Well, it finally happened – Costco has sued Acushnet. Yes, you read that correctly; Costco sued Acushnet. Costco is seeking a declaratory judgment that it is not infringing any valid patent rights owned by Acushnet by its sale of its Kirkland Signature golf balls and that it has not engaged in false advertising regarding the golf balls. Why did they take such a provocative step? The complaint states “[t]he need for such relief exists because Acushnet has wrongfully accused Costco of patent infringement and false advertising.” The following are some highlights from the complaint:
6. Costco is a membership-based retailer that is committed to bringing quality products to its members at low prices. In addition to selling name brand merchandise, Costco owns registered trademark rights to KIRKLAND SIGNATURE (“KS”), and sells a variety of items under that brand. In 2016, Costco introduced its KS golf ball, a golf ball that Costco sold at approximately $15 per dozen. The KS golf ball sold out quickly, and was praised by golfers and experts as a golf ball of tremendous quality and value. Many reviewers compared the KS golf ball to higher-priced “tour quality” golf balls sold by national brands, such as Titleist, Callaway, and TaylorMade. Even though the Costco KS golf ball has sold out, Costco plans to continue to sell the KS golf ball.
7. In response to the popularity of the KS golf ball, Acushnet sent Costco a threatening letter, wrongfully accusing Costco of infringing 11 Acushnet patents based on its sale of the KS golf ball and engaging in false advertising based on its Kirkland Signature guarantee that all Kirkland Signature products “meet or exceed the quality standards of leading national brands.”
8. A justiciable controversy exists as to whether Costco is infringing any valid patent rights owned by Acushnet as a result of Costco’s sale of the KS golf ball or has engaged in any false advertising in connection with such golf ball.
9. Costco’s sales of the KS golf ball do not infringe any valid patent rights owned by Acushnet, including any valid patent claims identified by Acushnet in its correspondence. Accordingly, Costco respectfully requests that the Court issue a declaratory judgment confirming that Costco is not infringing any Acushnet patent rights as a result of its sale of the KS golf ball, including any valid patent claims identified by Acushnet. The specific patents identified by Acushnet are listed below.
XVI. REQUEST FOR DECLARATORY JUDGMENT CONCERNING CLAIM OF FALSE ADVERTISING
54. Costco re-alleges paragraphs 1 through 53 above as if fully set forth herein.
55. Acushnet has accused Costco of false advertising based on its Kirkland Signature guarantee, which is not specific to the KS golf ball, and which states that Kirkland Signature products “meet or exceed the quality standards of leading national brands.”
56. Acushnet asserts that the statement is intended to indicate to a reasonable consumer that the KS golf ball is the same or of greater quality as Acushnet’s Pro V1 golf ball.
57. Costco has never publicly compared the KS ball with any Acushnet ball, including Acushnet’s Pro V1 golf balls.
58. A reasonable consumer would not interpret the Kirkland Signature guarantee as intended to convey a statement of fact about any specific comparisons of quality between the KS ball and any specific manufacturer or ball, including Acushnet and its Pro V1 ball.
59. In addition, to the extent a consumer would interpret the Kirkland Signature guarantee in that manner, the statement is true. Many individual golfers and golf ball testers and experts have used and/or tested the KS ball and concluded that it is at least comparable to balls sold by other leading national brands, including Acushnet.
60. Costco is entitled to a declaratory judgment that it has not engaged in any false advertising in connection with the KS golf ball.
This should get real interesting, real fast. I can’t help but wonder whether Costco has any intention of seeing this through; after all, the cost of litigating the validity of 11 patents will be significant to say the least. I will post Acushnet’s response as soon as it is available.
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