By now you are probably wondering why Acushnet is not out of the woods yet. Good question. Last month Callaway filed a motion explaining:

Callaway Golf moves pursuant to Fed. R. Civ. P. 60(b)(6), or in the alternative pursuant to Fed. R. Civ. P. 60(b)(5), to vacate this Court’s November 10, 2008 Order (D.I. 491). The Court’s November 10, 2008 Order vacated the November 20, 2007 Order granting summary judgment (D.I. 347), after concluding the Court lacked jurisdiction. Previously, the Parties submitted a joint motion under Rule 60 to address that jurisdictional issue. Now that the jurisdictional roadblock has been removed, Callaway Golf submits this second Rule 60 motion and respectfully urges that the Court vacate its November 10, 2008 jurisdictional Order, and reinstate its November 20, 2007 Order which granted summary judgment to Callaway Golf on its breach of contract claim against Acushnet.

Callaway Golf intends to present the summary judgment regarding Acushnet’s breach of contract to the Patent Office and request that it suspend or terminate the pending reexaminations filed by Acushnet in breach of its contract. Callaway Golf seeks action now, because the “race” between this litigation and Acushnet’s improper reexaminations is growing much closer due in part to increased activity at the appellate level of the Board of Patent Appeals and Interferences. Acushnet does not dispute the merits of this motion – indeed, it previously agreed to submit this second Rule 60 motion jointly with Callaway Golf. When approached to submit this motion now, however, Acushnet informed Callaway Golf that it prefers to delay the reinstatement of the summary judgment until after Callaway Golf’s motion for a new trial is decided. Acushnet’s requested delay will aid its effort to win the “race” it has set up by filing inter partes patent reexamination requests in breach of its Agreement with Callaway Golf. Accordingly, Callaway Golf respectfully requests that the Court grant this motion now rather than heed Acushnet’s call for further delay.

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In February 2006, Callaway Golf filed the instant lawsuit. Callaway Golf later amended its complaint to allege that Acushnet breached the Settlement Agreement by filing inter partes requests for reexamination of Callaway Golf’s patents-in-suit. (D.I. 30.) This Court considered competing summary judgment motions on Callaway Golf’s contract claim, and granted Callaway Golf’s motion, holding that Acushnet breached the Settlement Agreement. D.I. 347 (November 20, 2007 Order).

After the first trial on the validity of the patents-in-suit, this Court: (i) issued a separate decision holding that it lacked subject matter jurisdiction to resolve Callaway Golf’s breach of contract claim; (ii) vacated its November 20, 2007 decision; and (iii) dismissed Callaway Golf’s breach of contract claim. See D.I. 490 (November 10, 2008 Order).

This Court’s November 2008 decision to vacate its November 2007 decision stated that there was a universal intention for the court to retain jurisdiction over the performance of the Agreement. See D.I. 490 (November 10, 2008 Order) at 11. The Court concluded, however, that there was no affirmative demonstration of the Court’s intent in the record of the 1996 cases in order to effect the retention of jurisdiction for future proceedings under the Settlement Agreement….

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After this Court granted the Parties’ Joint Rule 60(b)(6) – thus addressing the jurisdictional issue that had led to the dismissal of Callaway Golf’s breach of contract claim – the Federal Circuit ultimately disposed of the appeal by remanding the case to this Court. The Parties then focused on preparing and conducting a second trial on the merits of Callaway Golf’s patent claims. A jury trial was held before this Court commencing March 22, 2010. The jury returned a verdict on March 29, 2010 finding Callaway Golf’s asserted patent claims invalid as anticipated and obvious. (D.I. 607.) This Court entered judgment on the jury’s verdict on March 31, 2010. (D.I. 611.) The Parties filed post-trial motions, including a motion by Callaway Golf for a new trial. (D.I. 616.) Briefing by the parties on those motions was completed on June 15, 2010, and is currently pending.

In the interim, the reexaminations filed by Acushnet in breach of contract have continued to make their way through the Patent Office. Now, nearly 5 years after they were wrongfully started by Acushnet in January of 2006, the reexaminations are pending before the Board of Patent Appeals and Interferences, which is the last stop in the Patent Office. And the Board has apparently begun to speed up its appellate review of inter partes reexaminations.1 Given this set of circumstances, Acushnet’s reexaminations may possibly win the “race” a particularly unfair result given that the petitions were filed in breach of its agreement. The risk of an unfair result is especially acute if Callaway Golf’s pending request for a new trial is granted, which of course Callaway Golf respectfully believes it should be. To ensure that this matter is resolved in the proper forum and that the extensive resources devoted to this case by the Court and the Parties will not have been spent in vain, Callaway Golf wishes to advise the Board of the Court’s summary judgment ruling regarding Acushnet’s reexaminations having been filed in breach of contract, and request that the Board terminate the reexaminations, or at least suspend them until this matter is resolved in court.

Accordingly, Callaway Golf requests relief here under Fed. R. Civ. P. 60(b)(6), or, in the alternative, under Fed. R. Civ. P. 60(b)(5). This Court’s July 30, 2009 Orders have resolved the jurisdictional issue identified by the Court in its November 10, 2008 Order and established that the Court has retained jurisdiction to enforce the settlement of the 1996 cases. Thus, Callaway Golf submits this request to vacate the November 10, 2008 jurisdictional Order dismissing Callaway Golf’s breach of contract claim. By vacating its November 10, 2008 Order, the Court can reinstate its November 20, 2007 Order, which granted summary judgment to Callaway Golf on its claim for breach of contract. To avoid any doubt on the question, Callaway Golf’s proposed Order affirmatively states that, in granting this motion, the November 20, 2007 Order is in fact reinstated.

