An Update on the Latest Golf Ball Patent Infringement Lawsuits

32.    In prior litigation, Titleist admitted in this Court that all of its Pro V1 golf balls sold from 2000 to September 2008 infringed the technology claimed in the Sullivan I patents.
ANSWER: Denied.

33.    The prior litigation began after an extensive mediation process required by a settlement agreement between the parties. On February 9, 2006 Callaway Golf filed the prior suit here in the District of Delaware, Callaway Golf Company v. Acushnet Company, C.A. No. 06-091 (SLR), accusing Acushnet’s line of Titleist Pro V1 golf balls of patent infringement.
ANSWER: Acushnet admits that Callaway filed suit against Acushnet in this Court on February 9, 2006, that that lawsuit was styled Callaway Golf Company v. Acushnet Company, C.A. No. 06-091 (SLR), and that Callaway accused certain of Acushnet’s Pro V1 line of golf balls of patent infringement in that lawsuit. Otherwise, Acushnet denies the allegations in paragraph 35.

36.    Specifically, in the prior case, Callaway Golf asserted that Acushnet’s
Pro V1 family of golf balls, including the Pro V1 and Pro Vlx lines, infringed the Sullivan I patents.
ANSWER: Acushnet admits that Callaway asserted that Acushnet’s Pro V1 family of golf balls, as it existed at that time, including the Pro V1 and Pro Vlx lines, infringed United States Patent Nos. 6,210,293, 6,503,156, 6,506,130 and 6,595,873. Otherwise, Acushnet denies the allegations in paragraph 36.
 
37.    On December 3, 2007, the eve of trial, Acushnet made the admission that its line of Pro V1 and Pro V1x golf balls infringed the asserted claims of the Sullivan I patents.
ANSWER: Acushnet admits that to simplify the trial and focus it on invalidity issues, Acushnet made a stipulation regarding infringement of certain claims of U.S. Patent Nos. 6,210,293; 6,503,156; 6,506,130; and 6,595,873. Otherwise, Acushnet denies the allegations in paragraph 37.

38.    A jury trial then followed. On December 14, 2007, the jury found that eight of the nine asserted claims from the Sullivan I patents were valid, thereby making Acushnet liable for its patent infringement. The Court entered judgment against Acushnet on December 20, 2007.
ANSWER: Acushnet admits that on December 14, 2007, the jury rendered an inconsistent verdict, that found eight of the nine asserted claims from the patents-in-suit were not invalid and found one of the claims was proven invalid. Acushnet further admits that the Court entered judgment on December 20, 2007. Acushnet denies the remaining allegations in paragraph 38.

39.    Following the jury verdict in Callaway Golf’s favor, Callaway Golf filed a motion seeking a permanent injunction barring Acushnet from selling the infringing line of Pro V1 golf balls. Acushnet filed post-trial motions seeking a new trial and a ruling overturning the jury’s verdict. Acushnet also filed a motion seeking to stay any injunction that the Court might enter.
ANSWER: Acushnet admits that following the jury verdict Callaway filed a motion seeking a permanent injunction and that Acushnet filed post-trial motions.

40.    On November 10, 2008, the Court issued an Order granting Callaway Golf’s request that Acushnet’s line of infringing Pro V1 golf balls, including the Pro V1 and Pro Vlx golf balls, be enjoined and denying Acushnet’s requests to overturn the jury’s verdict and stay the injunction.
ANSWER: Acushnet admits that on November 10, 2008 the Court granted Callaway’s request for an injunction and denied Acushnet’s post-trial motions. Acushnet directs the Court to the injunction issued on November 10, 2008 for the specific details of the injunction. Otherwise, Acushnet denies the allegations in paragraph 40.

