FAIRHAVEN – Acushnet Co., the golf business of Fortune Brands Inc. (NYSE: FO), this week lost the latest battle in its ongoing patent dispute with Carlsbad, Calif.-based Callaway Golf Co. (NYSE:ELY) over certain Titleist Pro V1 golf balls, but the local company still predicts it will win the war.
“This decision will not interfere with Titleist’s ability to continue to manufacture, distribute and sell Pro V1 golf balls,” Joe Nauman, Acushnet’s executive vice president, corporate and legal, said after a federal appeals court rejected the company’s request for a stay of an injunction that is now slated to take effect on Jan. 1.
Their dispute dates back to 2006, when Callaway filed suit in U.S. District Court, Delaware, alleging that Acushnet’s Pro V1 family of golf balls infringed on four Callaway patents for multi-layered golf balls. Acushnet responded by contending that the rival company’s patents were not valid. (READ MORE)
A jury last year ruled that three of Callaway’s patents were valid. But the mixed decision had “created ambiguity,” Nauman said at the time, adding that “we continue to believe that we will ultimately prevail.” (READ MORE)
Last month, the District Court granted Callaway’s request for an injunction against Titleist Pro V1 balls using the disputed technology. Acushnet responded by seeking a stay of the injunction and filing an appeal of other of the court’s decisions. (READ MORE)
“While the stay was not granted, we understand that it was a request for extraordinary relief based upon a limited review,” Nauman said this week.
The company noted that in September – “well in advance of the District Court’s injunction” – it had converted its production of existing Pro V1 models “to be outside the patents in question.” So by Jan. 1, retailers will have only limited quantities of Titleist golf balls manufactured using the disputed technology.
“Acushnet does not believe that the injunction order requires Acushnet to recall any Pro V1 golf balls from retailers, or that retailers are required to return any golf balls to Acushnet,” Nauman added. “However, Acushnet is prepared to accept returns of non-converted retail inventory, if requested by retailers.”
The Callaway Golf had a darker view of the decision: In rejecting Acushnet’s motion for a stay, the U.S. Court of Appeals ruled that the Fairhaven company “had neither shown that the balance of hardships tipped in its favor nor that it had … a substantial likelihood of success on the merits in its ultimate appeal,” the company said in a statement.
“Callaway Golf believes it is time for Acushnet to accept its losses in court and get on with the task of helping retailers clean up their inventories,” said Steve McCracken, the company’s senior executive vice president and administrative officer. “Three courts have ruled that Acushnet violates Callaway Golf’s patents,” added Michèle Szynal.
Acushnet, however, continues to “firmly believe in our position and will continue to defend ourselves vigorously in the appeal process,” Nauman said.
“We expect to prevail in having all claims of all four patents at issue determined to be invalid, once the appeal is fully briefed and argued. 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 Co. – a maker of golf equipment and apparel under brands including Titleist, Cobra, FootJoy and Pinnacle – is a unit of Deerfield, Ill.-based consumer brands company Fortune Brands Inc. (NYSE: FO), whose businesses also include manufactures and marketers of distilled spirits and home and hardware products. For more information, go to www.FortuneBrands.com or www.AcushnetCompany.com.
