Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01719/USCOURTS-ca13-14-01719-1/pdf.json

Parties Involved:
Adidas AG
Appellee
Nike, Inc.
Appellant

Document Text:

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 Pickering 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 repreCase: 14-1719 Document: 56-2 Page: 1 Filed: 02/11/2016
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 Trademark 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 substitute claims 47–50. The Board granted Nike’s motion to 

cancel claims 1–46, but denied the motion as to the substitute 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 affirmin-part, vacate-in-part, and remand for further proceedings 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 

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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 specifically 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 manufactured, 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 fashion, 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.

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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 incorCase: 14-1719 Document: 56-2 Page: 4 Filed: 02/11/2016
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 textile 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 opening 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 patentability 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 

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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 statement 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 scintilla. It means such relevant evidence as a reasonable mind 

might accept as adequate to support a conclusion.” Consol. 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 patentability of its proposed substitute claims 47–50. Second, Nike 

contests the Board’s finding on the merits that the proposed 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 enacted 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). 

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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 challenged 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 requesting 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 authority,” but provide “Board norms on recurring issues,” “guidance 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 

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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 distinction [of the substitute claims] over the prior art of record—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 examination or reexamination where a patent examiner performs a prior art search and independently conducts a 

patentability analysis of all claims, whether newly proposed 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 petitioner may choose not to challenge the patentability 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 patentability of substitute claims over the prior art 

of record, an amended patent could issue despite 

the PTO having before it prior art that undermines 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 petitioner 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. 

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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 incorrect in light of § 316(e):

Evidentiary standards.—In an inter partes review instituted under this chapter, the petitioner 

shall have the burden of proving a proposition of 

unpatentability by a preponderance of the evidence. 

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 proposed 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 Synopsys 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 Congress’s direction that the PTO “shall prescribe regulations” “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 specific authority to establish the standards and procedures 

with which a patent owner must comply to amend its 

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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 entered under subsection (d) is made available to the public.” 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 unpatentable 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 alreadyinstituted IPR proceeding. 

For these reasons, Nike’s attempt to undo our conclusion 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 language in § 316(e) and ignores the context supplied by the 

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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 unpatentability 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 patentability 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 

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of: (1) the “level of ordinary skill in the pertinent art,” (2) 

the “scope and content of the prior art,” (3) the “differences 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 invention. 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 emphasized that an obviousness inquiry requires examination 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 considerations 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.

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A. Motivation to Combine

In concluding that substitute claims 47–50 were unpatentable,1 the Board pointed to three prior art references: (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 References). 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 conclusion 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.

 

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only just those parts of the web of material are 

produced in the necessary quality, thickness, multilayers or the like which correspond to the pattern 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 

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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 unnecessary 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 flatknit (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 

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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 recognizes 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 Schuessler 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. 

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Nike next points to our decision in Leo Pharmaceuticals 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 proposed 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 inventors . . . 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 recognizing 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 obviousto-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 unobviousness of the combination of their teachings, absent 

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evidence that, notwithstanding knowledge of the references, 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 invention 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 producing wearable, knitted shoe uppers because that problem is 

expressly recognized in Nishida. Thus, Leo Pharmaceuticals 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 during 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 evidence 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 evidence on remand.

 

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NIKE, INC. v. ADIDAS AG 19

long-felt need. . . . Nishida’s response to this problem 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 structure, 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

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20 NIKE, INC. v. ADIDAS AG

found that reducing waste was not a long-felt but unresolved need.” Intervenor Br. 19 (emphasis added). Because long-felt need is indisputably a secondary 

consideration, see Graham, 383 U.S. at 17–18, our precedent 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 presented 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 determinations 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 secondary considerations because “the record establishe[d] that 

the evidence was properly before and considered by the 

[district] court”). 

