I. NATURE AND STAGE OF THE PROCEEDINGS

Acushnet stayed silent when the first jury returned a partially inconsistent verdict, instead of joining Callaway Golf's effort to help the Court remedy the situation. That strategic decision has, for the moment, paid off. Without the hook of the inconsistent verdict—on one claim of nine—Acushnet would not have gotten a second trial on obviousness, because the Federal Circuit otherwise affirmed the first jury's rejection of that defense. Acushnet took full advantage of its second chance, this time with a retooled strategy. As its counsel told the press, the first trial "made it easier to prepare and told me what issues we needed to pre-empt and what weaknesses to focus on." (Halkowski Decl., Ex. A.) This time, Acushnet decided to avoid the "traditional technical approach to the case" that led to its initial defeat. (Id.) Acushnet executed this strategy by urging and capitalizing on a number of errors that allowed it to spin a story touting its other "patented" technology, while never confronting its own Hebert/Morgan patents, which (a) covered the Sullivan technology but were filed two years after Sullivan's patents, (b) were deemed novel and non-obvious by Acushnet itself and the PTO despite the very prior art Acushnet now relies upon, and (c) were used to extract a significant royalty from Callaway Golf. As a result, Acushnet presented a distorted and unbalanced picture to the jury and obtained a verdict against the great weight of the evidence. The anticipation verdict, which lacks any factual support, leaves little doubt that Acushnet's exploitation of the Court's rulings enticed the jury to decide the case on a basis other than the evidence.

While respectfully requesting a new trial on anticipation and obviousness, Callaway Golf is very mindful of the burden that would fall upon the Court and a new jury from an Order granting a new trial. Nonetheless, the Court should not permit the manifest injustice that would result from allowing Acushnet to use its studied silence after the first trial, and its exploitation of evidentiary rulings in this one, to present a view of the facts divorced from reality.

II. SUMMARY OF THE ARGUMENT

1.    Callaway Golf respectfully requests a new trial on the basis of seven prejudicial evidentiary and legal errors triggered and exploited by Acushnet, all but one of which were absent from the first trial. Each error, either alone or when combined with the others, warrants the Court exercising its broad discretion to grant a new trial on all issues.

2.    Callaway Golf also respectfully requests a new trial because the verdict was against the great weight of the evidence and would result in a manifest injustice. The anticipation verdict was critically deficient in at least three respects, and the jury's finding of anticipation necessarily infected its finding of obviousness.
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The prejudicial effect of this slanted view of the value of Sullivan's technology was enormous. Acushnet repeatedly disparaged the Sullivan patents because they allegedly do not discuss other technology incorporated into the ProV1. According to Acushnet, "[t]he patents don't give you the five things you really need to know in order to make these products. Are they truly innovative?" (Tr. at 1419:12-14, 1411:5-8 (closing); 198:11-16 (opening); 327:12-24 (Morgan); 615:21-617:24 (Statz).) Acushnet leveraged this testimony and argument by having Mr. Morgan agree that the distance and feel characteristics of the ProV1 "have nothing to do" with the Sullivan patents. (Tr. at 321:19-24, 322:11-13.) And it delivered the punch-line in closing, with an improper and thinly veiled reference to injunctive relief, inviting the jury to invalidate the patents so Acushnet could continue making the ProV1: "That's our invention, and we ought to be able to use it. Okay? That's our invention." (Tr. at 1411:1-2.) Indeed, following a deposition excerpt from Mr. Hebert, Acushnet counsel's last words to the jury were: "We did that, not them. We did that. The people at Acushnet, the 2,000-plus employees at Acushnet, they deserve your support." (Tr. at 1474:15-17.) Mr. Hebert's deposition testimony, and counsel's argument following it, would have looked quite different to the jury had it known that Mr. Hebert obtained patents on nearly the same technology as Sullivan—two years after Sullivan—and that Acushnet had proudly recognized those patents' contribution to the Pro V1 by directly linking them to the ProVl's "progressive performance."

This Court also knows that Acushnet not only received the patents, it forced Callaway Golf to license them for $10.5 million at the very inception of its entry into the golf ball business. Although the Hebert license was admitted, it was of no use without the patents to explain it. The net result was that Acushnet argued Callaway Golf bought the Sullivan patents at a fire-sale price and set about harassing Acushnet rather than competing in the marketplace. (Tr. at 1467:17¬1468:6.) In fact, Acushnet first approached Callaway Golf, with patents on essentially the same technology. The jury was entitled to hear the whole story on this issue.

Fourth, the importance of the Hebert patents was further increased after Acushnet's damages expert volunteered on the last day of trial that Acushnet believed the patents were invalid due to its "lawyers' opinions." (Tr. at 1332:5-10.) Mr. Nauman subsequently testified that Acushnet believed the patents were invalid based on those opinions. (Tr. at 1374:23¬1377:13.) The propriety of permitting testimony on the opinions is discussed separately below. But when that testimony was coupled with the exclusion of the Hebert patents, it created the misleading impression that Acushnet never believed the Sullivan concept was patentable, when Acushnet's own golf ball developers—including Messrs. Hebert and Morgan—obtained two patents on nearly the same thing after Mr. Sullivan. The opinion testimony would have looked quite different had the jury known that (1) Mr. Nauman's own department reviewed and approved the Hebert/Morgan invention disclosure, (2) Acushnet sought and received patents based on it, while aware of the same prior art used in the opinions, and (3) Mr. Nauman extracted a license for those patents. Likewise, the exclusion of the Hebert patents permitted Mr. Dalton to claim he immediately thought the Sullivan patents were invalid when he saw them. (Tr. at 427:13-428:5.) This left the jury with the erroneous view that all Acushnet's designers thought the Sullivan concept was unpatentable when, in fact, exactly the opposite was true.

Fifth, the Hebert patents were necessary to correct misimpressions regarding the ProV1 invention story. Acushnet led Mr. Morgan through the invention disclosure form that led to the Hebert patents, (Tr. at 282:23-283:6), but Callaway Golf could not cross-examine him regarding whether the invention disclosure led to a patent. (Tr. at 350:7-13.) As a result, the jury was left with the mistaken and unfairly prejudicial inference that Acushnet (or the PTO) concluded the idea was unpatentable and never followed through by filing a patent application. This would be a natural inference for this jury because it heard Acushnet tout its other "patented" technologies, while describing its invalidity opinions for the Sullivan patents.4 In addition, the Hebert patents would have undermined Acushnet's argument that Dr. Wu and Mr. Harris invented the ProV1 in 1995, before Sullivan. (Tr. at 280:23-283:6 (Morgan); 176:14-21 (opening); 1406:17-25, 1472:8-15 (closing); DX-830; Halkowski Decl., Ex. B.) The Hebert patents establish the ProV1 concept was developed separately from any earlier alleged work because they do not name either Dr. Wu or Mr. Harris as inventors.

Sixth, because the PTO separately issued Acushnet patents on the very same concept, the Hebert patents would have rebutted Acushnet's claim that an overworked or incompetent examiner granted the Sullivan patents by mistake.