Opposition Brief — adidas AG, Petitioner v. Nike, Inc.

No. 20-728

IN THE

Supreme Court of the United States

————

ADIDAS AG,

Petitioner,

v.

NIKE, INC.,

Respondent.

————

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

————

BRIEF IN OPPOSITION

————

CHRISTOPHER J. RENK

MICHAEL HARRIS

ARNOLD & PORTER

70 West Madison Street,

Suite 4200

Chicago, IL 60602-4321

(312) 583-2300

chris.renk@

arnoldporter.com

michael.harris@

arnoldporter.com

AARON G. FOUNTAIN

Counsel of Record

DLA PIPER LLP (US)

401 Congress Ave.,

Suite 2500

Austin, TX 78701

(512) 457-7000

aaron.fountain@

us.dlapiper.com

STANLEY J. PANIKOWSKI

DLA PIPER LLP (US)

401 B Street, Suite 1700

San Diego, CA 92101-4297

(619) 699-2643

stanley.panikowski@

us.dlapiper.com

Counsel for Respondent

December 28, 2020

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002

RULE 29.6 DISCLOSURE STATEMENT

Respondent NIKE, Inc. has no parent or publicly

held company owning 10% or more of its stock.

(i)

TABLE OF CONTENTS

Page

RULE 29.6 DISCLOSURE STATEMENT .........

i

TABLE OF AUTHORITIES ................................

iv

INTRODUCTION ................................................

1

REASONS WHY THE PETITION SHOULD

BE DENIED .....................................................

1

A.

adidas Forfeited Any Appointments

Clause Challenge ......................................

1

adidas’s Status as the IPR Petitioner Is

an Additional and Independent Ground

for Denying Review ...................................

10

CONCLUSION ....................................................

12

B.

(iii)

iv

TABLE OF AUTHORITIES

CASES

Page(s)

Arthrex, Inc. v. Smith & Nephew, Inc.,

941 F.3d 1320 (Fed. Cir. 2019),

cert. granted Oct. 13, 2020 ......................passim

Bedgear, LLC v. Fredman Bros.

Furniture Co.,

779 F. App’x 748 (Fed. Cir. 2019),

reh’g granted and judgment vacated,

803 F. App’x 407 (Fed. Cir. 2020) .............

5

Ciena Corp. v. Oyster Optics, LLC,

958 F.3d 1157 (Fed. Cir. 2020) .................

10

Curtis Publishing Co. v. Butts,

388 U.S. 130 (1967) ...................................

8

Customedia Techs., LLC v. Dish Network

Corp., et al.,

No. 20-135, cert. denied Oct. 13, 2020 .....

7, 8

Essity Hygiene & Health AB, et al. v.

Cascades Canada ULC, et al.,

No. 20-131, cert. denied Oct. 13, 2020 .....

7, 8

Freytag v. Commissioner,

501 U.S. 868 (1991) ................................... 4, 8, 9

IYM Technologies LLC v. RPX Corp. and

Advanced Micro Devices, Inc.,

No. 20-424, cert. denied Nov. 16, 2020 ....

7

Lucia v. SEC,

138 S. Ct. 2044 (June 21, 2018)................ 4, 5, 6

New York Times Co. v. Sullivan,

376 U. S. 254 (1964) ..................................

8

v

TABLE OF AUTHORITIES—Continued

Page(s)

PHH Corp. v. Consumer Financial

Protection Bureau,

839 F.3d 1 (D.C. Cir. 2016), rev’d en

banc, 881 F.3d 75 (D.C. Cir. 2018) ...........

10

Sanofi-Aventis Deutschland GMBH v.

Mylan Pharmaceuticals Inc.,

No. 19-1451, cert. denied Oct. 5, 2020 .....

