throbber
Case: 21-1903 Document: 58 Page: 1 Filed: 09/01/2022
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`
`
`NOTE: This disposition is nonprecedential.
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`NIKE, INC.,
`Appellant
`
`v.
`
`ADIDAS AG,
`Appellee
`
`KATHERINE K. VIDAL, UNDER SECRETARY OF
`COMMERCE FOR INTELLECTUAL PROPERTY
`AND DIRECTOR OF THE UNITED STATES
`PATENT AND TRADEMARK OFFICE,
`Intervenor
`______________________
`
`2021-1903
`______________________
`
`Appeal from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in No. IPR2013-
`00067.
`
`______________________
`
`Decided: September 1, 2022
`______________________
`
`MICHAEL JOSEPH HARRIS, Arnold & Porter Kaye
`Scholer LLP, Chicago, IL, argued for appellant. Also rep-
`resented by CHRISTOPHER J. RENK; BRIDGETTE BOYD,
`Washington, DC.
`
`

`

`Case: 21-1903 Document: 58 Page: 2 Filed: 09/01/2022
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`2
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`NIKE, INC. v. ADIDAS AG
`
`
` MICHAEL T. MORLOCK, Kilpatrick Townsend & Stock-
`ton LLP, Atlanta, GA, argued for appellee. Also repre-
`sented by VAIBHAV P. KADABA, MITCHELL G. STOCKWELL.
`
` BENJAMIN T. HICKMAN, Office of the Solicitor, United
`States Patent and Trademark Office, Alexandria, VA, ar-
`gued for intervenor. Also represented by PETER J. AYERS,
`THOMAS W. KRAUSE, FARHEENA YASMEEN RASHEED,
`MEREDITH HOPE SCHOENFELD.
`______________________
`
`Before PROST, CHEN, and STOLL, Circuit Judges.
`CHEN, Circuit Judge.
`This is an appeal from a third final written decision by
`the Patent Trial and Appeal Board (Board) in an inter
`partes review instituted in 2012. On two prior occasions,
`we affirmed-in-part, vacated-in-part, and remanded to the
`Board. See generally Nike, Inc. v. Adidas AG, 812 F.3d
`1326 (Fed. Cir. 2016) (Nike I), overruled on other grounds
`by Aqua Prods., Inc. v. Matal, 872 F.3d 1290, 1296 n.1 (Fed.
`Cir. 2017) (en banc); Nike, Inc. v. Adidas AG, 955 F.3d 45
`(Fed. Cir. 2020) (Nike II).
`Nike, Inc. (Nike) now appeals the Board’s determina-
`tion that proposed substitute claim 49 of U.S. Patent
`No. 7,347,011 (’011 patent) is unpatentable under 35
`U.S.C. § 103. Nike argues: (1) that the Board erred in find-
`ing that the Board, rather than the petitioner, bears the
`burden of persuasion for unpatentability challenges to pro-
`posed substitute claims raised sua sponte by the Board;
`(2) that the Board in this case effectively placed the burden
`of persuasion on Nike; and (3) that the Board’s obviousness
`analysis is unsupported by substantial evidence and vio-
`lates the Administrative Procedure Act (APA). We need
`not address Nike’s first argument because both the Board
`and adidas AG (Adidas) met the burden of persuasion in
`
`

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`Case: 21-1903 Document: 58 Page: 3 Filed: 09/01/2022
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`NIKE, INC. v. ADIDAS AG
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`3
`
`this case. As a result, the Board did not improperly place
`the burden on Nike. Finally, substantial evidence supports
`the Board’s obviousness analysis and Nike’s APA-based ar-
`gument lacks merit. We therefore affirm.
`BACKGROUND
`I
`Conventional athletic footwear comprises two primary
`elements: a sole structure and an upper. The sole struc-
`ture cushions the foot and provides traction, while the up-
`per covers and positions the foot. ’011 patent col. 1
`ll. 13–24.
