, as well as two other utility patents that it holds for its Flyknit technology. In the complaint that it filed in January 2023, Nike claims that it “invests heavily in research, design, and development,” and routinely takes steps “to protect its innovative technologies, including by filing and obtaining patents around the world,” and that these “efforts are key to [its] success.” Among the patents that it holds are three that protect elements of the Flyknit tech, which Lululemon is allegedly infringing by way of its own footwear.
Lululemon likely initiated the proceeding at hand as a direct defense to part of the case waged against it by Nike, which is still underway in a New York federal court. If Lululemon can successfully challenge the validity of Nike’s ‘749 patent, it can sidestep at least one of the infringement causes of action waged against it by Nike in that case.
In separate suits, Nike has taken on New Balance and Skechers over their alleged infringement of its Flyknit patents. Those cases are also still underway. And in a since-settled suit, Nike took on adidas and Puma over the patent. In the Nike v. adidas dispute, Nike’s lawsuit led to the PTAB evaluating the patent after adidas filed its own petition for review. In that administrative case, the board rejected the invalidation of any claims, a decision that the Federal Circuit ultimately OK’d in 2020.
Representatives for Nike and Lululemon did not immediately return requests for comment.
The matter is Lululemon USA Inc. v. Nike Inc., P.T.A.B. IPR2024-00460.
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