41. &nbsp
;  Specifically the Court Ordered with respect to the injunction:

1.    Pursuant to 35 U.S.C. § 283, Acushnet and its successors, assigns, officers, agents, servants, employees, attorneys, and persons in active concert or participation with them, including any affiliated entities, during the term of the patents-in-suit (U.S. Patent Nos. 6,210,293; 6,503,156; 6,506,130; and 6,595,873), are hereby ENJOINED and RESTRAINED from infringing and from inducing, contributing to, or otherwise causing the infringement of the Relevant Patent Claims by making, using, selling, or offering to sell in the United States, or importing into the United States, or by inducing, contributing to, or otherwise causing the performance of any such activities by third parties with regard to, any of the Pro V1 1® line of golf balls including the Pro Vi®, Pro V lx®, Pro V1*®, or any variations thereof not more than colorably different (collectively “the Pro Vi® products”).
2.    Acushnet’s professional golfers currently under contract are permitted to play Pro Vl® products through the end of the 2008 calendar year.

ANSWER: Acushnet admits the allegations in paragraph 41.

42.    On November 19, 2008 Acushnet filed a Notice of Appeal and also
filed a motion with the United States Court of Appeals for the Federal Circuit seeking to stay the permanent injunction pending appeal.
ANSWER: Acushnet admits the allegations in paragraph 42.

43.    On December 23, 2008 the Federal Circuit issued an order denying Acushnet’s request that the permanent injunction be stayed pending appeal. The Federal Circuit further noted as one of its reasons for denying the stay that “…Acushnet has not demonstrated a strong likelihood of success for its forthcoming appeal] in its motion papers.”
ANSWER: Acushnet admits that on December 23, 2008 the Federal Circuit denied Acushnet’s request for a stay of the injunction pending appeal without prejudice to the panel’s consideration of the merits. Acushnet directs the Court to the December 23, 2008 order from the Federal Circuit for the full text of its order.

44.    Despite admitting that its line of Pro V1 golf balls made prior to September 2008 infringe Callaway Golf’s patents, Acushnet has repeatedly made misleading statements concerning the nature of its golf balls, including the following:

a.    “The [Callaway Golf] patents at issue are directed to multi-layer, solid construction golf balls with urethane covers. Acushnet received its first patent covering this technology on March 3, 1999. The oldest of the Callaway patents being asserted was not filed until December 12, 1999 and issued on March 15, 2001. The other three patents were all filed in 2001, well after the Titleist Pro V1 was introduced at the Invensys Classic on October 12, 2000.” This statement falsely implies that Acushnet was the first to patent the “Holy Grail” of golf ball technology that has made the Titleist Pro Vi ‘the best selling golf balls of all time.” In truth, Acushnet knows that Sullivan conceived of his inventions years before Acushnet developed the Pro VI golf ball, and Acushnet itself conceded that the priority filing date for all of the four Sullivan I patents was no later than 1995.
b.    “One [Acushnet] patent directly related to the Pro V1 was issued in 1999, before Spalding’s 1999 application that led to a patent in 2001.” Again, this statement falsely implies that Acushnet was the first to patent the “Holy Grail” of golf ball technology that has made the Titleist Pro V1 “the best selling golf balls of all time.” The relevant Acushnet patent application was not filed until 1997, years after the 1995 patent applications which led directly to the Sullivan I patents.
c.    The litigation between Callaway Golf and Acushnet “relates to patents that were issued by the U.S. Patent and Trademark Office after the Pro V1 came into the market and became the best-selling ball in golf.” This statement falsely implies that the Sullivan I patents came after Acushnet’s Pro V1, yet Acushnet itself knows and has conceded in Court filings that the Sullivan I patents were filed years before the Pro V1 came into the market.
d.    “With the Pro V1 and Pro Vlx, players no longer have to trade-off distance and durability for spin, feel and control around the green.” This statement falsely implies that Acushnet was the first to invent the “Holy Grail” golf ball with great distance and great control, and that the Titleist Pro V1 is that very ball. Yet, Acushnet knows and has admitted that Mr. Sullivan conceived of his patented golf ball long before the release of the Pro V1, and that Callaway Golf’s own Rule 35 golf balls embodying that invention were in fact commercially introduced before the Titleist Pro V1 products.

