In a fascinating story, Callaway has received an injunction against Titleist and the ProV1 ball over the issue of violated patents.
GolfWeek has coverage of the matter here.
Callaway Golf officials are claiming a legal victory in their patent dispute with Titleist, which could result in blocking the sale of some Pro V1 balls by Jan. 1.
The U.S. District Court in Wilmington, Del., granted Nov. 10 Callaways request for a permanent injunction stopping sales of the current line of Pro V1 family of golf balls, according to Callaway officials.
But don’t be in too big a rush to run to GolfTown and stock up on ProV1s for fear they will disappear. Titleist said their current line of balls already works around the disputed patents and there will be new balls on the market next year.
“We strongly disagree with the judge’s ruling and will file an appeal and seek relief from the injunction,” said Joe Nauman, executive vice president, corporate and legal of Acushnet. “However, it’s important to recognize that this ruling will not have any impact on our ability to supply our customers with Pro V1 golf balls because of the following actions which we have undertaken. In September 2008, we converted production of the existing Pro V1 models so that they are outside of the patents in question; and we have also developed and will be introducing new and improved Titleist Pro V1 products in the first quarter of 2009 that are also outside the scope of the patents in question.
So what does the injuction mean? It is still significant, GolfWeek says:
As a result, the injunction, even if it takes effect, is unlikely to derail the Pro V1 franchise, a juggernaut that has dominated on professional tours as well as at retail since its debut in 2000. According to research firm Golf Datatech, the Pro V1 and Pro V1x balls together accounted for 22.6 percent unit market share in September “ more than all the ball models sold by any single, rival manufacturer.
Nevertheless, if Acushnet exhausts the appeals process without a favorable result, Callaway could benefit in more ways than one. A clear-cut legal victory would bolster the reputation of Callaways R&D capabilities, which have produced balls that are gaining popularity on pro tours. Just as important, it could impact the consumer perception of Titleist superiority.
Its also possible Callaway might net more than intangible returns. According to an analyst report written by Tim Conder, who follows Callaway for Wachovia Capital Markets, the rulings could force Titleist to come to a settlement “ $100 million to $150 million based on a royalty applied to past Pro V1 sales “ with (Callaway) sooner vs. later or wait pending a potential appeal.