`The ’011 patent discloses footwear with a knitted tex-
`tile upper and a sole structure secured to the upper. Id. at
`col. 1 ll. 7–10, col. 3 ll. 20–47. The knitted textile upper
`may include areas formed from different stitch configura-
`tions with varying textures and may be formed using “flat
`knitting,” where the textile is knit as a sheet or flat piece
`of textile. Id. at col. 3 ll. 25–32, col. 7 ll. 5–8, col. 11
`ll. 19–41. As discussed below, the only remaining claim at
`issue after our decisions in Nike I and II is proposed sub-
`stitute claim 49, which depends from proposed substitute
`claim 47 and recites “a plurality of apertures in the flat knit
`textile element” that are “formed by omitting stitches in
`the flat knit textile element and positioned in the upper for
`receiving laces.” J.A. 19.
`
`II
`The Board’s first final written decision in this inter
`partes review granted a request from Nike to cancel
`claims 1–46 but denied Nike’s request to enter substitute
`claims 47–50, finding those claims unpatentable under 35
`U.S.C. § 103 over the combination of U.S. Patent No.
`5,345,638 (Nishida) and U.S. Patent Nos. 2,178,941 and
`2,150,730 (collectively, Schuessler References). See Adidas
`AG v. Nike, Inc., No. IPR2013-00067, 2014 WL 1713368, at
`*21 (P.T.A.B. Apr. 28, 2014) (Final Written Decision).
`
`

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`Case: 21-1903 Document: 58 Page: 4 Filed: 09/01/2022
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`4
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`NIKE, INC. v. ADIDAS AG
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`Nike appealed, and we found that substantial evidence
`supported the Board’s finding that a skilled artisan would
`have been motivated to combine Nishida with the Schuess-
`ler References with a reasonable expectation of success to
`arrive at the textile upper recited in claims 47–50. See
`Nike I, 812 F.3d at 1335–38. We also affirmed the Board’s
`conclusion that the patent owner bears the burden of prov-
`ing patentability of substitute claims presented in a motion
`to amend. Id. at 1332–34.
`We identified two errors in the Board’s decision, how-
`ever. First, the Board’s analysis of objective indicia of non-
`obviousness failed to examine Nike’s evidence of long-felt
`need. Id. at 1339–40. Second, the Board failed to deter-
`mine if substitute claims 48 and 49, which Nike proposed
`to replace challenged claim 19, were patentably distinct
`from each other. Id. at 1341–42. Relevant to this appeal,
`we remanded for the Board to determine the patentability
`of substitute claim 49, explaining that “Nishida’s specifica-
`tion never specifically discusses the lacing holes of its up-
`per; they are only shown in Figure 3,” and that the Board
`neither “point[ed] to any disclosure in Nishida that ex-
`plains the manner in which” the holes in Figure 3 were cre-
`ated, nor “address[ed] the presence of the holes in either
`claim 49 or Nishida.” Id. at 1344. We noted the Board may
`have “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 per-
`haps would be a basis to conclude that one of skill in the
`art would utilize this technique to create holes for accept-
`ing shoe laces.” Id. at 1344–45 (footnote omitted) (empha-
`sis added). But the Board “did not articulate these
`findings,” and we thus remanded to the Board for further
`proceedings. Id.
`
`

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`Case: 21-1903 Document: 58 Page: 5 Filed: 09/01/2022
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`NIKE, INC. v. ADIDAS AG
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`5
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`III
`After our decision in Nike I, this court issued its en
`banc decision in Aqua Products, overruling Nike I’s holding
`that the patent owner bears the burden of persuasion with
`respect to the patentability of substitute claims. See Aqua
`Prods., 872 F.3d at 1324–25. Both parties submitted briefs
`to the Board addressing the impact of Aqua Products on the
`remand proceedings. Adidas did not attempt to revise its
`invalidity arguments or assert any new prior art references
`to demonstrate the unpatentability of substitute claim 49.
