Acushnet Responds to Callaway’s Motion for Permanent Injunction… The Redacted Version Is In and It Even Contains a Reference to this Blog!

March 6, 2008 admin 698 Views

It took about a week, but the redacted version of Acushnet’s response to Callaway’s request for a permanent injunction is in! The redacted version of “Acushnet’s Brief in Opposition to Callaway Golf’s Motion for Permanent Injunction” is available HERE to review the redacted version of “Callaway Golf Company’s Brief in Support of Motion for Permanent Injunction,” or click HERE for my post on the permanent injunction motion.

Apparently these have been some pretty popular links as I have learned from Acushnet’s Brief in Opposition that “[a] Callaway sales representative has also circulated a link to Callaway’s brief, posted on a website, to Acushnet retailers.” Come on; throw me a bone, would it have killed you to say a “popular” website, or an “entertaining” website. Oh well, at least one of the exhibits (a Declaration of David Maher, the VP of US Titleist Sales) does mention the maliciously used website… see below:

5) Through reports from our Sales Representatives and Sales Leaders, I have learned that Callaway and its employees have been making confusing and misleading statements about this lawsuit, since the verdict and Callaway’s filing of its motion for permanent injunction, both to golfers and to Titleist’s accounts. For example:

* Titleist accounts have been informed that they are no longer allowed to sell Pro V1 golf balls.

* At least one Callaway sales representative has made statements to Titleist accounts claiming that the Titleist Pro V1 would soon be called the Callaway Pro V1.

* Several golf course accounts have been informed that they will have to pull their Pro V1 balls off of their shelves.

*Callaway representatives have informed Titleist accounts that Acushnet will not be able to ship Pro V1 golf balls this spring and that they will need to buy more Callaway balls to make up the difference.

* Callaway representatives have told Titleist accounts that an injunction will soon issue preventing Acushnet from selling Pro V1 balls.

* Callaway employees have emailed links to “The IP Golf Guy” legal blog, a website that comments regularly on this lawsuit, to Acushnet’s accounts in Europe.

* Rumors have been circulated among Tour Players that they will not be able to play Pro V1 golf balls in Tournaments this year.

Guys, come on… if you are going to use my links to talk trash about your competition, couldn’t you arrange for a sleeve of balls to show up in my mail, perhaps a set of last season’s clubs, maybe an FT-i driver? Kidding of course… (…right handed, stiff flex…)

Anyway, back to the important stuff. Acushnet’s Brief in Opposition is good. It seems to persuasively address all the issues required to oppose a permanent injunction. But, let’s face it… the only ones that are going to read the full Brief are probably attorneys that visit this site. Therefore, let me skip right to the informative and entertaining stuff, which I have conveniently formatted in a David Letterman style “Top 10” list, but with a unique “Top 6” twist. (disclaimer…… I don’t necessarily agree with, or promote, any of these quotes from the Brief…… but they are informative and entertaining)

Number 6: Acushnet believes that the inconsistent jury verdict should caution against an injunction.

“The jury meanwhile rendered a split and inconsistent verdict on the patent claims. The jury reached this verdict despite patentably indistinguishable claims sharing the same prior art, and a trial that focused on the patents as a single invention. Callaway does not hesitate to continue this theme with an effort to paint itself as the innovator of the “solid core / multilayer / urethane-covered” golf ball, urging this as a basis for injunction. But in order for the jury to have rendered its verdict on claim 5 of the ‘293 patent, which it found invalid, it must have necessarily also determined that Callaway’s “innovative” construction was obvious and unpatentable, thus rejecting the argument Callaway advances.

When the jury’s invalidation of claim 5 of the ‘293 patent is coupled with the Patent Office twice recently declaring every claim of the patents-in-suit invalid, this court has “legitimate reason to question whether [Callaway] will suffer irreparable harm” and whether the equities of an injunction favor Callaway. MercExchange, 500 F. Supp. 2d at 575 n.15; id. at 574 (“when crafting prospective equitable relief the court cannot ignore such realities”) (emphasis in original).”

Number 5: Acushnet is unhappy with “Callaway’s misleading statements in the market.”

“Since the jury verdict in this case, Callaway’s sales force has embarked on a campaign of misinformation and confusion in an attempt to interfere with Acushnet’s contractual relations with its accounts (including retailers). Callaway has used the threat of an injunction as the show-piece in its efforts. Specifically, Callaway has told Acushnet accounts that they are no longer allowed to sell Pro V1 balls, that the Pro VI would now be known as the “Callaway Pro V1,” that they will have to pull Pro V1 balls from their shelves, that they will not be able to ship Pro VI balls this spring, and that an injunction will soon issue from this Court. Ex. 14, Maher Decl. 115, Exs. A-E.

Callaway filed a public version of its motion for injunction on January 16, the day before the start of the PGA Golf Show in Orlando from January 17-19, 2008 and days before it was due under the agreed scheduling order. Ex. 4, Nauman Decl. 1126. This annual show is a major event in the industry. Id.”

