Fashion is a mainstay of the intellectual property world, where prominent trade marks and designs seem to often come into conflict with alleged infringers, be it deliberate copycats or convergent design. Indeed, the concept of registered designs stems from the textiles industry, and being concerned with the way something looks is particularly suited to the fashion industry. It is less often that a patent conflict appears in this field, but that is just what has happened recently in New York.
A US jury found this year that ‘athleisure’ brand Lululemon infringed a patent held by sportswear juggernaut Nike. There are a few curiosities when it comes to this case – the remarkably small settlement, patent trial by jury (unheard of in Australia), and the fact that the patent in question has now expired.
The Case
Nike filed what would become patent US8266749 B1 ‘Articles of footwear having a textile upper’(the 749 patent) in 2011, and US9375046B2 ‘Articles of footwear incorporating a knitted component with inlaid tensile elements and method of assembly’ (the 046 patent) in 2014. In 2023, Nike began proceedings to sue Lululemon on the basis that the Lululemon products Chargefeel, Strongfeel and Blissfeel infringed these patents (and one other, US9730484B2 ‘Articles of footwear having a flat knit upper construction or other upper construction’ – the 848 patent).
In response, Lululemon filed to have the validity of each of these patents reviewed. This is a fairly standard strategy in infringement cases because it can delay the infringement proceedings and, if the patents in question can be found to be invalid, they cannot be infringed. Lululemon was partially successful – the 484 patent was found to indeed be invalid and was withdrawn from the suit. Nike’s case was allowed to continue in respect for the remaining two patents.
The jury found that Lululemon had infringed Nike’s 749 patent but had not infringed the 046 patent. Nike sought 5% of Lululemon’s derived revenue from the sale of the infringing products, but the Court awarded Nike just $355,450 ($1.20 per unit sold) – a relatively tiny sum, far less than the 5% sought.
Lululemon has announced that they are relatively satisfied with the outcome, given the small amount of money. They will nonetheless appeal and will not stop selling any products. This latter point may be independent of the decision because the infringed 749 patent expired in March 2024 so any sales since then are irrelevant to considerations of that patent.
Comparison to Australian Procedure
Unusually from an international point of view, the USA has a system whereby any party in a patent trial (and many other forms of common law trial) can demand a trial by jury. In federal cases at least, the jury’s role is limited to resolving questions of fact, although the difference between ‘fact’ and ‘law’ is blurry to say the least. In patent trials, it is up to the court to construct (that is, interpret) the claims. Once this is done the matters of fact that involve the jury are quite well constrained, and include matters of infringement. The jury also decides on the awarding of damages, though the Judge decides the way that this value should be calculated. It is difficult to say whether a Judge or panel of Judges would have arrived at the same low amount of awarded damages.
Nike vs Lululemon: Impacts on the Future?
Nike continues to defend its IP stridently and though successful here, the consequences are minor for Lululemon. Notably, Nike is also enforcing the same patents against at least New Balance and Sketchers, two other major players in the sportswear space.
As something of an up-and-comer, Lululemon is pushing boundaries with respect to IP. With an appeal pending and similar cases ongoing, this will be an interesting space to watch.
MBIP have previously written about fashion here and here. If you think your fashion IP has been infringed don’t hesitate to get in touch with one of MBIP’s experienced Attorneys.