6, 7

SAS Institute Inc. v. Iancu,

138 S. Ct. 1348 (2018) ...............................

2

Stern v. Marshall,

564 U.S. 462 (2011) ................................... 3, 11

United States v. Olano,

507 U.S. 725 (1993) ...................................

1, 3

Yakus v. United States,

321 U.S. 414 (1944) ................................... 1-2, 3

CONSTITUTION

U.S. Const. art. II, § 2, cl. 2 .........................passim

RULES

Fed. R. App. P. 28(j) .....................................

7

Fed. R. App. P. 44 .........................................

3, 9

INTRODUCTION

adidas’s petition for certiorari should be denied

because it forfeited any Appointments Clause

challenge at every stage of the proceedings below.

This Court already has denied multiple cert petitions

presenting less extreme forfeitures of the Arthrex

issue. Here, the forfeiture is even more thorough than

it was in those cases. Despite being the petitioner in

the inter partes review (IPR) proceedings and the

appellant in two Federal Circuit appeals, adidas never

breathed a word of an Appointments Clause challenge

until its cert petition to this Court. adidas cannot

belatedly piggy-back on Arthrex simply because

certiorari has been granted in that case.

Though it had every opportunity to raise an

Appointments Clause challenge, adidas decided to

take its chances at the Federal Circuit solely on the

merits. adidas lost that gamble. It is far too late to

choose a different strategy now. It does not matter

how Arthrex turns out: adidas already has forfeited

any opportunity for relief. It is not even necessary to

hold the petition until a decision in Arthrex. The

petition for certiorari should be denied.

REASONS WHY THE

PETITION SHOULD BE DENIED

A. adidas Forfeited Any Appointments Clause

Challenge

“‘No procedural principle is more familiar to this

Court than that a constitutional right,’ or a right of

any other sort, ‘may be forfeited in criminal as well as

civil cases by the failure to make timely assertion of

the right before a tribunal having jurisdiction to

determine it.’” United States v. Olano, 507 U.S. 725,

731 (1993) (quoting Yakus v. United States, 321 U.S.

2

414, 444 (1944)). This principle requires the denial

of adidas’s petition regardless of Arthrex’s outcome.

adidas forfeited any Appointments Clause challenge

at every conceivable stage of the proceedings below.

Recognizing its predicament, adidas conveniently

omits from its petition many important details of the

timeline of proceedings. This timeline underscores the

completeness of adidas’s forfeiture of any Appointments Clause challenge:



October 19, 2017 – Patent Trial and

Appeal Board (PTAB) issues final written

decisions in the IPRs that adidas filed in

2016



November 13, 2017 – adidas files first

appeal



February 26, 2018 – adidas files opening

brief in first appeal



May 1, 2018 – adidas files reply brief in

first appeal



May 24, 2018 – adidas files motion to

remand first appeal to PTAB based on this

Court’s decision in SAS Institute Inc. v.

Iancu, 138 S. Ct. 1348 (2018)



July 2, 2018 – Federal Circuit grants

adidas’s motion and remands to PTAB

At no point in these proceedings did adidas make an

Appointments Clause challenge in either the PTAB or

the Federal Circuit. The same is true of the postremand proceedings:



February 19, 2019 – PTAB issues postremand final written decisions in IPRs



April 19, 2019 – adidas files second appeal



3

August 30, 2019 – adidas files opening

brief in second appeal



October 31, 2019 – Federal Circuit decides

Arthrex



December 23, 2019 – adidas files reply

brief in second appeal (no mention of

Arthrex or Appointments Clause)



May 15, 2020 – adidas files notice of

supplemental authority in second appeal

(no mention of Arthrex or Appointments

Clause)



June 25, 2020 – Federal Circuit issues

judgment and opinion in second appeal



July 27, 2020 – Time to file rehearing

petition expires (no rehearing petition is

filed)

adidas made no mention of Arthrex or the Appointments Clause at all, before either the PTAB or the