`The Board then issued a second final written decision
`addressing the two errors we identified in Nike I. The
`Board concluded that Adidas proved by a preponderance of
`the evidence that substitute claims 47–50 are unpatenta-
`ble as obvious. Adidas AG v. Nike, Inc., No. IPR2013-
`00067, 2018 WL 4501969, at *13 (P.T.A.B. Sept. 18, 2018)
`(Final Written Decision II). Regarding substitute claim 49,
`the Board found that “Nishida does not disclose apertures
`‘formed by omitting stitches,’ as recited in claim 49.” Id. at
`*7. However, “another prior art document of record in the
`proceeding,” a textbook by David J. Spencer (Spencer),1
`“demonstrates that skipping stitches to form apertures was
`a well-known technique.” Id. at *7–8, *8 n.11. The Board
`concluded that “[b]ecause the omission of stitches was a
`well-known technique in the field of knitting for form-
`ing . . . apertures,” a skilled artisan “would have had rea-
`son to use such a known technique . . . to form the plurality
`of apertures taught by Nishida, as recited by substitute
`claim 49.” Id. at *8 (first citing Spencer 57–58; then citing
`KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007); and
`then citing J.A. 1564 ¶ 107).
`
`
`1 David J. Spencer, Knitting Technology: A Compre-
`hensive Handbook and Practical Guide (3d ed. 2001).
`
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`Case: 21-1903 Document: 58 Page: 6 Filed: 09/01/2022
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`NIKE, INC. v. ADIDAS AG
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`Nike again appealed, arguing that the Board violated
`the APA by failing to give notice that it would rely on Spen-
`cer to support its conclusion that claim 49 is unpatentable
`as obvious. Nike II, 955 F.3d at 51. We agreed, explaining
`that although “the Board may sua sponte identify a patent-
`ability issue for a proposed substitute claim based on the
`prior art of record,” the Board nonetheless “must provide
`notice of the issue and an opportunity for the parties to re-
`spond before issuing a final decision under 35 U.S.C.
`§ 318(a).” Id. at 51–52. Because “Adidas never argued that
`skipping stiches to form apertures was a well-known tech-
`nique, let alone that Spencer taught this claim limita-
`tion”—even though “Spencer was undisputedly part of the
`record”—Nike did not have sufficient notice of or oppor-
`tunity to respond to this issue on which the Board’s patent-
`ability determination rested. Id. at 52–53. As a result, we
`vacated the Board’s decision as to substitute claim 49 and
`remanded for the Board to determine its patentability after
`providing the parties an opportunity to respond. Id. at
`53–54.
`We also addressed Nike’s argument that the Board
`erred in concluding that Nike’s evidence of long-felt need
`was insufficient to find substitute claims 47–50 nonobvi-
`ous. Id. at 54. We reiterated our statement in Nike I that
`skilled artisan would want to minimize waste in knitted
`shoe uppers (as disclosed in Nishida) and that Nishida and
`the Schuessler References relate to efficiently creating
`knitted articles. Id. at 55. We also concluded that substan-
`tial evidence supported the Board’s finding that other
`methods of minimizing waste existed before the date of the
`invention, including Nishida’s use of an inexpensive mate-
`rial for the cutting waste and Schuessler’s disclosure of
`knitting textile elements that do not require cutting. Id.
`We thus affirmed the Board’s finding that Nike failed to
`demonstrate a long-felt need for the features set forth in
`substitute claims 47–50. Id.
`
`

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`Case: 21-1903 Document: 58 Page: 7 Filed: 09/01/2022
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`NIKE, INC. v. ADIDAS AG
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`7
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`IV
`On remand after Nike II, the Board permitted addi-
`tional briefing on three issues: (1) which party bears the
`burden of persuasion for the patentability issue the Board
`had raised sua sponte; (2) whether Spencer teaches or sug-
`gests the disputed limitation of substitute claim 49; and
`(3) whether a skilled artisan would have a reason to com-
`bine the teachings of Nishida, the Schuessler References,
`and Spencer to achieve the article of footwear recited in
`substitute claim 49. Adidas AG v. Nike, Inc., No. IPR2013-
`00067, 2021 WL 793883, at *4 (P.T.A.B. Mar. 1, 2021) (Fi-
`nal Written Decision III).
`On the first question, the Board explained that Nike II
`held that the Board can raise an unpatentability challenge
`for substitute claims sua sponte, but neither Nike II nor
`this court’s other precedents answered the question of
`whether the Board or the petitioner bears the burden of
`persuasion for a Board-raised issue. Id. at *5–6 (citing
`Aqua Prods., 872 F.3d at 1327; then citing Bosch Auto.
