Charles Schwab Challenge

Colonial Country Club

The Loop

Injunction granted in Callaway/Acushnet suit

November 10, 2008

After two-plus years of legal wrangling, there has been a development in the patent-infringement lawsuit between Callaway and Acushnet that may begin to answer the one question golfers want to know regarding the case: What will happen to the Pro V1s on my shop's shelf?

The United States District Court in Wilmington, Del., has granted Callaway's request for a permanent injunction to stop sales of Acushnet's current line of Titleist Pro V1 family of golf balls, effective no later than January 1, 2009.

In its ruling today, the Court also rejected Acushnet's request to overturn the jury's December 2007 verdict which found that Callaway Golf's golf ball patents were valid and infringed by Acushnet's Titleist Pro V1 family of golf balls.

"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 and chief administrative officer for Callaway Golf. "We are very pleased with today's decision which will stop the sale of these infringing Pro V1 golf balls."

At issue was a series of patents referred to as the "Sullivan patents," a reference to Michael J. Sullivan. Sullivan is the former vice president of golf-ball research and development for Top-Flite who left that company in 1999 and went to work for Acushnet as vice president for intellectual property. The patents covered, among other things, solid-core golf-ball technology used in Titleist's Pro V1 and Pro V1x balls.

Key to the ruling, however, is the phrase "Acushnet's current line of Titleist Pro V1 family of golf balls." Although the court's ruling would appear to indicate that some inventory of Pro V1s currently on shelves may have to be stopped, the Acushnet Company, parent company of Titleist, said it will file an appeal and that it does not expect the ruling to have a material adverse impact on its results.

"We strongly disagree with the judge's ruling and will file an appeal and seek relief from the injunction," said Joe Nauman, Acushnet's executive vice president, corporate and legal. Nauman further added that the ruling will not impact the company's ability to supply golfers with Pro V1 golf balls.  According to a statement released by Acushnet, in September 2008, Titleist converted production of existing Pro V1 models so that they were outside the patents in question. The company also said it has developed and will introduce new Titleist Pro V1 products in the first quarter of 2009 that also are outside the patents in question.

Stay tuned.--E. Michael Johnson