On June 8, 2007 Callaway filed a golf club patent infringement lawsuit alleging that Acushnet has willfully infringed 5 Callaway patents.

The complaint alleges that the King Cobra 454 Comp, King Cobra F Speed, King Cobra HS9 F Speed, King Cobra HS9 M Speed, King Cobra LD F Speed, Titleist 905R, Titleist 905S, and Titleist 905T clubs infringe one, or more, of the Callaway patents.

The Callaway patents that are allegedly infringed include USPN 6348015, USPN 6478692, USPN 6669579, USPN 6685576, and USPN 6949032. All five of the patents are titled “Golf Club Head Having a Striking Face with Improved Impact Efficiency.” Majority of the claims of these patents are directed to the natural frequency of the club head’s striking face. Very interesting reading (all the patents are related so you can read one and get the idea behind all five of the patents).

It will be interesting to see how this one plays out.

David Dawsey - Monitoring Litigation in the Golf Industry

PS – There is no love lost between these two golf industry giants… just see my prior post regarding their pending golf ball patent infringement lawsuit.

PPS – The following is the body of the Complaint. Please bear in mind that an automated program was used to convert a manually scanned PDF of the Complaint into editable text, so there may be minor conversion errors.

For its Complaint, Callaway Golf alleges:

PARTIES

1. Plaintiff Callaway Golf Company ("Callaway Golf') is a corporation organized and existing under the laws of the State of Delaware, having a principal place of business in Carlsbad, California.

2. Defendant Acushnet Company ("Acushnet"), upon information and belief, is a corporation organized and existing under the laws of the State of Delaware, having a principal place of business in Fairhaven, Massachusetts.

3. Acushnet, upon information and belief, is a wholly-owned operating company of Fortune Brands, Inc. ("Fortune Brands").

4. Fortune Brands, upon information and belief, is a publicly-traded corporation organized and existing under the laws of the State of Delaware.

JURISDICTION AND VENUE

5. This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a).

6. Acushnet is subject to personal jurisdiction in this District because, upon information and belief, Acushnet is a Delaware corporation and is doing and has done substantial business in this District, including business relating to the sale and distribution for sale of the infringing products as described below.

7. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1400(b).

BACKGROUND

Callaway Golf's Patents For Golf Club Heads Having A Striking Face With Improved Impact Efficiency

8. Dr. John B. Kosmatka, Professor of the Jacobs School of Engineering at the University of California, San Diego ("USCD"), has consulted with Callaway Golf on several aspects of golf club design. Dr. Kosmatka's consulting agreement with Callaway Golf complied with all of USCD's requirements for such a consulting agreement and provided that all inventions created during the consulting activities were to be assigned to Callaway Golf.

9. During his consulting activities for Callaway Golf, Dr. Kosmatka invented breakthrough technology relating to golf club construction, particularly the design of compliant golf club heads that permit more efficient impact between a golf ball and the golf club head, resulting in performance that had previously eluded the industry.

10. Dr. Kosmatka has been awarded several patents for his work on golf club design including U.S. Patent Nos. 6,348,015, 6,478,692, 6,669,579, 6,685,576, and 6,949,032 patents (collectively "the Kosmatka patents"). Pursuant to his consulting agreement, Dr. Kosmatka assigned his inventions and the resulting Kosmatka patents to Callaway Golf

11. Callaway Golf has had success selling golf clubs embodying the technology claimed in the Kosmatka patents.

12. Acushnet makes and sells golf clubs under the Titleist® and Cobra® brands, including drivers that embody one or more claims of each of the Kosmatka patents. The Acushnet clubs that infringe one or more of the Kosmatka patents include, but are not limited to, the King Cobra 454 Comp, King Cobra F Speed, King Cobra HS9 F Speed, King Cobra HS9 M Speed, and King Cobra LD F Speed, Titleist 905R, Titleist 905S, and Titleist 905T clubs.

Acushnet's Breach Of The 1996 Settlement Agreement

13. In 1996, Callaway Golf's predecessor-in-interest, Spalding World Wide Sports Inc., ("Spalding") sued Acushnet for patent infringement regarding two-piece golf ball technology. To resolve Spalding's claims of patent infringement and Acushnet's related unfair competition counter-claims, the parties entered into a settlement agreement on August 5, 1996. Among the terms and conditions of the settlement agreement is the requirement that the parties resolve any and all patent-related disputes exclusively via a lawsuit in this Court. Specifically, the parties agreed in relevant part that "[a]ny dispute arising out of or relating to patents . . . shall be resolved in accordance with the procedures specified in this Section, which shall be the sole and exclusive procedure for resolution of any disputes." The 1996 Settlement Agreement goes on to specify that after the parties undertake a multi-step, pre-lawsuit dispute resolution process, including mediation before Magistrate Judge Thynge, "either party may initiate legal proceedings, but only in the United States District Court for the District of Delaware, and no other. Said court retains jurisdiction of the parties for such purposes." The 1996 Settlement Agreement remains in effect today and this Court retains jurisdiction over any disputes "arising out of or relating to patents" between the parties.

