Callaway files lawsuit over patents

Updated: February 10, 2006, 2:45 PM ET
By Mike Stachura and E. Michael Johnson | Golf Digest.com

The most popular, most tour-validated and most revolutionary ball in the history of golf is now the principal exhibit in a lawsuit involving golf's two largest companies.

On Thursday, Callaway Golf filed a complaint in U.S. District Court in Delaware against Acushnet, alleging that Acushnet's Titleist Pro V1 line of golf balls infringes on four or more golf ball patents owned by Callaway. The lawsuit, says Callaway spokesman Larry Dorman, was filed "only after repeated attempts to negotiate a settlement failed." He would not specify how long the companies were negotiating, other than to say "quite a while."

According to multiple sources familiar with the situation, the two companies had been involved in discussions over golf-ball intellectual property since at least last summer.

"We are reviewing the lawsuit and have no comment on it at this time," said Joe Gomes, Titleist spokesman.

The intellectual property in question, referred to in the complaint as "the Sullivan patents," focuses primarily on the construction of a multilayer ball with a solid core and a polyurethane cover. The patents were acquired by Callaway in 2003 when it purchased Top-Flite Golf from bankruptcy.

The "Sullivan patents" is a reference to Michael J. Sullivan, former Top-Flite vice president of golf ball research and engineering and current Acushnet vice president of intellectual property. Sullivan, a chemist and polymer scientist, had his name listed on 133 patents through 2004. The Acushnet Company currently has 450 patents relating to golf-ball technology.

The complaint states that the Pro V1 line of balls has generated nearly $1 billion in sales "by incorporating the technology disclosed in the Sullivan patents." According to sales figures from industry tracker Golf Datatech, the Titleist Pro V1 and Pro V1x lines, introduced in 2000 and 2003, respectively, account for more than one out of every five golf balls sold and generate sales in excess of $200 million a year for Acushnet. In the $40-a-dozen market, the Pro V1 line owns nearly an 85 percent share. Although the lawsuit does not mention a specific dollar amount, it requests damages from lost profits, royalties and treble damages. Conservatively, that figure could approach $150 million, if granted.

According to the complaint, the Sullivan patents "revolutionized the game of golf" and "have done more to change the game of golf than any other equipment advance in the history of the game." Suggesting the Titleist Pro V1 line of golf balls "embody the technology of the Sullivan patents," the complaint alleges that Acushnet attempted to have the patents in question re-examined by the U.S. Patent and Trademark Office, and that Acushnet belatedly attempted to seek patents on "virtually the same technology" four years after the Sullivan patents were originally filed.

Acushnet also is embroiled in a patent-infringement lawsuit with Bridgestone Sports over the core formulations for the Pro V1 line, among other Acushnet balls. That suit, filed in March 2005, alleges "willful infringement" of 10 U.S. patents on solid-core golf ball technology. Acushnet has denied any wrongdoing in the Bridgestone complaint.

Mike Stachura is the equipment editor for Golf Digest magazine. E. Michael Johnson is the equipment editor for Golf World magazine