Federal Circuit, at any stage of these proceedings. Nor

did adidas ever file the required notice under Federal

Rule of Appellate Procedure 44 indicating that it

planned to challenge the constitutionality of a federal

statute on appeal. Whether by design, neglect, or

some combination of the two, adidas’s utter failure to

make any Appointments Clause challenge was an

outright forfeiture of the issue on which it now seeks

this Court’s review. See Olano, 507 U.S. at 731;

Yakus, 321 U.S. at 444; see also Stern v. Marshall, 564

U.S. 462, 482 (2011) (“If Pierce believed that the

Bankruptcy Court lacked the authority to decide his

claim for defamation, then he should have said so—

and said so promptly.”). This forfeiture is fatal to

adidas’s cert petition. No “hold” for Arthrex is needed.

4

adidas’s failure to raise the Appointments Clause

issue at the Federal Circuit in its second appeal is

especially glaring. By the time adidas filed its opening

brief in the second appeal, this Court’s decision in

Lucia v. SEC, 138 S. Ct. 2044 (June 21, 2018), was

more than a year old. In Lucia, this Court held that

administrative law judges (ALJs) of the Securities and

Exchange Commission qualify as inferior “Officers of

the United States” under the Appointments Clause

and hence must be appointed by the President or a

delegated Officer of the United States. Id. at 2053-55.

Lucia itself relied on a long line of this Court’s

Appointment Clause precedents, especially Freytag v.

Commissioner, 501 U.S. 868 (1991).

Starting even before Lucia, IPR litigants had been

challenging the constitutional validity of the appointments of the PTAB’s ALJs under the Appointments

Clause. E.g., Coalition for Affordable Drugs VIII, LLC

v. The Trustees of the Univ. of Penn., IPR2015-01836,

IPR2015-01835; Mylan Pharms. Inc. v. Yeda Res. &

Dev. Co. Ltd., PGR2016-00010; Hulu, LLC v. Sound View

Innovations, LLC, IPR2018-00017, IPR2018-00366;

St. Jude Med., LLC v. Snyders Heart Valve, LLC,

IPR2018-00105, IPR2018-00106, IPR2018-00107,

IPR2018-00109; ZTE (USA) Inc. v. Fundamental

Innovation Sys. Int’l LLC, IPR2018-00425; Investors

Exchange LLC v. NASDAQ, Inc., CBM2018-00041,

CBM2018-00042; Unified Patents Inc. v. Bradium Techs.

LLC, IPR2018-00952; Apple, Inc. v. Uniloc Luxembourg,

S.A., IPR2018-00424, IPR2018-00282; Intel Corp. v.

VLSI Tech. LLC, IPR2018-01105, IPR2018-01035,

IPR2018-01144, IPR2018-01033, IPR2018-01040,

IPR2018-01312, IPR2018-01107; Samsung Elecs. Am.,

Inc. v. Uniloc Luxembourg, S.A., IPR2018-01653;

Quest USA Corp. v. PopSockets LLC, IPR2018-00497,

IPR2018-01294; General Elec. Co. v. Vestas Wind Sys.

5

A/S, IPR2018-00928, IPR2018-00895, IPR201800896; Unified Patents, Inc. v. Uniloc 2017 LLC,

IPR2019-00453; Starbucks Corp. et al. v. Fall Line

Patents, LLC, IPR2019-00610; Unified Patents Inc. v.

MOAEC Techs., LLC, IPR2018-01758; Flywheel

Sports, Inc. v. Peloton Interactive, Inc., IPR201900564, IPR2019-00295, IPR2019-00294. These challenges extended at least as far back as 2016—the same

year adidas filed the IPR petitions at issue here.