`Serv. Sols., LLC v. Matal, 878 F.3d 1027, 1040 (Fed. Cir.
`2017);2 and then citing Nike II, 955 F.3d at 53). The Board
`noted that it generally relies on the incentives created by
`the adversarial system, but the adversarial system may
`
`2 Nike argues that our decision in Bosch held that
`the burden of proving proposed amended claims are un-
`patentable is always on the petitioner. Appellant’s Br. 34,
`38. Bosch, however, involved a petitioner-raised, not a
`Board-raised, unpatentability challenge. There, we faulted
`the Board for impermissibly assigning the burden to the
`patent owner, in violation of our decision in Aqua Products,
`and we noted only that the petitioner bore the burden for
`the challenges it raised. Bosch, 878 F.3d at 1040. Thus,
`Bosch did not address whether the Board or the petitioner
`bears the burden of persuasion for a Board-raised chal-
`lenge to proposed substitute claims.
`
`

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`NIKE, INC. v. ADIDAS AG
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`fail to provide the Board with potential unpatentability ar-
`guments for proposed substitute claims in some cases. Id.
`at *6. This situation might occur, for example, when the
`petitioner ceases to participate in the inter partes review,
`or when the petitioner fails to raise certain evidence of un-
`patentability that is readily identifiable and persuasive
`such that the Board should take it up in the interest of sup-
`porting the integrity of the patent system. Id. (citing Hunt-
`Inc. v. Dynaenergetics Eur. GmbH,
`ing Titan,
`IPR2018-00600, 2020 WL 3669653, at *6 (P.T.A.B. July 6,
`2020)). The Board concluded that the burden of persuasion
`cannot fall on petitioner for a challenge it did not raise, and
`thus “[w]here, as here, the Board raises a patentability
`challenge to a substitute claim sua sponte, the Board itself
`must consider the record in its entirety and justify any
`finding of unpatentability by reference to evidence of rec-
`ord.” Id.
`On the merits, the Board determined that Spencer
`teaches the disputed limitation of substitute claim 49. Id.
`at *8–12. Specifically, the Board agreed with Adidas that
`a skilled artisan “would have understood that the introduc-
`tion of empty needles, as taught in Spencer, causes the
`omission of stitches, and that the creation of apertures in
`this manner was a well-known technique at the time of the
`invention of the ’011 patent.” Id. at *8 (internal quotation
`marks omitted). The Board also found that there was ade-
`quate reason to combine the teachings of Nishida, the
`Schuessler References, and Spencer. Id. at *12–14. Alt-
`hough Nishida does not specify how the apertures in its up-
`per are formed, the Board agreed with Adidas that “there
`are a finite number of predictable solutions for forming
`holes,” and the “omission of stitches was a well-known tech-
`nique in the field of knitting for forming such apertures.”
`Id. at *12–13. Additionally, because a skilled artisan
`would have been motivated to minimize waste and elimi-
`nate cutting, the Board observed that omitting stitches to
`
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`NIKE, INC. v. ADIDAS AG
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`9
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`create an aperture “accomplishes both, particularly as com-
`pared to punching out openings.” Id. at *13–14.
`Accordingly, the Board determined that a preponder-
`ance of the evidence established that substitute claim 49 is
`unpatentable as obvious and denied Nike’s motion to
`amend. Id. at *14. Nike timely appealed. We have juris-
`diction under 28 U.S.C. § 1295(a)(4)(A).
`DISCUSSION
`We review the Board’s legal determinations de novo
`and its factual findings for substantial evidence. Arthrex,
`Inc. v. Smith & Nephew, Inc., 935 F.3d 1319, 1326 (Fed.
`Cir. 2019). “A finding is supported by substantial evidence
`‘if a reasonable mind might accept a particular evidentiary
`record as adequate to support a conclusion.’” Airbus S.A.S.
`v. Firepass Corp., 941 F.3d 1374, 1381 (Fed. Cir. 2019)
`(quoting Dickinson v. Zurko, 527 U.S. 150 (1999)).
