The Acushnet Co. had two days to bask in the glory of its fourth consecutive year of record operating income and revenue, because Feb. 9 the company was sued for patent infringement with regard to its flagship product, the Titleist Pro V1 golf ball line.
On Feb. 7, Fairhaven-based Acushnet, a division of Deerfield, Ill.-based Fortune Brands Inc., reported 2005 operating income of $171.5 million, an increase of 11.5 percent over 2004 (divisions of Fortune do not report net income; only the parent does), on revenue of $1.3 billion, an increase of 4.4 percent, making it the largest golf equipment company in the world. While the company also has dominant positions in the golf shoe and golf glove markets, and strong sales of golf clubs, it is Titleist golf balls that have driven the company’s success.
The Pro V1 family is the top of the Titleist line and retails on average for $40 per dozen. Even at that price, the balls account for more than one in five golf balls sold at golf specialty shops, according to company figures.
The suit was filed in U.S. District Court in Delaware by Callaway Golf. The Carlsbad, Calif.-based company alleges that Acushnet violated four patents relating to golf ball design and construction. While the Pro V1 was not the first solid-core, multi-layer ball produced, it has been the market leader from the moment it was brought to market in December 2000.
Callaway entered the ball business in 2000 with the Callaway brand, and in September 2003 it purchased the Top-Flite Golf Co. out of bankruptcy, adding that company’s balls to its own line. Top-Flite had been making golf balls (under that brand as well as its original Spalding brand) for more than a century.
The companies had been in negotiations for more than a year, according to Larry Dorman, Callaway’s senior vice president of global press and public relations, and filed suit only after the attempts to reach a settlement failed.
Acushnet released a statement that said, in part, “The Acushnet Company will vigorously defend itself against assertions made by Callaway Golf that Acushnet’s Titleist Pro V1 family of golf balls infringe four Callaway patents.”
At the same time, the company reported that on Jan. 17 it had “asked the U.S. Patent and Trademark Office to re-examine each of the four asserted patents.”
While the prospect of the top two golf equipment companies battling it out in court is certainly the news of the golf world, Acushnet has more than Callaway to deal with. Last spring, Bridgestone Sports, a division of Japan-based Bridgestone Corp., filed suit against Acushnet for infringing on a separate set of golf ball patents that cover solid-core ball technology. There has been no movement by the parties since it was filed.
Acushnet employs about 2,500 in the Fairhaven and New Bedford areas.