Adidas Ag v. Nike, Inc.

United States Court of Appeals
for the Federal Circuit
______________________

ADIDAS AG,
Appellant

v.

NIKE, INC.,
Appellee
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2018-1180, 2018-1181
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Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2016-00921, IPR2016-00922.
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MITCHELL G. STOCKWELL, Kilpatrick Townsend &
Stockton LLP, Atlanta, GA, for appellant. Also repre-
sented by VAIBHAV P. KADABA, MICHAEL T. MORLOCK,
TIFFANY L. WILLIAMS.

CHRISTOPHER J. RENK, Banner & Witcoff, Ltd., Chica-
go, IL, for appellee. Also represented by AARON PATRICK
BOWLING, MICHAEL JOSEPH HARRIS.
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ON MOTION
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Before MOORE, WALLACH, and TARANTO, Circuit Judges.
2 ADIDAS AG v. NIKE, INC.

MOORE, Circuit Judge.

ORDER
In light of the Supreme Court’s recent decision in SAS
Institute Inc. v. Iancu, 138 S. Ct. 1348 (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 peti-
tioned 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
ADIDAS AG v. NIKE, INC. 3

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 insti-
tute 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 Direc-
tor’s discretion, is supposed to guide the life of the litiga-
tion,” id., and “that the petitioner’s contentions, not the
Director’s discretion, define the scope of the litigation all
the way from institution through to conclusion,” id. at
1357.
In several cases since SAS, we have found it appro-
priate to remand to the Board to consider arguments
addressed to non-instituted claims and found waiver
inapplicable to a prompt remand request due to the
4 ADIDAS AG v. NIKE, INC.

significant change in the law. See, e.g., Baker Hughes
Oilfield v. Smith Int’l, Inc., Nos. 2018-1754, -1755, slip op.
at 4–5 (Fed. Cir. May 30, 2018); Polaris Indus. Inc. v.
Arctic Cat, Inc., Nos. 2017-1870, 2017-1871, slip op. at 3–4
(Fed. Cir. May 30, 2018); Ulthera, Inc. v. DermaFocus
LLC, No. 2018-1542, slip op. at 3 (Fed. Cir. May 25, 2018).
We see no reason to treat this case differently. As we
recently explained in PGS Geophysical AS v. Iancu, __
F.3d __, slip op. at 7 (Fed. Cir. June 7, 2018), “[e]qual
treatment of claims and grounds for institution purposes
has pervasive support in SAS.” Adidas promptly request-
ed a remand for consideration of the non-instituted
grounds. In this case, we think it appropriate to grant
that request, as in the above-cited cases, without first
deciding the appeal of the claims and grounds already
before us.
Accordingly,
IT IS ORDERED THAT:
(1) The motion to remand is granted. The Board is
directed to promptly issue a final written decision as to all
grounds raised in Adidas’s petitions.
(2) Each side shall bear its own costs.

FOR THE COURT

July 2, 2018 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court

ISSUED AS MANDATE: July 2, 2018