Background
Adidas AG petitioned for inter partes review (IPR) of two Nike patents covering methods of manufacturing footwear with a knitted textile upper — the technology underlying Nike’s popular Flyknit line of athletic shoes. The PTAB conducted review and issued final written decisions finding that Adidas had failed to show the challenged claims were obvious over the prior art, sustaining Nike’s patents. Adidas appealed both decisions to the Federal Circuit.
Nike challenged Adidas’s right to appeal at all, arguing that Adidas lacked Article III standing because Nike had never threatened to sue Adidas for infringement of the specific patents at issue. Without a concrete threat of litigation, Nike argued, Adidas had no “injury in fact” and therefore no constitutional standing to seek judicial review of the PTAB’s decisions.
The Court’s Holding
The Federal Circuit held that Adidas had standing and affirmed the PTAB’s merit decisions. On standing, the court held that a direct competitor need not face a specific, concrete threat of infringement litigation to establish the requisite injury in fact. It is generally sufficient to show that the appellant has engaged in, is engaging in, or will likely engage in activity that would give rise to a possible infringement suit — and Adidas satisfied that standard.
Adidas and Nike were unambiguously direct competitors in the athletic footwear market. Nike had previously accused Adidas of infringing a different Flyknit patent covering similar knitted upper technology, and had expressly stated its intent to protect its global Flyknit rights against further infringement. Nike had also refused to grant Adidas a covenant not to sue under the patents at issue. Under these circumstances, Adidas’s risk of infringement exposure was concrete and substantial — not hypothetical. On the merits, the court affirmed PTAB’s findings that Adidas failed to demonstrate a motivation to combine the prior art references in the manner claimed.
Key Takeaways
- A petitioner who loses an IPR can appeal the final written decision to the Federal Circuit without a specific, direct threat of infringement suit — the risk of being sued based on competing commercial activity is enough to establish standing.
- Evidence that the parties are direct competitors, that the patent owner has asserted related patents against the appellant, and that the patent owner has refused to grant a covenant not to sue all support standing.
- The decision clarified the standing doctrine for PTAB appeals: the court will look at the realistic commercial and litigation risk the petitioner faces, not just whether a formal cease-and-desist letter has been sent.
- On the obviousness merits, PTAB findings are highly deferential and will be sustained if supported by substantial evidence, even where the challenger has presented competing prior art combinations.
Why It Matters
The standing ruling in Adidas v. Nike resolved a recurring procedural question in IPR appeals: must a petitioner be directly threatened with a lawsuit before it can seek Federal Circuit review of an adverse PTAB decision? The answer is no — and this matters enormously for the IPR system. Companies frequently file IPR petitions proactively, before being sued, to challenge patents they believe threaten their business. Allowing patent owners to moot those challenges by simply never sending a formal threatening letter would have undermined the value of IPR as a defensive tool for the technology industry.
The decision is also notable in the fashion and athletic footwear industry, where Nike and Adidas have waged a prolonged intellectual property war over knitted textile upper technology. By affirming that competitive risk alone can confer standing, the Federal Circuit ensured that competitors in closely watched markets can use the IPR system as a full-cycle defense mechanism, from petition through appeal, without needing to wait for a formal infringement accusation before seeking judicial review of a PTAB determination.