`The ultimate determination of obviousness under 35
`U.S.C. § 103 is a question of law based on underlying fac-
`tual 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 of: (1) the “level of ordinary skill in the pertinent
`art,” (2) the “scope and content of the prior art,” (3) the “dif-
`ferences between the prior art and the claims at issue,” and
`(4) “secondary considerations” of nonobviousness such as
`“commercial success, long-felt but unsolved needs, failure
`of others, etc.” KSR, 550 U.S. at 406 (quoting Graham, 383
`U.S. at 17–18). Whether a skilled artisan would have had
`a reason to combine the teachings of prior art references
`also is a question of fact. Pregis Corp. v. Kappos, 700 F.3d
`1348, 1353 (Fed. Cir. 2012) (citations omitted).
`Under the APA, the Board’s actions are not set aside
`unless “arbitrary, capricious, an abuse of discretion, unsup-
`ported by substantial evidence, or otherwise not in accord-
`ance with law.” In re Sullivan, 362 F.3d 1324, 1326 (Fed.
`
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`10
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`NIKE, INC. v. ADIDAS AG
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`Cir. 2004) (citing In re McDaniel, 293 F.3d 1379, 1382 (Fed.
`Cir. 2002)); 5 U.S.C. § 706(2)(A). We review the Board’s
`compliance with notice requirements de novo. In re NuVa-
`sive, Inc., 841 F.3d 966, 970 (Fed. Cir. 2016).
`I. Burden of Persuasion
`Nike argues that the Board incorrectly assigned itself,
`rather than the petitioner, the burden of persuasion for an
`unpatentability challenge to a proposed substitute claim
`that the Board raises sua sponte. Appellant’s Br. 34–55.
`Nike also argues that that Board effectively placed the bur-
`den on Nike to prove that Spencer did not teach the dis-
`puted limitation of substitute claim 49. Appellant’s
`Br. 55–56. Adidas and the United States Patent and
`Trademark Office (as intervenor) disagree, arguing that
`the Board bears the burden on Board-raised patentability
`grounds and that the Board did not shift the burden to
`Nike. Appellee’s Br. 26–37; Intervenor Br. 12–17, 12 n.7.
`Adidas also argues that any error with respect to who bears
`the burden of persuasion is harmless in this case given that
`the Board’s analysis simply tracked the unpatentability
`case Adidas presented in its remand brief. Appellee’s
`Br. 37–40.
`Because we agree with Adidas that the Board and
`Adidas both met the burden of persuasion in this case, we
`need not reach Nike’s argument on whether the Board or
`the petitioner bears the burden on Board-raised patenta-
`bility challenges. We also find that the Board did not place
`the burden on Nike.
`A. Board-Raised Grounds
`The Board found that that Spencer teaches creating ap-
`ertures by omitting stitches and that a skilled artisan
`would have been motivated to combine Spencer with
`Nishida and the Schuessler References. Final Written De-
`cision III, 2021 WL 793883, at *8–14. The Board relied on
`Spencer’s teaching that an “open-work structure has
`
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`NIKE, INC. v. ADIDAS AG
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`11
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`normal securely-intermeshed loops but it contains areas
`where certain adjacent wales are not as directly joined to
`each other by underlaps or sinker loops as they are to the
`wales on their other side,” and that the “unbalanced ten-
`sion causes them to move apart, producing apertures at
`these points.” Id. at *8 (first quoting Spencer 57; and then
`citing Spencer 95); see also Spencer 17 (“A wale is a pre-
`dominantly vertical column of
`intermeshed needle
`loops . . . .”). The Board also noted that Spencer explains
`that, in weft knitting, “open-work structures may be pro-
`duced by the introduction of empty needles.” Final Written
`Decision III, 2021 WL 793883, at *8 (first quoting Spen-
`cer 58; and then citing Spencer 91–92). Thus, a skilled ar-
`tisan “‘would have understood that the introduction of
`empty needles,’ as taught in Spencer, ‘causes the omission
`of stitches, and that the creation of apertures in this man-
`ner was a well-known technique at the time of the inven-
`tion of the ’011 patent.’” Id. (quoting Final Written
`Decision II, 2018 WL 4501969, at *8).
