BOMB: You know, talking to some people in the industry, including retailers, about Callaway's legal victory and getting an injunction from the court against Titleist, most felt it was much ado about nothing (unless there was a mega-million-dollar judgment down the road, of course). But you wouldn't know it from how the two parties involved are acting, now would you? The chippiness make this legal fight look like it belongs in an NHL game, starting with this lengthy rebuttal note from Acushnet's Wally Uihlein, dated Nov. 16:
To Media:
TITLEIST PRO V1 LITIGATION FACT SHEET
FREQUENTLY ASKED QUESTIONS
Many questions have arisen in connection with the ongoing litigation between
Acushnet Company and Callaway Golf regarding certain patents and Titleist
Pro V1 and Pro V1x golf balls. To avoid any misunderstandings, below are
some Frequently Asked Questions and Acushnet Company's responses. Throughout
this list, we refer to "Pro V1" golf balls. These responses apply equally to
Pro V1x golf balls.
What is this litigation about?
Titleist introduced the Pro V1 golf ball, based on its own technological
advancements and research, in 2000. Pro V1 golf balls incorporate the
combination of many Titleist technologies developed and accumulated over the
past 20 years. Acushnet Company is the golf ball industry technology leader,
with over 650 active golf ball patents -- more than any other manufacturer.
Over 65 of these patents cover the Pro V1 family.
The patents
Spalding received 4 patents in 2001 and 2003, well after the Pro V1 was
developed and introduced. Callaway acquired these patents when they
purchased Spalding in 2003. We believe these patents are invalid and should
never have been issued in the first place. The U.S. Patent and Trademark
Office agrees with Acushnet. It has reexamined the patents and issued final
actions that all 4 of these patents are invalid and should never have been
issued.
The trial
Callaway filed suit in 2006, claiming that our Pro V1 golf balls infringe
these 4 patents. In 2007, a jury found partially in favor of Callaway and
partially in favor of Acushnet.
The appeal
We disagree with the trial court's ruling, especially as the court did not
permit the jury to consider very important evidence, including the fact that
the U.S. Patent and Trademark Office has issued actions that all four
patents are invalid. We believe that this resulted in the trial court coming
to the wrong conclusion. We will appeal this case to the Federal Circuit
Court of Appeals, who will consider this important evidence.
The injunction
Callaway asked the lower court for an order stopping Acushnet from selling
golf balls covered by the patents. We believe that this was inappropriate
for several reasons, including the jury's "split decision", the U.S. Patent
and Trademark Office's actions that all 4 patents are invalid, Callaway's
year long delay in bringing suit, and the fact that Callaway does not use
these patents. The lower court ruled that Acushnet may not sell Pro V1 golf
balls covered by the patents after January 1, 2009.
Litigation next steps
Acushnet will ask the Federal Circuit Court of Appeals to put the injunction
on hold while the appeal is decided. We believe we have a very strong basis
for that request, including the fact that the appeals court will consider
the patent office decisions rejecting the four patents. If our request is
granted, the injunction will not come into effect.
Can golfers play and purchase Titleist Pro V1 golf balls now?
Yes. Golfers can play and purchase Titleist Pro V1 golf balls with
confidence. All Pro V1 golf balls (those golfers might already own and any
new purchases) conform to USGA rules and are legal for play and purchase.
Can Golf Shops sell Titleist Pro V1 golf balls between now and January 1,
2009?
Yes. Golf Shops can sell existing inventory of Pro V1 golf balls and order
additional supplies.
Will golfers be able to play and purchase Titleist Pro V1 golf balls after
January 1, 2009?
Yes. The recent court order will not impact our ability to supply Golf Shops
with Pro V1 golf balls. In September 2008, we converted production of the
existing Pro V1 models so that they are outside the scope of the patents in
question. Golf Shops can continue to order and take delivery of Pro V1 golf
balls now and after January 1, 2009 and golfers can continue to play with
and purchase Pro V1 with confidence.
Is there a performance difference between the existing Pro V1 golf balls and
the converted production models?
No. While a number of changes in the manufacturing process were required to
address the patent issues, performance and quality are indistinguishable
from the current products and the converted products have been Tour
validated.
How can I distinguish between the existing Pro V1 golf balls and the
converted models?
Converted Pro V1 models have the same packaging and sidestamps as the
existing models. However, there is a small red or black circular sticker or
marking on every Pro V1 dozen box and sleeve to identify the converted
production.
