By Rob Harris
Almost three and a half years ago, a Texas federal court denied SureShot’s claim that TopGolf’s acquisition of the Protracer technology constituted an antitrust violation in that it threatened SureShot’s ability to utilize this technology, thereby threatening its ongoing viability as a TopGolf competitor (Positively Neutral’s discussion of the initial decision is available here). Since then, the lower court’s decision was affirmed by the Fifth Circuit, leading to SureShot–which had terminated operations–filing a new lawsuit, again alleging antitrust violations by TopGolf. Again, SureShot’s claims have been dismissed by the Texas federal court.
By way of background, SureShot was established in 2014, ostensibly to provide a competitive alternative to TopGolf’s driving range/entertainment centers. To enhance its brand differentiation, SureShot acquired rights to the Protracer technology with which television golf fans are familiar. SureShot contracted for a five-year licensing arrangement, with annual one-year renewals that would be automatic unless either party provided advance notice of termination.
One year later, TopGolf acquired Protracer, creating concerns by SureShot that TopGolf would terminate SureShot’s access to the Protracer technology as soon as the contract permitted. As the court recently explained, “SureShot contends that under these circumstances, its financial backing began to unravel, and its business became economically unfeasible. At some point, SureShot ceased operations before ever opening a facility.” And the court agreed that “[i]t remains inescapable that the perceived but unspoken (or unconveyed in any fashion) threat of the possibility that Topgolf might withhold Protracer in the future was the motivation for SureShot’s decision to cease operations.”
Nonetheless, the court has reaffirmed its earlier decision that SureShot has failed to state a cognizable claim for antitrust violations against TopGolf: “SureShot has not alleged any kind of denial of access to establish that it suffered an injury-in-fact.”
SureShot failed to allege that TopGolf terminated SureShot’s contractual rights to the Protracer technology, or–especially since SureShot terminated operations before the agreement’s initial term expired–that TopGolf failed to agree to extend the agreement.
Even though the court concluded that the complaint’s allegations may have alleged “a monopolistic intent by Topgolf” in its acquisition of Protracer, “this alleged monopolistic intent is not adequately tethered to any antitrust activities or to an antitrust-related injury allegedly suffered by SureShot.”
Ron Harris is an attorney, who publishes the site www.GolfDisputeResoluton.com