The Appointments Clause challenges to the PTAB’s

ALJs accelerated after Lucia, and many reached the

Federal Circuit. For example, the appellant in Polaris

Innovations Ltd. v. Kingston Technology Co. (whose

cert petition remains pending) raised the Appointments Clause challenge in the PTAB before Lucia, and

again in its opening Federal Circuit appeal brief less

than three weeks after Lucia: “The cancellation of

Polaris’s claims violated the Appointments Clause . . .

as a final agency decision requiring the Board to act as

‘principal Officers’ without having been appointed by

the President and confirmed by the Senate.” Opening

Brief of Appellant at 1-2 (Dkt. 22), No. 2018-1768

(Fed. Cir. July 10, 2018); id. at 52-60. Arthrex itself

raised the issue in its opening appeal brief in the

Federal Circuit in October 2018. Opening Brief of

Appellant at 2, 5-6, 31, 59-66 (Dkt. 18), No. 2018-2140

(Fed. Cir. Oct. 19, 2018). Other appellants raised the

issue in their Federal Circuit opening appeal briefs as

well. E.g., Bedgear, LLC v. Fredman Bros. Furniture

Co., 779 F. App’x 748 (Fed. Cir. 2019), reh’g granted

and judgment vacated, 803 F. App’x 407 (Fed. Cir.

2020); Opening Brief of Appellant at 63-64 (Dkt. 18),

No. 2018-2170 (Fed. Cir. Nov. 13, 2018); see also

General Order in Cases Remanded Under Arthrex,

Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir.

2019), Patent Trial and Appeal Board (May 1, 2020)

6

(noting that Federal Circuit had already vacated and

remanded more than 100 PTAB decisions under

Arthrex).

The Federal Circuit had not yet decided Arthrex

when appellants like Polaris, Arthrex, and Bedgear

raised the Appointments Clause issue in their opening

briefs. adidas could have raised the issue too. But it

did not. As noted in the timeline above, adidas filed

its opening brief in the second Federal Circuit appeal

on August 30, 2019. By this time, numerous appellants already had raised the issue in their opening

briefs, and the question whether the Appointments

Clause might affect the constitutionality of PTAB

decisions had been the subject of extensive public

commentary in the wake of Lucia. E.g., R. Davis, Are

PTAB Appointments Unconstitutional? A Closer Look,

Law360 (Sept. 5, 2018); D. Crouch, Appointments and

Illegal Adjudication: A Second Patent Judge Appointments Crisis, Patently-O (Jan. 29, 2018); G. Lawson,

Appointments and Illegal Adjudication: The America

Invents Act Through a Constitutional Lens, 26 Geo.

Mason U. L. Rev. 26 (Jan. 2018). adidas had no excuse

for failing to raise the issue then, and it has no justification for attempting to raise it for the first time now.

This Court, in fact, already has denied multiple cert

petitions where the petitioner failed to raise the

Appointments Clause issue in its opening appeal brief

in the Federal Circuit. In none of these cases did the

cert petitioner exhibit the dereliction that adidas has

shown here. Unlike adidas, each of them at least had

lodged an Appointments Clause challenge at some

point during the Federal Circuit proceedings, yet this

Court still denied cert.

For example, in Sanofi-Aventis Deutschland GMBH

v. Mylan Pharmaceuticals Inc. (No. 19-1451), the cert

7

petitioner first raised the Appointments Clause issue

on November 5, 2019—less than a week after Arthrex

and two months after the Federal Circuit oral

argument—in a Federal Rule of Appellate Procedure

28(j) letter asking to file a supplemental brief on the

issue. The Sanofi-Aventis cert petition was distributed for the same September 29, 2020 Court conference for which the Arthrex petitions were initially

distributed. This Court nonetheless denied cert on

October 5, 2020.

Similarly, in IYM Technologies LLC v. RPX Corporation and Advanced Micro Devices, Inc. (No. 20-424),

the cert petitioner first raised the Appointments Clause

issue in timely-filed rehearing petitions at the Federal

Circuit—after the Federal Circuit had decided Arthrex,

which in turn had come after briefing in IYM’s appeals

had closed. The IYM cert petition was distributed for

the November 13, 2020 Court conference, a month

after this Court had granted certiorari in Arthrex.