Does the converted product conform to USGA Rules?
Yes. Titleist Pro V1 golf balls have always conformed to USGA Rules and
these products are no exception.
Can Golf Shops sell Titleist Pro V1 golf balls after January 1, 2009?
Yes. Titleist will continue to offer converted Pro V1 products after January
1, 2009 and will introduce new Pro V1 products in the first quarter of 2009.
Callaway and Acushnet disagree with respect to the scope of the court's
order regarding the Pro V1 golf balls that are covered by the Callaway
patents and that remain in retail inventory after January 1, 2009. Callaway
has expressed its position in a letter to the trade dated November 14, 2008.
We disagree with Callaway's position. We believe that the court order does
not require the removal of any Pro V1 products that may be on retail shelves
on January 1, 2009. However, the order may be read to prevent Acushnet from
providing advice to its customers on this issue. We are providing a copy of
the order to our customers so that they can reach their own conclusion on
this issue. This issue may get decided by the court. If the court determines
that Golf Shops may not sell Pro V1 golf balls covered by the patents after
January 1, 2009, Acushnet will accept returns of that existing inventory and
will replace it with Pro V1 golf balls that are outside the claims of the
patents.
Can Tour players play Titleist Pro V1 golf balls now and after January 1,
2009?
Yes. Tour players can play Titleist Pro V1 golf balls with confidence. Pro
V1 is and will remain available to all Titleist golf ball players on the
worldwide professional tours and can be played both before and after January
1, 2009. If the injunction is not put on hold, Tour events in the United
States will be supplied with converted current product or 2009 product.
Will new 2009 Pro V1 and golf balls perform differently or be marked
differently?
As Titleist has always done throughout its 75 year history, we introduce new
and improved golf balls when we have a better performing product. We
introduced new Pro V1 products in 2003, 2005, 2007 and will introduce new
products in 2009. The New 2009 Pro V1 models will perform differently from
and better than the current Pro V1 models. Titleist has tested prototypes
extensively with Tour players this fall and player feedback has been
extremely favorable. Players on the worldwide professional tours can put the
New 2009 Pro V1 models into competitive play when the Tours resume their
schedules in January 2009. The New 2009 models will feature different
sidestamps and packaging and appear as different listings on the USGA
Conforming Ball List.
When can golfers play new 2009 Pro V1 golf balls?
Titleist will launch New 2009 Pro V1 golf balls in the 1st quarter of 2009.
The technology and construction of New 2009 Pro V1 golf balls are outside
the scope of the patents. In Q1 2009, golfers can learn about the exciting
new product improvements via their local golf shop, on Titleist.com and in
other Titleist advertising and communications.
Does Callaway use the technology in these patents in its golf balls?
No.
Does the court ruling apply outside the United States?
No. The court ruling does not apply outside the United States.
Sincerely,
Wally Uihlein
Chairman and CEO
Acushnet Company
Phew! But it didn't stop there, now did it my friend?
GOUGE: Sincerely? Oh, reeeealllly.
Of course, I like ugliness more than the next guy. Big fan of integrity, too. But in a he-said, he-said confrontation, the only thing truly enjoyable is watching from the sidelines. As one retailer told us recently, this glorified shouting match is essentially "a non-event" in the minds of consumers. Or at least it is, until you start seeing ads like this. Lot of chest-thumping over something the USGA seems to think doesn't matter a hill of beans. For instance, when Titleist informed the USGA of the change to the composition of the Pro V1 in September to steer it clear (preemptively) of the infringing patents, it seems to be nothing more than a journal entry as far as the ball's conformance standards go. Didn't even have to change the stamping or markings. Of course if the performance of the ball hasn't changed, why would they be fighting in court about it, and why would Callaway have paid $125 million to buy a dead company (Top-Flite) for patents that now lie at the center of this argument? Callaway isn't talking specifics when it comes to dollar amounts, but rest assured the money-changers would at least like a small return on that investment and what better than to have the damages cover the original charges. That's just good business. Or, well, business.
Hard to say who's telling the truth, assuming such a concept exists anymore. What it really may end up being is a PR war, and while a note to "Dear Media" is one blustery tactic, this full-page ad is the kind of rapid fire you used to get in a decent shoot-'em-up movie, like say The Godfather. Clearly, Callaway has gone to the mattresses, and this is Exhibit A:





















