By Lyssa Myska Allen
A Delaware court announced November 10 that it has granted Callaway Golf’s request for a permanent injunction to stop sales of Acushnet’s line of Titleist Pro V1 golf balls, effective January 1, 2009.
The lawsuit dates back to February of 2006, when Callaway Golf filed a patent infringement against Acushnet’s Titleist Pro V1 golf balls, one of the most popular balls in the world. According to research firm Golf Datatech, the Pro V1 and Pro V1x balls together accounted for 22.6 percent unit market share in September—more than all the ball models sold by any other single manufacturer.
“Callaway Golf has invested millions of dollars in Research and Development to create innovative products for millions of golfers around the world, and has protected those products with one of the broadest patent portfolios in golf,” said Steve McCracken, Senior Executive Vice President, Chief Administrative Officer, Callaway Golf. “We are very pleased with today’s decision which will stop the sale of these infringing Pro V1 golf balls.”
Acushnet immediately countered, with Joe Nauman, executive vice president, corporate and legal of Acushnet, saying, “Our Pro V1 golf balls are the product of technology developed and accumulated by the Acushnet Company over the past 20 years. Acushnet is the industry leader in developing golf ball technology and has over 650 active golf ball patents – more than any other manufacturer. Over 65 of these patents are related to the Pro V1 family.”
Not only will Acushnet seek relief from the injunction, but it also intends to have the courts declare invalid the four Callaway ball patents that Callaway alleges Acushnet infringed. Nauman goes on to say: “We will continue to defend ourselves vigorously and we fully expect to prevail in having all claims of all four patents at issue determined to be invalid in the appeal process. Our confidence is underpinned by the fact that the U.S. Patent and Trademark Office has issued final office actions which have determined these patents to be invalid.”
Acushnet is also taking steps to ensure its currently manufactured Pro V1 models are outside of the patents in the suit, saying that it has already changed the process and that current sales should not be affected. In addition, the company will introduce its next generation of Pro V1 products in the first quarter of 2009; these balls have been developed outside the scope of the patents in question, according to Nauman.
However, if Acushnet exhausts the appeals process without a victory, Callaway could benefit greatly. A clear legal victory would bolster the reputation of Callaway’s R&D capabilities just as their balls are gaining popularity on pro tours, and could favorably impact consumer perception. Monetarily, the rulings could force a settlement where Titleist pays Callaway between $100 million and $150 million based on a royalty from past Pro V1 sales.
While the injunction is a legal victory for Callaway, it appears that Acushnet has changed the production processes in such a way as to render the injunction a moot point going forward.