`On remand after our decision in Nike II, Adidas sub-
`mitted briefs arguing that Spencer discloses skipping
`stitches to form apertures, relying on the same disclosures
`identified by the Board in Final Written Decision II. See
`J.A. 2616–17 (citing Spencer 57–58); J.A. 2629 (same). The
`Board juxtaposed its determinations from Final Written
`Decision II with Adidas’s arguments, including Adidas’s
`contention that Spencer “expressly discloses forming aper-
`tures by skipping stitches, e.g., by using ‘empty needles,’”
`and concluded “[w]e agree” with Adidas. Final Written De-
`cision III, 2021 WL 793883, at *9–10. Because the Board
`and Adidas relied on the same disclosures and arguments
`to demonstrate that Spencer taught the disputed limitation
`of substitute claim 49, the outcome below would have been
`the same regardless of whether the Board or Adidas was
`assigned the burden of persuasion.
`The Board and Adidas also relied on the same disclo-
`sures and arguments in finding that a skilled artisan
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`NIKE, INC. v. ADIDAS AG
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`would have been motivated to combine Spencer with
`Nishida and the Schuessler References. Adidas’s briefing
`argued that a skilled artisan would have been motivated to
`combine Spencer with the other references because there
`are a “finite number of predictable solutions for forming
`holes” and the omission of stitches was a well-known tech-
`nique in the field of knitting for forming apertures. J.A.
`2619–20 (citing KSR, 550 U.S. at 421); see also J.A. 2630–
`31. Adidas further argued that there are “additional sug-
`gestions and motivations pointing to omitted stitches,” in-
`cluding minimizing waste, which would have motivated a
`skilled artisan to use the fundamental principle of omitting
`stitches to create an aperture rather than punching out
`openings. J.A. 2620–21. After quoting Adidas’s argu-
`ments, the Board again stated “[w]e agree.” Final Written
`Decision III, 2021 WL 793883, at *12–13 (quoting J.A.
`2619–21). The Board concluded that because (1) “Nishida
`discloses an article of footwear having a plurality of aper-
`tures formed in an indeterminate manner, but for the same
`purpose as that recited in substitute claim 49,” and (2) “the
`omission of stitches was a known technique of forming such
`apertures,” a skilled artisan “would have had reason to use
`a known technique for forming apertures to form the one
`or more apertures taught by substitute claim 49.” Id. at
`*14 (citations omitted).
`The Board and Adidas’s arguments mirror each other,
`and therefore, the outcome below would have been the
`same regardless of whether the burden fell to Adidas or the
`Board. We thus find it unnecessary to determine here
`whether, in an inter partes review, the petitioner or Board
`bears the burden of persuasion for an unpatentability
`ground raised sua sponte by the Board against proposed
`substitute claims.3
`
`
`3 We note, as the Board did, that the Patent Office
`amended 37 C.F.R. § 42.121(d) to allocate the burden of
`
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`B. Burden Shifting
`Nike also argues that the Board effectively placed the
`burden on Nike to prove the patentability of substitute
`claim 49. Appellant’s Br. 55–56. Nike highlights three
`statements in the Board’s decision finding that that Nike’s
`argument is “unpersuasive,” “falls short of adequate con-
`sideration,” and “simply does not explain or articulate ade-
`quately” why forming an aperture via the introduction of
`an empty needle would not have been understood by a
`skilled artisan as a practice of omitting stitches. Id.; see
`also Final Written Decision III, 2021 WL 793883, at
`*10–11. We disagree.
`Nike misreads the Board’s decision. In determining
`that Spencer taught the missing limitation of substitute
`claim 49, the Board explained its reasoning, recited
`Adidas’s arguments, recited Nike’s arguments, and ex-
`plained why it agreed with Adidas and disagreed with
`Nike. Id. at *8–12. The Board did the same with respect
`to motivation to combine. Id. at *12–14. The Board thus
`never placed the burden on Nike.