Number 4: Acushnet plans to launch a new 2009 version of the Pro V1 family in the first quarter of 2009 that will “avoid” the patents-in-suit.

“Golf ball companies typically announce new products in the First Quarter of the year. Acushnet follows this practice. Accordingly, new versions of the Pro V1 have been introduced every two years, in the First Quarter of 2003, 2005 and 2007. Ex. 18, Morgan Decl. IN 8 & 24. With this event in mind, Acushnet is currently planning to launch new versions of the Pro V1 and Pro Vlx in the First Quarter of 2009. Id. at T118-10. The plans associated with this product launch have been in place for some time. Id. at TT 15-16.”

Number 3: According to Acushnet, Callaway also infringed the patents-in-suit before Callaway purchased the patents from Spalding (interesting, although not particularly relevant); PLUS Acushnet believes that Callaway intentionally timed the permanent injunction motion filing to coincide with the PGA show.

“Substantively, Callaway’s alleged proofs of irreparable harm are legally insufficient. Callaway claims that it had a “leadership” position in the market following the introduction of the Rule 35 b
all, and was harmed at this “critical time” by the introduction of the Pro VI. However, nearly all of this alleged “harm” occurred in 2000-01, before the patents issued. After the patents issued to Spalding, Callaway was just another infringer of the patents. Any “harm” it claims to have suffered as an infringer is not cognizable in a patent case. One wonders to what audience Callaway’s brief (filed earlier than scheduled to coincide with the annual PGA golf trade show in Orlando) was intended, for these arguments do not constitute legally cognizable injury. Likewise, Callaway’s claims of innovation injury, public statements it does not like, and damage that occurred long ago (the vast majority of its brief) do not entitle it to an injunction.

Additionally, Callaway does not use the technology in suit. It bought the patents in a bankruptcy auction, does not use them, and filed this case to collect money. While Callaway undoubtedly is a competitor of Acushnet, as to this technology it much more resembles the single purpose entities that routinely have requests for injunction denied post e-Bay.”

Number 2: Acushnet emphasizes that the USPTO reexamination of patents-in-suit is not going well for Callaway.

“Here, the Patent Office – with the participation of four examiners – has twice rejected every one of the patent claims-at-issue. The Patent Office’s office actions have been so thoroughly considered, that there has been more than a thousand pages of analysis written by the examiners rejecting Callaway’s patent over numerous combinations of prior art.”

“At the time of trial, the Patent Office had issued office actions rejecting each claim of the patents-in-suit over the prior art advanced by Acushnet at trial. Since the trial, the Patent Office has further considered Callaway’s arguments and secondary considerations evidence, and issued second office actions. Again, the Patent Office has rejected all of the claims as invalid. Copies of the Patent Office’s office actions, if not already of record, are provided herewith. See Exs. 15-17; D.1. 328 Att. 1-2; D.I. 185, Exs. A-D.”

Number 1: The best quote from the Brief probably has no legal value, but it contains some great mudslinging and I am sure that Acushnet loved to get some of Mickelson’s quotes out to the public. The following quote from the Brief refers to notes from one of Acushnet’s test sessions with Phil Mickelson in June of 2000. (I bet Acushnet loved putting this in the Brief) The complete exhibit is pretty interesting and may be viewed According to Callaway, the Rule 35 had “superior performance.” DI 412 at 13. Mr. Mickelson, however, had a very different opinion of this ball when he tested it. Before he was paid in excess of XXXX per year to endorse Callaway’s golf products, he blind-tested Callaway’s Rule 35 Red and Blue balls in June 2000 against a Pro V1 prototype. He did not mince words over Callaway’s “innovation.”

Mr. Mickelson described the Rule 35 Red with a vulgarity as, “the epitome of a sh*tty ball…. It spins like cr*p around the greens. It goes short and flutters with the irons. You can have that one.” Ex. 23, DX-1008. Neither was he complementary about the Rule 35 Blue: “[T]he misses are just so magnified with the [Rule 35 Blue]. It flutters up and to the left. I’m not all that high on that one.” Id. The Pro V1, on the other hand, met with Mr. Mickelson’s whole hearted approval. “The [Pro VI] is a frickin’ awesome ball. It has a tight ball flight. Into the wind it is holding a tight flight, there’s no flutter. The sauce is tremendous around the green. It flew by those other two [the Callaway Rule 35 Red & Blue balls] that I hit well.” Id 10

Mr. Mickelson’s testimony thus supports Acushnet’s argument that the Pro V1 outsold the Rule 35 because it was a better golf ball, for reasons other than the technology-in-suit that both balls practiced.

Good stuff!

Callaway now has until March 6th, today, to file their Reply Brief, and then I will give you my prediction!

David Dawsey – The IP Golf Guy