Federal Circuit provides illustrative application of InTouch Techs

In support of the proposition that “The obviousness inquiry does not merely ask whether a skilled artisan could combine the references, but instead asks whether “they would have been motivated to do so.”  InTouch Techs., Inc. v. VGO Commc’ns, Inc., 751 F.3d 1327, 1352 (Fed. Cir. 2014).  I have often used Belden Inc. v Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015) (“Obviousness concerns whether a skilled artisan not only could have made, but would have been motivated to make the combinations or modifications of PA to arrive at the claimed invention.”) for this purpose.

The fact pattern of Adidas v Nike, 2019-1787, 2019-1788, (Fed. Cir. June 25, 2020) may prove very helpful in crafting such arguments.

Nike owns US Patent Nos. US7814598 (“the ‘598 patent”) and US8266749 ( “the ‘749 patent”).  The claims of both the ‘749 patent and the ‘598 patent are directed to methods of manufacturing an article of footwear.  Claim 1 of the ‘598 patent recites the first step of mechanically manipulating a yarn with a circular knitting machine to form a cylindrical textile structure, while the first step of claim 1 of the ‘749 patent recites simultaneously knitting a textile element with a surrounding textile structure.  The remaining steps of both recite that the removal of a textile element from the surrounding structure and incorporating the textile element into an upper of the article of footwear.

Adidas petitioned for inter partes review of claims 1-13 of the ‘598 patent and claims 1-9, 11-19 and 21 of the ‘749 patent.  PTAB found that Adidas had not established the obviousness of the contested claims and Adidas appealed, whereupon Nike asserted they had no standing for lack of an ‘injury in fact” since Nike had “not sued or threatened to sue Adidas for infringement of either the ‘598 or the ‘749 patent.”

The Federal Circuit first disposed of Nike’s standing argument using its precedent in E.I. DuPont de Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1004 (Fed. Cir. 2018).  Specifically, the Court held that “An appellant need not face “a specific threat of infringment litigation by the patentee” to establish the requisite injury in an appeal from a final written decision in an inter partes review.  The court then noted that the established facts that 1) Adidas and Nike are direct competitors, 2) Nike had accused Adidas of infringing a German patent directed to the same technology in 2012 and expressed an intent to protect Nike’s rights to the technology globally, 3) Nike had asserted the patents at issue against a third-party product similar to Adidas’ and 4) Nike had refused to grant Adidas a covenant not to sue, provided Adidas with Article III standing to appeal.

Unfortunately, the right to show up did not translate into a win and the Federal Circuit agreed with the Board that Adidas had not established that the challenged claims were obvious.

Adidas alleged that the challenged claims were obvious over a combination of US Patent Nos. US3985003 to Reed (hereinafter “Reed”) and US5345638 to Nishida (hereinafter “Nishida”) or alternatively, the combination of Nishida with US Patent Nos. 4,038,840 to Castello and 6,330,814 to Fujiwara.  Though PTAB found that Nishida disclosed the simultaneous knitting of a textile element within a surrounding textile structure recited in claim 1 of the ‘749 patent,  to my eye at least, Nishida discloses the provision of a web (corresponding to the claimed “textile structure”) onto which textile elements are applied.  But for that, in my opinion, Nishida is so closely related that it could have been applied as an anticipatory reference of the ‘749 patent.  Nishida does not disclose the circular knitting machine recited in claim 1 of the ‘598 patent, a deficiency allegedly cured by Reed.

Both Reed and Nishida taught that objects for their respective inventions included reducing the cost of manufacturing and/or providing a multiplicity of garments on a single web of fabric.  Importantly, Reed also stated an object of providing a “preseamed and preformed knitted garment.”

PTAB found that all limitations of the claims at issue could be found in the combination of Reed with Nishida, but that Adidas had failed to establish the requisite motivation to combine.  In particular, the Board held Adidas had not sufficiently addressed that while Reed requires preseaming, Nishida teaches seaming of the textile element only after it has been cut from the textile structure.  The Board concluded that the combination of Reed with Nishida would “require the alteration of the principles of operation of Reed or would render Reed inoperable for its intended purpose.”

On appeal Adidas argued that both Reed and Nishida taught knitting in multiple layers, and both taught the same objects of reducing waste.  As such, Adidas argued, the skilled artisan would have been motivated to combine the references to reduce waste.  In affirming the Board, the Federal Circuit held:

The obviousness inquiry does not merely ask whether a skilled artisan could combine the references, but instead asks whether “they would have been motivated to do so.”  Fundamental differences between the references are central to this motivation to combine inquiry…the Board properly considered [these] fundamental differences in the seaming techniques of Reed and Nishida.  Rather than address these differences, Adidas merely cites to “Reed’s other objects” concerning cost reduction and garment production, which the Board already considered and rejected.

In other words, the Federal Circuit held that either or both primary references met each and every limitation of the claims at issue, i.e., found no fundamental differences between the references and the claims at issue, but yet maintained the Board’s decision of the validity of Nike’s claims based on the differences between the references themselves.

I love this case.