Adidas vs Nike: Technology IPR Case Study

Nike first sued Adidas in East Texas in 2005, alleging several Adidas shoes violated two patents related to
shoe design. The companies agreed to drop that case in 2007. Adidas claimed that Nike infringed on the
2005 released Adidas_1, which Adidas says is the first shoe to ever sense and adjust “the comfort of the shoe
while the shoe is worn” — with Nike’s Adapt technology.

The Olympic Dispute

Nike launched its Flyknit shoes in February 2012 and Adidas introduced the Primeknit shoe model in July
2012. Both the brands brought their knitted running shoes to market in the run-up to the Olympic Games in
London. Flyknit is a very high-tech knitted material that involves placing stronger fibers in specific areas for
more support. Primeknit, on the other hand, involves knitting a one-piece upper made of the same material
throughout the shoe. Support is gained by applying heat to specific areas.

PTAB Hearing

Initial Hearings: In 2012, Nike filed a lawsuit in German courts against Adidas, arguing that Adidas’
Primeknit shoes were an infringement of Nike’s Flyknit patent. Nike accused Adidas of making
unauthorized use of its patent-protected Flyknit technology. As a result on 28th August, the German court
stopped any type of transactions of (buying/ selling) of Adidas Primeknit in Germany. German courts
imposed temporary injunctions on allegedly infringing products when a suit is filed but can lift the
injunction after hearing from the defendant. Adidas initially only offered its Primeknit models for sale in
Germany. Therefore, Nike sued for patent infringement before the Nuremberg court.

Later Hearings: However as the case progressed, The Patent Trial and Appeal Board agreed with
Adidas. The PTAB decided that Nike had not been able to prove the patentability of the amended claims
against the known prior art. On 7th November Federal Patent Court of Germany set aside an injunction that
barred Adidas from selling its Primeknit running shoe in Germany. In October, the German court said it
would likely nix the injunction, which forbade Adidas from manufacturing and marketing the lightweight
running shoe. The court said - "The injunction could not be sustained after hearing Adidas' argument,
according to Adidas, which said that the technology covered by the patent has been known since the
1940s." On the 17th of November, Nike was asked to take back the infringement from the court and the case
was dismissed As a result, Nike’s design failed to meet the novelty element required for patentability, and
Nike’s patent was deemed invalid in Germany. This decision led to an ongoing legal battle over knitted
footwear technology in US courts.

Ping-pong mode between PTAB and Federal Court of Appeals

However, Nike appealed against this decision to the Federal Court of Appeals and was successful in 2014.
The court stated - "Nike had invented a novel knitting technology and that the knitted fabric was
recognized as a quantum leap in the field." The Federal Court of Appeals confirmed Nike’s patent and
referred back that case to PTAB.

In April 2016, Adidas, therefore, filed three further applications in connection with three other Nike utility
models. However, in October 2017 the PTAB upheld Nike’s Flyknit patent.
The Outcome

The continued rivalry between Nike and Adidas came to an end in August 2022, when both brands settled a
series of dueling US patent lawsuits. Declaring that they have reached a private settlement, the two parties
submitted documents to the federal courts. On August 16, they jointly asked the Oregon court to dismiss
Nike's lawsuit whereas they asked the Texas court and U.S. International Trade Commission "ITC" to drop
their cases on August 18.

Both parties asked the case be dismissed without prejudice and agreed to bear their fees and costs.

All of the filings said the dispute had been settled, without disclosing any further details on the terms of the
settlement.Upon the request for further comments, Nike failed to respond whereas Adidas said, “The parties
resolved the disputes.”

Case Insight

Fashion brands are known to file lawsuits against each other over design patents - which protect the way a
product looks. For instance, Adidas has a streak of lawsuits against brands using its three-stripes trademark.

However, Adidas’ action against Nike focused on the patented technology, something that covers how the
products work.

As fashion migrates toward the world of technology, companies are integrating technology like sensors into
accessories to measure health or activity or using new methods to add benefits to clothing like sun
protection.

Technology is becoming a competitive advantage among brands and thus companies are more likely to
patent more new technologies that better online experiences like virtually trying on clothes etc. rather than
only protecting their designs.