14. In August 2004, Callaway Golf initiated the pre-lawsuit dispute resolution procedures mandated by the 1996 Settlement Agreement relative to a patent dispute over golf ball patents. Callaway Golf and Acushnet both acknowledged that Callaway Golf was obligated to follow the procedures in the 1996 Settlement Agreement as a successor to Spalding. Moreover, section 15 of the 1996 Settlement Agreement specifies that the 1996 Settlement Agreement "is binding upon the parties hereto . . . as well as their representatives, successors, transferees and assigns of substantially all of the their respective Golf Ball Businesses."

15. For approximately the next 18 months, the parties engaged in the pre-lawsuit dispute resolution procedure mandated by the 1996 Settlement Agreement with respect to the golf ball patent dispute. Specifically, Acushnet and Callaway Golf engaged in negotiations by and between senior executives in an attempt to resolve the dispute. In addition, as required by the settlement agreement, the parties participated in mediation with a third-party professional mediator, as well as several mediation sessions before Magistrate Judge Thynge of this Court.

16. On or about January 17, 2006, Acushnet breached the terms and conditions of the 1996 Settlement Agreement by filing four inter partes reexamination requests with the PTO for Callaway Golf's golf ball patents, numbers, 95/000120-123.

17. Callaway Golf filed suit in this Court on February 9, 2006, in accordance with the terms of the 1996 Settlement Agreement. In its complaint, Callaway Golf accused Acushnet of infringing the four golf ball patents.

18. On June 15, 2006, Callaway Golf moved to amend its complaint to add a claim for Acushnet's breach of the 1996 Settlement Agreement.

19. Acushnet opposed Callaway Golf's motion to amend. In its opposition, Acushnet argued that the 1996 Settlement Agreement "does not in any way purport to apply to disputes between Acushnet and non-parties to the Agreement, like Callaway." (Emphasis in original.) Acushnet also argued that the amendment should be denied because loin its face, the 1996 Agreement only applies to disputes between Acushnet and Spalding (the 'parties' to the agreement)." It therefore is Acushnet's present view that the 1996 Agreement does not apply to disputes, like this one, involving Acushnet and Callaway Golf.

20. On October 18, 2006, the Court granted Callaway Golf's motion to amend its complaint to add the affirmative claim for breach of the 1996 Settlement Agreement.

Acushnet's Breach Of The 1996 Settlment Agreement In Connection With This Dispute

21. On April 3, 2007, Callaway Golf brought this new dispute relating to the Titleist and Cobra brand golf clubs to Acushnet's attention and asked Acushnet to confirm its alleged belief that the 1996 Settlement Agreement did not relate to disputes between Acushnet and Callaway Golf.

22. Faced with this new dispute, Acushnet backed away from its previous argument that the 1996 Settlement Agreement did not apply to disputes between Acushnet and Callaway Golf. Rather, in letters dated April 9 and April 19, 2007, Acushnet stated that it needed to know the patents at issue in the new dispute in order to "evaluate" whether the 1996 Settlement Agreement applied to this new dispute over golf club patents. Acushnet's response was in direct conflict with the arguments it previously made regarding the scope of the 1996 Settlement Agreement. Moreover, Acushnet's prior refusal to confirm that that the 1996 Settlement Agreement's dispute resolution procedures applied to the golf ball dispute and refusal to be bound by those procedures was another breach of the 1996 Settlement Agreement.

23. Given Acushnet's breaches of the 1996 Settlement Agreement, Callaway Golf files this action in this Court which properly has jurisdiction over the dispute relating to the Kosmatka patents.

COUNT I - INFRINGEMENT OF THE '015 PATENT

24. Callaway Golf incorporates and realleges the allegations of paragraphs 1 through 23 as if fully set forth herein.

25. Callaway Golf is the owner by assignment of United States Patent No. 6,348,015,
entitled "Golf Club Head Having A Striking Face With Improved Impact Efficiency" ("the '015 patent"), which was duly and legally issued by the United States Patent and Trademark Office on February 19, 2002. A copy of the '015 patent is attached as Exhibit A to this Complaint.

26, Acushnet has infringed one or more claims of the '015 patent by making, using,
selling and/or offering to sell infringing golf clubs.

27. Acushnet has and has had constructive notice of the '015 patent pursuant to 35 U.S.C. § 287(a).

28. On information and belief, Acushnet monitors the issuance of all patents that relate to golf clubs and was therefore aware of the '015 patent on or about the day it issued, and Acushnet's continued manufacture and sale of the infringing clubs despite knowledge of the patent constitutes willful infringement.
 