This Court denied cert on November 16, 2020.

The Court likewise has denied petitions for certiorari in multiple other cases where the appellant had

raised the Appointments Clause issue after filing its

opening brief in the Federal Circuit but before arriving

on this Court’s doorstep. E.g., Essity Hygiene &

Health AB, et al. v. Cascades Canada ULC, et al., No.

20-131, cert. denied Oct. 13, 2020 (cert petitioner first

raised Appointments Clause issue in Federal Circuit

motion to remand on November 13, 2019, about two

weeks after Arthrex decision and before response and

reply briefs had been filed in appeal); Customedia

Techs., LLC v. Dish Network Corp., et al., No. 20-135,

cert. denied Oct. 13, 2020 (cert petitioner first raised

Appointments Clause issue in Federal Circuit after

briefing had closed by filing Rule 28(j) supplemental

8

authority letter, motion to remand, and motion for

leave to file a supplemental brief one day after the

Federal Circuit had decided Arthrex). The Court

considered the Essity and Customedia petitions at the

same conference (October 9, 2020) that produced the

cert grant in Arthrex. Yet those petitions were not

held; they were instead denied outright. The same

outcome is warranted here.

Finally, the cases cited by adidas do not support its

“anything goes” approach to forfeiture here. adidas

quotes Curtis Publishing Co. v. Butts for the proposition that “the mere failure to interpose [a constitutional] defense prior to the announcement of a decision

which might support it cannot prevent a litigant from

later invoking such a ground.” 388 U.S. 130, 143

(1967) (quoted in Pet. 10). But adidas omits the very

next sentence that this Court wrote in that case: “Of

course, it is equally clear that even constitutional

objections may be waived by a failure to raise them at

a proper time, [citation omitted], but an effective

waiver must, as was said in [citation omitted], be one

of a ‘known right or privilege.’” Id. Further, the Court

acknowledged that the new constitutional defense—

New York Times Co. v. Sullivan, 376 U. S. 254 (1964)—

had reversed “strong precedent indicating that civil

libel actions were immune from general constitutional

scrutiny,” and the petitioner had “immediately brought

[the new decision] to the attention of the trial court by

a motion for new trial.” Curtis, 388 U.S. at 138, 14344. adidas’s failure to raise this foreseeable issue at

all below, even after Arthrex was decided, stands in

stark contrast.

Freytag also does not help adidas’s cause. See

Freytag v. Commissioner, 501 U.S. 868 (1991) (cited in

Pet. 10). The Court described Freytag as “one of those

9

rare cases in which we should exercise our discretion

to hear petitioners’ challenge” notwithstanding a

potential waiver. Id. at 879. adidas’s petition, by

contrast, is a run-of-the-mill case of forfeiture of an

argument. adidas in fact failed to do anything below,

even after the Federal Circuit had decided Arthrex in

the midst of briefing in adidas’s appeal. The petitioner

in Freytag at least had raised the Appointments

Clause challenge before the Fifth Circuit. Id. at 893

(Scalia, J., concurring in part and concurring in the

judgment). Further, adidas’s petition does not implicate the “strong interest of the federal judiciary in

maintaining the constitutional plan of separation of

powers” that was invoked in Freytag, 501 U.S. at 879,

because this Court already has decided to hear a case

(Arthrex itself) that presents the issue. So there is no

risk that the issue may evade review if adidas’s

petition is denied. And as described above, the Court

has denied tag-along petitions for certiorari involving

less significant delays in raising the Arthrex issue

than adidas has perpetrated here.

This Court’s grant of certiorari in Arthrex does not

excuse adidas’s forfeiture either. As adidas acknowledges (Pet. 10-11), Arthrex raised its Appointments

Clause challenge in the Federal Circuit despite not

having raised it in the PTAB. Specifically, Arthrex

raised the issue in its opening brief along with a Rule

44 notice of its constitutional challenge. Dkt. 15 & 18,

No. 2018-2140 (Fed. Cir. Oct. 19, 2018). adidas, by

contrast, did nothing. adidas instead sat on its hands

despite having access to the arguments that Arthrex

and other appellants already had briefed and, later, to

the Arthrex decision itself. The two situations are not

remotely comparable.

