By: Genevieve Sloan

On March 10, 2025, a federal jury returned a verdict in favor of Nike in a patent lawsuit against one of its largest sports apparel competitors, Lululemon.[1]  The jury found that Lululemon’s products infringed on one of Nike’s patents and that Lululemon failed to prove by clear and convincing evidence the invalidity of the patent.[2]  The lawsuit commenced when Nike filed a Complaint against Lululemon on January 30, 2023, alleging that four of Lululemon’s footwear products infringed on several of its presumably valid patents under 35 U.S.C. § 271.[3]   In October 2024, the court denied Lululemon’s motion to stay the case based on the Patent Trial and Appeal Board’s (“PTAB”) ongoing review of the patents at issue.[4]

The patents in question, U.S. Patent Nos. 8,266,749 (“patent ’749”), 9,375,046 (“patent ’046”), and 9,730,484 (“patent ’484”), issued in 2012, 2016, and 2017, respectively, concern Nike’s innovative Flyknit technology.[5]  Nike’s Flyknit technology, used in its footwear products, strategically weaves textiles to create optimal support and flexibility to ensure that each shoe “fits like a sock.”[6]  At trial, Nike contended that Lululemon used the patented technology as its only means of entering the running shoe market.[7]  As an athleisure apparel company, the products at issue marked Lululemon’s first attempt at entering the running shoe space.[8]  Lululemon contrarily argued that the products at issue displayed its innovation in the women’s athletic footwear space as the first shoe developed specifically for women.[9]

Although Nike sought $2.8 million in damages, amounting to 5% of Lululemon’s sales from the products at issue, the jury found that $355,450 constituted a reasonable award.[10]  Lululemon expresses its delight with the outcome and remains hopeful that the outcome of the PTAB’s ongoing review of patent ’749 will invalidate the patent and the verdict.[11]

In its denial of Lululemon’s motion to stay the case based on the PTAB’s review of the patents, the court acknowledged that the PTAB’s finding of invalidity would render the case moot.[12]  Nevertheless, it found that the benefits of staying the case did not outweigh the costs of halting almost two years of litigation.[13]

Under § 271(a), an entity infringes a patent when it lacks authority but nevertheless sells or imports the patented invention in the United States when the product is patented.[14]  To receive patent protection, an invention must satisfy the requisite statutory elements of patentability, including novelty, non-obviousness, and specificity.[15]  Lululemon challenges the non-obviousness of patent ’749, alleging analogous prior art exists.[16]  The affirmative defense of invalidity allows an accused infringer to avoid liability.[17]  Therefore, if the PTAB finds the patent obvious and, thus, invalid, Lululemon could win against Nike in the current matter on appeal.[18]

Regardless of whether the PTAB finds patent ’749 valid, this decision will impact the business law community by inspiring sports apparel companies to seek patent protection for their inventions.  If the federal jury verdict leads to Nike’s requested injunction, Lululemon will likely have to change its footwear designs.[19]  Because this case awards Nike for its innovation, it aligns with our Constitution’s Intellectual Property Clause, which aims to promote innovation by granting inventors “the exclusive Right to their . . . [d]iscoveries.”[20]  Sports apparel companies will need to pay more attention not only to Nike’s patent protection but also to the patent protections of other competitor companies as they continue to create innovative products.  Business lawyers must advise their clients on how to avoid infringing on patented products and protect their innovative products.[21]

 

[1] Verdict Form at 2–3, Nike, Inc. v. Lululemon USA Inc., No. 1:23-cv-00771-AS (S.D.N.Y Mar. 10, 2025), https://www.bloomberglaw.com/product/blaw/document/X5NK98UE5R49JR9AT4RRRJSSJFU/download.

[2] Id.

[3] Complaint at 2–3, Nike, Inc. v. Lululemon USA Inc., No. 1:23-cv-00771-AS (S.D.N.Y filed Jan. 30, 2023). See 35 U.S.C. § 271.

[4] Nike, Inc. v. Lululemon USA Inc., No. 23-cv-771, slip op. 2024 WL 4381070, at *1 (S.D.N.Y. Oct. 3, 2024); Petition for Inter Partes Review, Lululemon USA Inc. v. Nike, Inc., No. IPR2024-00460 (P.T.A.B. Jan. 12, 2024) (challenging the patent’s validity based on obviousness).

[5] Complaint, supra note 3, at 3.

[6] See Michael J. Kasdan, Turbulent Times: Nike v Lululemon over FlyKnit Patent Portfolio, The Patent Law., https://patentlawyermagazine.com/turbulent-times-nike-v-lululemon-over-flyknit-patent-portfolio/ (last visited Mar. 20, 2025); see also Brett Trout, Nike vs. Lululemon: The Battle Over Flyknit Technology, BlawgIT (Mar. 11, 2025), https://blawgit.com/2025/03/11/nike-vs-lululemon-the-battle-over-flyknit-technology/ (adding that Flyknit “reduces waste by up to 60%”).

[7] See Ryan Davis, Nike Receives $355K from Lululemon in Shoe Patent Trial, Law360 (Mar. 10, 2025, 10:46 PM), https://www-law360-com.us1.proxy.openathens.net/articles/2307154/nike-receives-355k-from-lululemon-in-shoe-patent-trial.

[8] Kasdan, supra note 6.

[9] Davis, supra note 7 (adding that one of Lululemon’s attorneys argued that “Lululemon took a long cut” rather than the shortcut Nike accused it of taking).

[10] See Verdict Form, supra note 1, at 5 (expressing the percentage owed as $1.20/unit); Ryan Davis, Nike Says Lululemon Owes $2.8M As Shoe Patent Trial Begins, Law360 (Mar. 3, 2025, 9:46 PM), https://www-law360-com.us1.proxy.openathens.net/articles/2299464?scroll=1&related=; Kyle Jahner, Lululemon Owes Nike $355,000 over Flyknit Patents, Jury Says (1), Bloomberg L. (Mar. 11, 2025, 2:57 PM), https://www.bloomberglaw.com/product/blaw/bloomberglawnews/bloomberg-law-news/.

[11] See Jahner, supra note 8; see also Nike, Inc. v. Lululemon USA Inc., No. 23-cv-771, slip op. 2024 WL 4381070, at *1 (S.D.N.Y. Oct. 3, 2024) (denying Lululemon’s motion to stay the case based on PTAB’s review of the patents at issue).

[12] Nike, slip op. at *2.

[13] See id. at *4.

[14] 35 U.S.C. § 271(a).

[15] See Bilski v. Kappos, 561 U.S. 593, 602 (2010).

[16] See Petition for Inter Partes Review, Lululemon USA Inc. v. Nike, Inc., No. IPR2024-00460 (P.T.A.B. Jan. 12, 2024); see also Dani Kass, Lululemon Gets PTAB To Review Nike Flyknit Patent, Law360 (Aug. 12, 2024, 8:30 PM), https://www-law360-com.us1.proxy.openathens.net/articles/1868885?scroll=1&related= (noting that Lululemon raised grounds for anticipation and obviousness).

[17] Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 644 (2015).

[18] See id. (“To say that an invalid patent cannot be infringed . . . is . . . a simple truth, both as a matter of logic and semantics.”); see also Lululemon USA Inc. v. Nike, Inc., No. IPR2023-01460 (P.T.A.B. Mar. 21, 2025) (declaring patent ’484 unpatentable).

[19] See Trout, supra note 6.

[20] U.S. Const. art. I, § 8, cl. 8.

[21] See Trout, supra note 6 (emphasizing the importance of “generating a comprehensive intellectual property portfolio” in the current competitive space).