COUNT II - INFRINGEMENT OF THE '692 PATENT

29. Callaway Golf incorporates and realleges the allegations of paragraphs 1 through 23 as if fully set forth herein.

30. Callaway Golf is the owner by assignment of United States Patent No. 6,478,692, entitled "Golf Club Head Having A Striking Face With Improved Impact Efficiency" ("the '692 patent"), which was duly and legally issued by the United States Patent and Trademark Office on November 12, 2002. A copy of the '692 patent is attached as Exhibit B to this Complaint.

31. Acushnet has infringed one or more claims of the '692 patent by making, using, selling and/or offering to sell infringing golf clubs.

32. Acushnet has and has had constructive notice of the '692 patent pursuant to 35 U.S.C. § 287(a).

33. On information and belief, Acushnet monitors the issuance of all patents that relate to golf clubs and was therefore aware of the '692 patent on or about the day it issued, and Acushnet's continued manufacture and sale of the infringing clubs despite knowledge of the patent constitutes willful infringement.

COUNT III - INFRINGEMENT OF THE '579 PATENT

34. Callaway Golf incorporates and realleges the allegations of paragraphs 1 through 23 as if fully set forth herein.

35. Callaway Golf is the owner by assignment of United States Patent No. 6,669,579, entitled "Golf Club Head Having A Striking Face With Improved Impact Efficiency" ("the '579 patent"), which was duly and legally issued by the United States Patent and Trademark Office on December 30, 2003. A copy of the '579 patent is attached as Exhibit C to this Complaint.

36. Acushnet has infringed one or more claims of the '579 patent by making, using, selling and/or offering to sell infringing golf clubs.

37. Acushnet has and has had constructive notice of the '579 patent pursuant to 35 U.S.C. § 287(a).

38. On information and belief, Acushnet monitors the issuance of all patents that relate to golf clubs and was therefore aware of the '579 patent on or about the day it issued, and Acushnet's continued manufacture and sale of the infringing clubs despite knowledge of the patent constitutes willful infringement.

COUNT IV - INFRINGEMENT OF THE '576 PATENT

39. Callaway Golf incorporates and realleges the allegations of paragraphs 1 through 23 as if fully set forth herein.

40. Callaway Golf is the owner by assignment of United States Patent No. 6,685,576, entitled "Golf Club Head Having A Striking Face With Improved Impact Efficiency" ("the '576 patent"), which was duly and legally issued by the United States Patent and Trademark Office on February 3, 2004. A copy of the '576 patent is attached as Exhibit D to this Complaint.

41. Acushnet has infringed one or more claims of the '576 patent by making, using, selling and/or offering to sell infringing golf clubs.

42. Acushnet has and has had constructive notice of the '576 patent pursuant to 35 U.S.C. § 287(a).

43. On information and belief, Acushnet monitors the issuance of all patents that
relate to golf clubs and was therefore aware of the '576 patent on or about the day it issued, and Acushnet's continued manufacture and sale of the infringing clubs despite knowledge of the patent constitutes willful infringement.

COUNT V - INFRINGEMENT OF THE '032 PATENT

44 Callaway Golf incorporates and realleges the allegations of paragraphs 1 through
23 as if fully set forth herein.

45. Callaway Golf is the owner by assignment of United States Patent No. 6,949,032, entitled "Golf Club Head Having S Striking Face With Improved Impact Efficiency" ("the '032 patent"), which was duly and legally issued by the United States Patent and Trademark Office on September 27, 2005. A copy of the '032 patent is attached as Exhibit E to this Complaint.

46. Acushnet has infringed one or more claims of the '032 patent by making, using, selling and/or offering to sell infringing golf clubs.

47. Acushnet has and has had constructive notice of the '032 patent pursuant to 35 U.S.C. § 287(a).

48. On information and belief, Acushnet monitors the issuance of all patents that relate to golf clubs and was therefore aware of the '032 patent on or about the day it issued, and Acushnet's continued manufacture and sale of the infringing clubs despite knowledge of the patent constitutes willful infringement.

PRAYER FOR RELIEF

WHEREFORE, Callaway Golf prays:

1. That this Court enjoin Acushnet, its agents and employees, and any others acting in concert with it, from infringing, inducing the infringement of, or contributing to the infringement of U.S. Patent Nos. 6,348,015, 6,478,692, 6,669,579, 6,685,576, and 6,949,032;

2. That this Court award Callaway Golf damages adequate to compensate for Acushnet 's infringement;

3. That this Court award Callaway Golf treble damages as a result of Acushnet's willful infringement;

4. That this Court declare this case an exceptional case pursuant to 35 U.S.C. § 285;

5. That this Court award Callaway Golf its costs and attorneys' fees and such other relief as is just and proper.

JURY DEMAND

Callaway Golf demands trial by jury on all issues so triable.