Nike Loses to Lululemon in CAFC Appeal of PTAB Decision Invalidating Adaptive Watch Patent Claims

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Wednesday issued an opinion authored by Chief District Judge Cathy Bissoon of the U.S. District Court for the Western District of Pennsylvania, sitting by designation, affirming a Patent Trial and Appeal Board (PTAB) decision that Lululemon had shown the challenged claims of Nike, Inc.’s patent to be unpatentable.

Nike’s U.S. Patent No. 8,620,413 is titled “Adaptive Watch.”  Lululemon Athletica Canada, Inc. and Lululemon USA, Inc. (Lululemon) petitioned the PTAB for inter partes review (IPR) of claims 1–5, 7, 9, 12–14, and 17–19. The Board found claims 1, 5, 7, 12 and 17 anticipated by prior art reference U.S. Patent No. 6,241,684 B1 (Amano); claims 2, 3, 4, 13 and 18 rendered obvious by Amano in combination with U.S. Patent No. 5,400,794 (Gorman); and claims 9, 14 and 19 rendered obvious by Amano combined with U.S. Patent Application Publication No. 2001/0023315 (Flach).

Nike appealed, and the CAFC determined that none of Nike’s arguments warranted reversal.

Nike first argued that the Board erroneously implicitly construed a limitation requiring the watch to “prompt [the] user to exercise at a plurality of successive exertion levels, wherein . . . exertion level is based on a level of physical fitness of a user” by removing the word “level” and construing the claim to mean a user’s “‘physical characteristics or attributes’ may be used in ‘assessing or understanding a level of a user’s physical fitness.’” But the CAFC called Nike’s argument here “linguistic gymnastics.”

The CAFC agreed with the Board that “Nike’s construction ‘takes into account an individual user’s particular physical fitness condition’ injected more ambiguity than clarity.” The court further found no fault in the Board’s reasoning regarding Amano’s anticipation of limitations 1[C] and 1[D] and that substantial evidence also supported the findings regarding the motivation to combine Amano with Gorman and Flach, citing the Board’s reliance on Lululemon’s expert testimony.

“The Board provided reasons for rejecting each of Nike’s positions, and they will not improve with repetition here,” wrote the CAFC.