`Nike’s comparison to our prior decisions in In re Mag-
`num Oil Tools International, Ltd., 829 F.3d 1364 (Fed. Cir.
`2016), and IPR Licensing, Inc. v. ZTE Corp., 685 F. App’x
`933 (Fed. Cir. 2017), is inapt. In Magnum Oil, we found
`the Board erred in shifting the burden to Magnum where
`“it [was] clear that the Board did not require the petitioner
`to support its claim of obviousness by a preponderance of
`the evidence.” 829 F.3d at 1378. In IPR Licensing, we
`found that a statement by the Board that “Patent Owner
`
`
`persuasion in motions to amend filed on or after Janu-
`ary 20, 2021. See Final Written Decision III, 2021 WL
`793883, at *5 n.6. Because Nike’s motion to amend was
`filed before that date, the amended regulation is inapplica-
`ble here. Id.
`
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`NIKE, INC. v. ADIDAS AG
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`has advanced no evidence” regarding motivation to com-
`bine “seem[ed] to shift the burden of proof.” 685 F. App’x
`at 939–40. Unlike Magnum Oil, Adidas supported its claim
`of obviousness by a preponderance of the evidence, and un-
`like IPR Licensing, the Board did not fault Nike for advanc-
`ing no evidence. Instead, the Board disagreed with the
`evidence and argument that Nike advanced. This is not an
`improper burden shift.
`Nike focuses on the words used by the Board, but we
`explained in Magnum Oil that “[i]t is not the language em-
`ployed with which we are concerned, it is the placement of
`the burden of persuasion that matters.” 829 F.3d at 1378.
`Based on our review of the Board’s decision, we find that
`both Adidas and the Board met the burden of persuasion,
`and the Board did not shift the burden to Nike.
`II. Obviousness
`Nike further contests three aspects of the Board’s obvi-
`ousness analysis, arguing that: (1) the Board’s determina-
`tion that Spencer teaches creating apertures by omitting
`stitches is not supported by substantial evidence, Appel-
`lant’s Br. 56–58; (2) the Board’s determination that a
`skilled artisan would be motivated to combine Spencer
`with the other prior art references based on minimizing
`waste is not supported by substantial evidence, Appellant’s
`Br. 65–66; and (3) the Board’s motivation to combine anal-
`ysis violated the APA, Appellant’s Br. 59–65. We disagree
`and address each contention in turn.
`A. Omitting Stitches
`The Board determined that Spencer teaches “apertures
`formed through the omission of stitching material (i.e., un-
`derlaps or sinker loops) between wales of the open work
`structure.” Final Written Decision III, 2021 WL 793883, at
`*11. Nike argues that this finding is not supported by sub-
`stantial evidence because Spencer teaches forming aper-
`tures by joining certain wales with sinker loops or
`
`

`

`Case: 21-1903 Document: 58 Page: 15 Filed: 09/01/2022
`
`NIKE, INC. v. ADIDAS AG
`
`15
`
`underlaps more or less closely, not by the absence of sinker
`loops or underlaps joining wales together. Appellant’s
`Br. 56–58. We disagree.
`Spencer teaches that apertures are formed in knitted
`material when unbalanced tension causes wales that “are
`not as directly joined to each other by underlaps or sinker
`loops as they are to the wales on the other side” to move
`apart, as shown below in Figure 6.12.
`
`Spencer 57–58; see also Spencer 39 (explaining that a
`“sinker loop” is “the piece of yarn that joins one weft knitted
`needle loop to the next”). Spencer also teaches that open-
`work structures in weft knitting “may be produced by the
`introduction of empty needles . . . to produce loop displace-
`ment.” Spencer 58. The Board interpreted these disclo-
`sures to find that Spencer teaches “apertures formed
`through the omission of stitching material (i.e., underlaps
`or sinker loops) between wales of the open work structure.”
