In an opinion concerning the notice provisions of the Administrative Procedure Act (APA), the US Court of Appeals for the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) may identify a new patentability issue regarding proposed substitute claims based on prior art of record—but must first notify the parties and provide an opportunity to respond. Nike, Inc. v. Adidas AG, Case No. 20-1262 (Fed. Cir. Apr. 9, 2020) (Stoll, J.).

The decision is part of a long-running battle between Nike and Adidas that began in 2012, when Adidas filed a petition for inter partes review (IPR) of a patent owned by Nike. Nike subsequently filed a motion to cancel the existing claims and substitute new claims. Particularly relevant is a new claim that recites a knit textile upper element of a shoe containing “apertures” that can be used to receive laces and that are “formed by omitting stitches” in the knit textile.