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Given that the instant Rule 60 motion was part of the original approach outlined by the Chancery Court and ultimately agreed-upon by the Parties, this Motion is ready for consideration by the Court. Callaway Golf has asked Acushnet to join in the submission of this second Rule 60 motion but Acushnet has refused– offering instead to do so at a later point in time. See, Ex. A. Acushnet’s refusal to join in this Motion is inconsistent with the Parties’ prior agreement presented to this Court:

[F]ollowing completion of the current appeal, and depending on how that appeal is decided, the Parties will submit a second joint motion to rehear in summary fashion Callaway Golf’ s breach of contract claim summary judgment motion, thus allowing this Court to reissue its original grant of summary judgment in Callaway Golf’ s favor on that claim.

C.A. No. 09-73, D.I. 81 at 6 (emphasis added). The appeal that was pending at the time of the Parties’ Joint Rule 60 motion has been decided, so according to the terms of the agreement the instant Motion is now ripe.

In addition, as explained above, the reexaminations that this Court found Acushnet filed in breach of its contract are proceeding, have begun to move more quickly toward resolution, and threaten to win the “race” with the instant litigation that Acushnet has set up. Acushnet has not identified any substantive basis for opposing this motion, but instead seeks to delay its consideration until a later point in time. Such delay, however, heightens the risk that Acushnet’s reexaminations will be completed before the Patent Office is made aware that they were filed by Acushnet in breach of the Parties’ Settlement Agreement. Acushnet should not be permitted to drag its feet so that it can further benefit from its breach. This issue is ripe for decision now.

OK, that is Callaway’s take on the situation, so let’s know take a look at Acushnet’s response…

Callaway's Rule 60 motion to vacate the Court's dismissal of Callaway's contract claim is untimely. According to Callaway, the Parties' agreement contemplated filing the present Rule 60 motion after completion of the first appeal. Yet Callaway delayed over a year after the Federal Circuit remanded the case before seeking to file the present motion, after patent liability and damages had been tried to a second jury. Callaway's delay reveals its true intention - to circumvent the Parties' stipulation that contract damages would be tried along with patent damages. In light of Callaway's lengthy and unexplained tactical delay, its suggestion that Acushnet is trying to delay resolution of the contract claim strains credibility.

The Parties agreed in their joint June 29. 2009 motion (C.A. No. 1:96-cv-78-SLR, D.I. 38) that they would file a joint motion to vacate at a time that would allow patent damages and contract damages to be tried together. That time has passed; the trial on patent damages occurred in March of 2010. The Court should not allow Callaway to tactically delay filing this motion so it can circumvent the stipulation of the Parties.

Callaway argues that it needs the breach of contract summary judgment order reinstated to persuade the PTO to stop the reexaminations of the patents-in-suit. Callaway never articulated that reason when Acushnet questioned the timing of this motion before it was filed. In any event, Callaway's stated basis for filing the Rule 60 motion is futile. When Callaway first asked the PTO to stay or terminate the reexaminations of the patents-in-suit, the PTO concluded that even if Acushnet had breached the 1996 Agreement, the PTO would not stop the reexaminations of Callaway's patents. Thus, even if the summary judgment ruling is reinstated, the PTO has determined that it has not exceeded its statutory authority and will not stay or terminate reexamination. Indeed, if Callaway believed that the PTO would stop the reexaminations, one would have expected Callaway to petition the PTO after the summary judgment was granted in November 2007. It was almost an entire year before the summary judgment order was vacated in November 2008, so there was sufficient opportunity. Moreover, there is no explanation for Callaway's delay in filing the present motion during the year after the Federal Circuit remanded the case in 2009. Callaway's failure to do so casts doubt on its intentions with the present motion.

Callaway's motion should be denied until after post trial motions are decided and after the Federal Circuit has addressed any appeals from the patent case. Indeed, it is Acushnet's view that the intention of the Parties' agreement in 2009 was that the Parties would not seek to reinstate the contract claim until after resolution by the Federal Circuit of all patent liability issues, which has not yet occurred. However, in the interests of efficiency, if the Court grants Callaway's motion for a new trial (which Acushnet believes should be denied), Acushnet would not object to the present motion at that time.

And of course, Callaway had the last word in their reply:

Callaway Golf seeks to have this motion granted so that the PTO can be advised of Acushnet’s breach of contract and then take this fact into account in assessing whether to stay or perhaps terminate the on-going reexaminations. Granting this motion is even more critical now, given that after filing its Rule 60 motion Callaway Golf just received notice that the PTO has set January 19, 2011 for argument before the Board on the reexaminations. Acushnet concedes it has no basis on the merits for opposing Callaway Golf’s motion. This is not surprising, given Acushnet previously agreed this request would be filed as a joint motion. (See Opp. at 3.)

Acushnet disputes only the timing of this motion, arguing that it comes both too soon and too late. None of Acushnet’s arguments for delaying this motion has merit, especially in light of the recent and dramatic advancement of the reexamination proceedings. They are merely an effort to allow Acushnet to continue benefiting from its breach.

Callaway even included a nice chart summarizing things:

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Stripped of rhetoric, Acushnet’s position is the same that it has maintained from the beginning of this dispute: to continue benefiting from its breach of contract by having the PTO, rather than this Court, determine validity, despite the Parties’ 1996 Agreement that future patent disputes would be decided by this Court. Acushnet’s efforts to postpone re-entry of summary judgment serve only to increase the likelihood that this matter will not be resolved in the proper forum, and that the substantial resources devoted to this case by the Court, the Federal Circuit, and the Parties will have been spent in vain.

It should be an interesting couple of months!

Dave Dawsey   - The IP Golf Guy