`Final Written Decision III, 2021 WL 793883, at *11. In
`other words, wales are joined tightly where sinker loops or
`underlaps are used and are joined less tightly where sinker
`loops or underlaps are omitted, including, for example, by
`
`

`

`Case: 21-1903 Document: 58 Page: 16 Filed: 09/01/2022
`
`16
`
`NIKE, INC. v. ADIDAS AG
`
`knitting with an empty needle. Because a reasonable mind
`might accept the Board’s interpretation of Spencer, the
`Board’s factual determinations are supported by substan-
`tial evidence. Innogenetics, N.V. v. Abbott Lab’ys, 512 F.3d
`1363, 1378 n.6 (Fed. Cir. 2008) (“What a prior art reference
`discloses is, of course, a question of fact.”).
`Nike’s reliance on In re Zurko, 258 F.3d 1379 (Fed. Cir.
`2001), is misplaced. There, we found that the Board’s con-
`clusions relying on “basic knowledge” and “good common
`sense” were “not based on any evidence in the record and,
`therefore, lack[ed] substantial evidence support.” Id. at
`1385. Here, the Board relied on specific disclosures in
`Spencer to determine that Spencer teaches forming aper-
`tures through the omission of stitching material between
`wales, and unlike Zurko, the Board did not rely on basic
`knowledge or common sense to fill in a missing limitation.
`Thus, the Board’s findings are supported by substantial ev-
`idence.
`
`B. Motivation to Combine
`The Board also found that a skilled artisan would have
`been motivated to combine Spencer with Nishida and the
`Schuessler References for two separate reasons: (1) Spen-
`cer teaches a well-known technique for forming apertures
`and (2) forming apertures by omitting stitches is less
`wasteful than punching holes in existing fabric. Final
`Written Decision III, 2021 WL 793883, at *12–14. Nike ar-
`gues that the Board’s theories are not supported by sub-
`stantial evidence. Appellant’s Br. 60, 65–66; Appellant’s
`Reply Br. 15–18. We disagree with Nike.
`After our second remand, Adidas submitted briefs to
`the Board asserting both motivation to combine theories at
`issue here. Adidas first cited KSR’s instruction that
`“[w]hen there is a design need . . . and there are a finite
`number of identified, predictable solutions, a person of or-
`dinary skill has good reason to pursue the known options
`within his or her technical grasp.” J.A. 2619 (quoting KSR,
`
`

`

`Case: 21-1903 Document: 58 Page: 17 Filed: 09/01/2022
`
`NIKE, INC. v. ADIDAS AG
`
`17
`
`550 U.S. at 421). Adidas explained that there are a finite
`number of predictable solutions for forming apertures, in-
`cluding “punching out the openings,” as Nike’s expert sug-
`gested, or omitting stitches, as taught by Spencer.
`J.A. 2619–20 (citing J.A. 1564 (Decl. of Mr. Tonkel on be-
`half of Nike) ¶ 107). Adidas argued that Spencer was well-
`known because it included a copyright date three years be-
`fore the ’011 patent’s earliest priority date, a first publica-
`tion date nearly twenty years earlier, and is a titled a
`“comprehensive handbook and practical guide” that aims
`to “combine in a single volume the fundamental principles
`of weft and warp knitting.” J.A. 2620 (citing Spencer Pref-
`ace); see also J.A. 2630–31. Adidas then explained that
`“[t]here are additional suggestions and motivations point-
`ing to omitted stitches,” including a motivation to minimize
`waste and reduce cutting, which would lead a skilled arti-
`san “to use the ‘fundamental principle’ of omitting stitches
`to create an aperture, which accomplishes both, particu-
`larly as compared to punching out openings.” J.A. 2620–21
`(emphasis added).
`The Board cited these arguments by Adidas in its final
`written decision and stated “[w]e agree.” Final Written De-
`cision III, 2021 WL 793883, at *12–13. The Board ex-
`plained that Nishida and the Schuessler References share
`the same preference for minimizing waste, and Spencer
`teaches omitting stitches to create apertures, “a less waste-
`ful technique for creating such apertures than punching.”
`Id. at *14 (citations omitted). The Board also found that
`Nishida “discloses an article of footwear having a plurality
`of apertures formed in an indeterminate manner,” that
`omitting stitches “was a known technique of forming such
`apertures,” and that a skilled artisan “would have had rea-
`son to use a known technique for forming apertures to form
`the one or more apertures taught by substitute claim 49

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