ANSWER: Denied. Acushnet further answers that, well before 1995, polyurethane was used in balls having both solid and wound cores. For example, in 1994, Acushnet introduced the Titleist Professional ball in the U.S., which had a wound core and a cast polyurethane cover. Ms. Shenshen Wu, of Acushnet, obtained a patent on this cover in August 1994, U.S. Patent No. 5,334,673 (“the ‘673 patent” or “the Wu patent”). It was not until Spalding’s inventor (Mr. Sullivan) read the Wu patent that he even began to experiment with castable polyurethane covers. By April 1995, years before the Sullivan I patents issued and months before their priority dates, Acushnet had already asked Ms. Wu to make several golf balls having the basic construction of the Pro V1 — a solid center, hard ionomer cover, and Wu’s castable polyurethane outer cover. Mr. Sullivan, on the other hand, never made golf balls with a thin castable urethane cover like the Pro V1 construction. Moreover, to the extent that Callaway argues that a solid core golf ball with an ionomer inner cover layer and a polyurethane outer cover layer is “the Holy Grail of golf technology,” such a construction was disclosed prior to the earliest filing dates of either the Sullivan I or Sullivan II patents (see e.g., GB 2 248 067 A, e.g., claim 17 incorporating claim 6), and was not invented by Sullivan.

45.    Further, Acushnet’s parent company, Fortune Brands, Inc., told industry analysts in an earnings conference call on January 28, 2008 — a month after the jury found that the Sullivan patents infringed by Acushnet are not invalid — that Acushnet had a “very strong case” in part because “the golf ball [i.e., the Pro V1 line of golf balls] actually was out being sold before these [Sullivan] patents were issued.” This statement, by Acushnet’s parent, again falsely implied that Acushnet was the first to invent the “Holy Grail” golf ball with great distance and great control and that the Titleist Pro V1 is that ball, when Acushnet knows otherwise.
ANSWER: Acushnet admits that the Pro V1 golf ball was introduced in October of 2000, before any of the Sullivan I patents issued; otherwise denied.

46.    Moreover, since the injunction order against the Titleist Pro V1 line of golf balls was issued in November 2008, Acushnet has made additional misleading statements, including but not limited to its statement that “Titleist Pro V1® golf balls are the product of technology developed and accumulated by Acushnet over the past 20 years, and over 65 Acushnet Company patents are related to the Pro Vi® family.” This ignored Acushnet’s continued and willful infringement of Callaway Golf’s Sullivan I patents, and that it was those Callaway Golf patents that were key to Acushnet’s ability to manufacture and sell a ball that performed as well as competitive offerings from Callaway Golf and others.
ANSWER: Acushnet admits that its Titleist Pro VI golf balls are the product of technology developed and accumulated by Acushnet over the past 20 years. Acushnet further admits that over 65 Acushnet Company paten
ts are related to the Pro VI family. Acushnet denies the remaining allegations in paragraph 46.

47.    Acushnet has also made multiple public statements questioning the validity of the Sullivan I patents and the revolutionary technology taught therein. Acushnet’s public statements about the Sullivan I patents’ validity stand in contrast to the sworn testimony of its own witness that the idea of a 3-piece ball with a thin polyurethane cover was truly novel and inventive at the relevant time.
ANSWER: Acushnet admits that it has stated its belief that the Sullivan I patents are invalid, as supported by the United States Patent and Trademark Office, which has issued rejections of each and every claim of those patents; otherwise denied.

48.    At the December, 2007 trial, William Morgan, Acushnet’s Senior Vice President for Research and Development for golf balls, testified about his involvement in the Veneer project, Acushnet’s effort to create a a¬piece ball with a polyurethane cover. At the time of Acushnet’s Veneer project, Mr. Morgan had known of the use of thin polyurethane covers, such as cast thermoset polyurethane and was also aware of solid multi-layered balls. Yet, Mr. Morgan said that as of the Veneer project – which began after Mr. Sullivan’s work – Mr. Morgan had never heard of anyone making a solid multilayer ball with a thin polyurethane cover, and he agreed that such a ball was a new idea at the time.
ANSWER: Denied. Acushnet further answers that, by April 1995, years before the Sullivan I patents issued and months before their priority dates, Acushnet had already asked Ms. Wu to make several golf balls having the basic construction of the Pro V1 – a solid center, hard ionomer cover, and Wu’s thin castable polyurethane outer cover. Mr. Sullivan never made a golf ball with this basic Pro V1 construction.

