Adidas AG v. Nike, Inc.

• Decision Date: 02 July 2018
• Docket Number: 2018-1180, 2018-1181
• Parties: ADIDAS AG, Appellant v. NIKE, INC., Appellee
• Court: U.S. Court of Appeals — Federal Circuit

894 F.3d 1256

ADIDAS AG, Appellant

v.NIKE, INC., Appellee

2018-1180, 2018-1181

United States Court of Appeals, Federal Circuit.

ISSUED AS MANDATE: July 2, 2018

Mitchell G. Stockwell, Kilpatrick Townsend & Stockton LLP, Atlanta, GA, for appellant. Also represented by Vaibhav P. Kadaba, Michael T. Morlock, Tiffany L. Williams.

Christopher J. Renk, Banner & Witcoff, Ltd., Chicago, IL, for appellee. Also represented by Aaron Patrick Bowling, Michael Joseph Harris.

Before Moore, Wallach, and Taranto, Circuit Judges.

ON MOTION

Moore, Circuit Judge.

ORDER

In light of the Supreme Court’s recent decision in SAS Institute Inc. v. Iancu , ––– U.S. ––––, 138 S.Ct. 1348, 200 L.Ed.2d 695 (2018), Adidas AG ("Adidas") moves to remand this appeal to the Patent Trial and Appeal Board for additional proceedings. Nike, Inc. opposes. We grant the motion and remand.

Nike owns U.S. Patent Nos. 7,814,598 ("the ’598 patent") and 8,266,749 ("the ’749 patent"). Adidas petitioned the Director of the United States Patent and Trademark Office to institute inter partes review of claims 1–13 of the ’598 patent and claims 1–9, 11–19, and 21 of the ’749 patent. Adidas’s petitions raised two grounds in challenging each of those claims: ground 1 argued that each claim would have been obvious based on the Reed and Nishida references and ground 2 argued that each claim would have been obvious based on the Castello, Fujiwara, and Nishida references.

The Board, acting on behalf of the Director, granted Adidas’s petitions and instituted inter partes review of all of the challenged claims. However, the Board limited its review proceedings to ground 1. On October 19, 2017, the Board issued its final written decisions, holding that Adidas had not met its burden of demonstrating any of the claims would have been obvious based on ground 1. The Board never addressed the merits of the combination of references argued in ground 2 or suggested that its conclusions as to ground 1 would be dispositive as to ground 2 which was based on a different combination of references. Adidas timely appealed. After the Supreme Court issued its decision in SAS , Adidas promptly moved to remand for the Board to consider ground 2.

Adidas argues that remand is appropriate under SAS for the Board to issue final written decisions addressing ground 2. Adidas contends that "[t]he Supreme Court’s reasoning in SAS— that the Petition controls the scope of the proceeding—likewise requires that the Board institute on all grounds raised in the Petition." Adidas argues that the Patent Office recently issued public guidance indicating that, in light of SAS , if a trial is instituted, the Board will institute review on all challenges raised in the petitions. See Guidance on the Impact of SAS on AIA Trial Proceedings (Apr. 26, 2018). Nike responds that SAS is "irrelevant to the present appeal" because SAS requires only institution as to all claims, as was done here, and that Adidas has waived any "all grounds" argument by failing to present it to the Board.

We hold that remand is appropriate here. The Court explained in SAS that in establishing inter partes review, Congress set forth "a process in which it’s the petitioner, not the Director, who gets to define the contours of the proceeding."

138 S.Ct. at 1355. The Court held that if the Director institutes review proceedings, the review must proceed "in accordance with or in conformance to the petition," id . at 1356 (internal quotations omitted), a "petition describing ‘each claim challenged’ and ‘the grounds on which the challenge to each claim is based,’ " id . at 1355 (quoting 35 U.S.C. § 312(a)(3) ). "Nothing suggests the Director enjoys a license to depart from the petition and institute a different inter partes review of his own design." Id . at 1356 (emphasis in original). The Court found that "the petitioner’s petition, not the Director’s discretion, is supposed to guide the life of the litigation," id...