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Titleist Says Injunction Won't Impact ProV1 Sales

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.

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Robert Thompson

A bestselling author and award-winning columnist, Robert Thompson has been writing about business and sports, and particularly golf, for almost two decades. His reporting and commentary on golf has appeared in Golf Magazine, the Globe and Mail, T&L Golf and many other media outlets. Currently Robert is a columnist with Global Golf Post, golf analyst for Global News and Shaw Communications, and Senior Writer to ScoreGolf. The Going for the Green blog was launched in 2004.

3 CommentsLeave a comment

  • This should enhance the perception of Callaway’s R&D department. The inventions that are the subject of the patents weren’t developed by Callaway. These were patents obtained by Top-Flite, and which were acquired by Callaway when it bought the bankrupt company’s assets.

    This also shouldn’t impact negatively upon the perception that the Pro V1 is a superior ball. The patent only related to a single aspect of the solid core technology. The patents don’t apply to many other features of the Pro V1. Furthermore, it doesn’t mean that the Pro V1’s solid core technology is the same as that used in a Top-Flite…the patents can still be infringed even if they Pro V1 is an improvement upon the Top-Flite technology.

    What it does mean, though, is that Titleist is going to be paying a whack of dough in royalties for past infringing sales to Callaway.

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