49.    In fact, Mr. Morgan thought a 3-piece ball with a thin polyurethane cover was such a novel development that he submitted an invention record for the idea in April of 1996, along with fellow golf ball designers Dean Snell and Ed Hebert. Acushnet believed so strongly that this idea was inventive that the company filed a patent application based on that invention disclosure, eventually resulting in U.S. Patent No. 5,885,172.
ANSWER: Acushnet admits that it filed a patent application that eventually resulted in U.S. Patent Number 5,885,172. Acushnet denies the remaining allegations in paragraph 49.

50.    Acushnet only changed its tune years later, when it learned that Mr. Sullivan, and not Acushnet’s developers, was the first and true inventor of this revolutionary approach to golf ball design. Acushnet now issues frequent public statements attacking the validity of the technology that previously Acushnet swore was new and patentable.
ANSWER: Denied.

51.    Acushnet has intentionally and willfully misled golf professionals, golf shops, golf consumers and the public at large regarding the origin of the technology responsible for the success of its Pro V1. It has willfully made statements that fail to disclose that the most significant performance improvement of its Titleist Pro V1 golf balls – the combination of great distance and durability combined with great control which is enabled by the breakthrough construction of a thin, soft polyurethane cover used as part of a solid-core multi-layer ball –is claimed and covered by valid Callaway Golf patents. Instead, Acushnet has continued to state that it is the “industry leader” in golf ball design, despite its deliberate infringement of Callaway Golf patents, including the Sullivan I patents.
ANSWER: Denied.

52.    On information and belief, Acushnet’s ability to retain the golf professionals as users and promoters of its Titleist branded golf balls, through the release of the infringing Titleist Pro V1, has supported the sales and success of Titleist’s golf products generally, including its other golf ball products, as a result of the “pyramid of influence.”
ANSWER: Denied.

53.    Even before the Court issued its permanent injunction, Acushnet modified the composition of its commercially successful Pro VI and Pro VI x lines of golf balls to prepare for issuance of an injunction by the Court. Specifically, Acushnet modified the 2007 Pro VI line of golf balls. Acushnet refers to these modified golf balls as “converted” golf balls.
ANSWER: Acushnet admits that it changed the composition of its 2007 Pro V1 and Pro Vlx lines of golf balls and that Acushnet refers to these modified 2007 golf balls as being “converted.” Acushnet denies the remaining allegations in paragraph 53.

54.    Although it changed the composition of its 2007 Pro VI line of golf balls, Acushnet continued to make and sell golf balls under the Titleist Pro V1 and Pro V lx model names without changing the side stamp identification of the golf balls, calling them the best selling golf balls of all time and “The #1 Ball in Golf.” Yet, the changed formulation was different from what had been historically sold as a Pro V1 golf ball. It was the prior, infringing, versions of Pro VI golf balls that had achieved success historically, not the “converted” Pro V1 golf balls.
ANSWER: Denied.

55.    Acushnet has represented, to the public and this Court, that its converted 2007 and new 2009 lines of Pro V1 golf balls do not infringe Callaway Golf’s patents.
ANSWER: Acushnet admits that it has represented that its converted 2007 and new 2009 lines of Pro VI golf balls do not infringe any valid claim of Callaway Golf’s patents.

56.    Like its launch of the original infringing Pro V1 in 2000, Acushnet has persuaded professional golfers to adopt the 2009 version of the Pro V1 and Pro V lx golf balls, proclaiming that Titleist is again “#1 from the start” based on use of its Pro V1 golf balls on the PGA Tour in 2009. Callaway Golf, however, has determined that both the “converted” 2007 line of Pro V1 golf balls and the new 2009 golf balls infringe the Sullivan II patents.
ANSWER: Denied.
 
57.    Acushnet has sold converted 2007 Titleist Pro V1 and Pro Vlx balls and is currently marketing, making, and selling 2009 versions of the Titleist Pro VI and Pro Vlx balls.
ANSWER: Acushnet admits the allegations in paragraph 57.

Interesting stuff, and nothing held back. Acushnet admits that it has sold nearly $2 billion worth of Pro V1 balls! That equates to selling almost $450 worth of Pro V1 balls every minute of every day for the past 8.5 years! Simply amazing.