10

Nor is adidas’s citation to the D.C. Circuit’s panel

opinion in PHH Corp. v. Consumer Financial Protection Bureau of any avail. 839 F.3d 1 (D.C. Cir. 2016),

rev’d en banc, 881 F.3d 75 (D.C. Cir. 2018) (cited in

Pet. 10). Unlike adidas, the challenger in PHH raised

the issue before the Court of Appeals, and the panel’s

decision did not involve any of this Court’s considerations governing the disposition of a petition for

certiorari.

B. adidas’s Status as the IPR Petitioner Is an

Additional and Independent Ground for

Denying Review

The forfeiture described above justifies denial of

adidas’s cert petition all by itself. Yet adidas’s status

as the IPR petitioner in the PTAB proceedings is a

further independent reason to deny the cert petition.

In Ciena Corp. v. Oyster Optics, LLC, the Federal

Circuit held that an IPR petitioner had forfeited its

Appointments Clause challenge because, by filing its

IPR petition, it “affirmatively sought a ruling from

the [PTAB] members, regardless of how they were

appointed.” 958 F.3d 1157, 1159 (Fed. Cir. 2020) (converting January 28, 2020 non-precedential order into

precedential order on May 5, 2020—all before the

Federal Circuit decided adidas’s second appeal). The

Federal Circuit also held, in the alternative, that the

IPR petitioner’s consent to the PTAB’s jurisdiction

“would most certainly doom” its challenge even if the

forfeiture were disregarded. Id. at 1161.

These holdings apply squarely to adidas’s situation

as the IPR petitioner here. But in its cert petition,

adidas does not even acknowledge these additional

barriers to relief, much less tee them up as questions

presented. adidas’s forfeiture of any Appointments

Clause challenge below is therefore compounded by its

11

further waiver of these threshold issues. Even if it had

not forfeited the underlying Appointments Clause challenge, adidas would need a favorable decision on these

issues before it could obtain any relief from this Court.

Accordingly, adidas’s failure to raise the issues—not

here, not below, not anywhere—is an additional independent reason why its cert petition should be denied.

12

CONCLUSION

It is both troubling and telling that adidas did not

even inform this Court of crucial procedural facts

giving rise to its forfeiture of the questions presented

by its petition. adidas is like a ticketless passenger

trying to board a train unnoticed by hiding in a crowd

of embarking travelers. Its ploy should be sniffed out

and rejected. adidas happily took its chances before

the PTAB and Federal Circuit without ever raising an

Appointments Clause challenge. Regardless of how

Arthrex turns out, adidas cannot obtain relief from this

Court “now that [it] is sad.” Stern, 564 U.S. at 482. By

failing to raise and preserve below the issues it now

urges, adidas has forfeited any access to review. The

petition for certiorari therefore should be denied.

Respectfully submitted,

CHRISTOPHER J. RENK

MICHAEL HARRIS

ARNOLD & PORTER

70 West Madison Street,

Suite 4200

Chicago, IL 60602-4321

(312) 583-2300

chris.renk@

arnoldporter.com

michael.harris@

arnoldporter.com

AARON G. FOUNTAIN

Counsel of Record

DLA PIPER LLP (US)

401 Congress Ave.,

Suite 2500

Austin, TX 78701

(512) 457-7000

aaron.fountain@

us.dlapiper.com

STANLEY J. PANIKOWSKI

DLA PIPER LLP (US)

401 B Street, Suite 1700

San Diego, CA 92101-4297

(619) 699-2643

stanley.panikowski@

us.dlapiper.com

Counsel for Respondent