Both Specialty Composites and MySpace are distinguishable 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 consideraCase: 14-1719 Document: 56-2 Page: 20 Filed: 02/11/2016
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 Composites, 845 F.2d at 990 (affirming the district court’s obviousness 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 secondary 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 statements 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 statements 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 longfelt need to eliminate waste in the manufacture of knit 

textile uppers en route to concluding that the proposed 

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22 NIKE, INC. v. ADIDAS AG

substitute claims were unpatentable as obvious. We must 

therefore remand for the Board to examine Nike’s evidence 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 invention.”). 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 regulation 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 

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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 configuration and the second stitch configuration forms an 

aperture in the [weft-knitted] flat knit textile element 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 configuration and the second stitch configuration forms [an 

aperture] a plurality of apertures in the [weftknitted] 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.

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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 ultimately found claim 49 patentable.

1.

The Board explained that, under Idle Free, whether 

both claim 48 and claim 49 could be substituted for original claim 19 depended on whether those claims were 

patentably distinct from each other.3 Despite recognizing 

this standard, the Board proceeded to compare the limitations 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.

 

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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 patentability 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 requiring “a plurality of apertures in the flat knit textile 

element, the apertures formed by omitting stitches 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 suggestion 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 preserved the argument by raising it only in its motion to 

amend and not in its reply brief. An issue is preserved for 

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26 NIKE, INC. v. ADIDAS AG

appeal, however, so long as it can be said that the tribunal 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 apertures . . . 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 conclusion that “Nishida describes forming lacing areas by 

knitting,” by first citing to (but not discussing) Nishida’s 

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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 additionally embroidered. Similarly, the lacing areas 23 

and 24 can be made dimensionally stable in corresponding 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).

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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 appearance of using the ’011 patent to find claim 49 unpatentable. 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.

 

Case: 14-1719 Document: 56-2 Page: 28 Filed: 02/11/2016
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 unpatentable as obvious. As discussed above, obviousness determinations 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. Further, 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 

 

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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 reasonable 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 factfinding 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 discretionary 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 disclose 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, regulations, and practice.”). 

 

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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, especially with an English embroidery (i.e., the type of embroidery 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 because, 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 stitches. 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 

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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 inadequately supported by the ’011 patent’s written description.

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 construction 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 interpretation of “flat knit edges” should encompass not only flatknit edges that are created when a flat knit textile element is knit to shape, but also edges created from cutting 

a textile element from a larger textile. The Board disagreed and determined that the broadest reasonable construction 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 

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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 construction 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. 

 

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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 argument 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 description support. Whether a claim is supported by the patent’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 description “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”). 

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NIKE, INC. v. ADIDAS AG 35

Adidas argued that the “flat knit edge” limitation was 

a negative limitation. Adidas further argued that negative limitations must satisfy a heightened written description 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 limitation. Negative limitations generally recite an express

exclusion of material. For example, in Inphi, we addressed claim language that expressly excluded the use of 

certain signal types in a claim relating to computer system 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 Santarus, 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 sucralfate”). 

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 limitations 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 

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36 NIKE, INC. v. ADIDAS AG

standard for written description support of negative 

limitations. Inphi, 805 F.3d at 1356. We further explained that “[w]hen viewed in its proper context, Santarus 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 explicitly excluded in the claims.”)). Thus, we need only consider whether the disclosures of the ’011 patent, using the

customary standard for the written description requirement, allow persons of ordinary skill in the art to recognize 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 substitute 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 

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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 elements 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 example, 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 

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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 declaration 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). Accordingly, based on the Figures in the ’011 patent, the disclosures 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. 

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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 statement” to be “facially inadequate” under the Board’s understanding 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 substitute 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 reasons explained below, we conclude that it is not. 

After the Board’s decision in this case, the Board issued 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 

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40 NIKE, INC. v. ADIDAS AG

MasterImage 3D, the Board “ma[d]e three points of clarification regarding” Idle Free’s requirement that the patent 

owner show that its proposed substitute claims are patentable 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.” MasterImage 3D, Slip. Op. at 3. At oral argument in the present 

case, the PTO confirmed this characterization of MasterImage 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 whether the patent owner has submitted the necessary information 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. Moreover, 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.

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NIKE, INC. v. ADIDAS AG 41

CONCLUSION

For the foregoing reasons, we vacate the Board’s obviousness determination and remand for further proceedings consistent with this opinion.

AFFIRMED-IN-PART, VACATED-IN-PART, AND 

REMANDED

COSTS

No costs.

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