Utility Patents and the Sneaker Wars: Nike Alleges Infringement of Multi-Billion Dollar Technologies
On May 3, 2018, Nike sued Puma alleging infringement of seven utility patents related to its Flyknit, Air, and cleat assembly technologies1. In its complaint, Nike asserts that it has been “investing heavily in research, design and development” and that Puma has “forgone innovation and is instead using Nike’s technologies without permission.” While Nike has not shied away from asserting its patents against competitor products, this case is unusual in that Nike has asserted utility, not design patents. This is the first time Nike has asserted these utility patents, despite having been engaged in prior litigation regarding its Flyknit technology.
Utility patents are issued to cover a new and useful process, machine, manufacture or composition of matter. A utility patent protects the functional aspects of a useful invention and gives the patent holder 20 years of exclusivity. Utility patents are common in textile technology, covering inventions such as weaving techniques and fabric treatments (flame, water or wrinkle resistance), but are rarer in downstream fashion goods, whose ornamental designs are not eligible for utility patents. Instead, fashion goods, such as shoes, bags or other articles of clothing may be covered by a design patent. A design patent protects the aesthetic features of a product and provide only 15 years of exclusivity. Design patents protect only the ornamental design (the way a product looks), and are prohibited from protecting any functionality (how the product works). In order to qualify for design patent protection, the design must be new and not obvious in view of prior designs. Well-known fashion designs, like the Crocs classic clog and the Birkenstock sandal are covered by design patents in an effort to stop copycats.
Nike introduced its Flyknit technology in 2012, which was regarded as a “quantum leap” in the industry, using yarn and fabric variations to engineer a “featherweight, formfitting and virtually seamless upper.” Nike has grossed over $1 billion on the Flyknit technology. Nike’s Air technology has also been a staple and a very lucrative product. Despite having introduced Air in 1987, Nike states that it has “continued to innovate over the following three decades,” and that Air is “an important component of its strategy and it is integral to Nike’s success.” Finally, its cleat technology has been a stalwart for over 50 years.
Nike asserts that it owns more than 300 utility patents for its Flyknit technology, and over 800 utility patents for its Air technology. Nike has quite an arsenal, should it chose to deploy its utility patents.
While Nike makes much in its complaint of the fact that industry commentators have pointed out the similarities between Nike’s Flyknit and Puma’s IGNITE Proknit, because Nike has asserted its utility patents, the appearances do not matter. What matters is whether Puma uses Nike’s patented process to create the knitted upper on Puma’s IGNITE Proknit. Observers should keep in mind that for utility patents, infringement occurs when the accused product has all the elements of a claim of an asserted patent. Therefore, the court will not consider whether the accused Puma products look like the claimed Nike products, as they would in a design patent case. Nike has asked for a permanent injunction to stop Puma from infringing its patents, monetary damages, and enhanced damages due to Puma’s willful infringement. Time will tell whether utility patents are the next front for Nike in its quest to protect its multi-billion dollar Flyknit, Air and cleat technologies.
1 The case is Nike, Inc. v. Puma North America, Inc., 1:18-cf-10876 pending before Judge Leo T. Sorokin in the United States District Court for the District of Massachusetts.