I write on behalf of Callaway Golf to clarify the description in Acushnet’s March 15, 2011, letter and to further advise the Court of developments in the Patent Office proceedings and related litigation of which the Court may wish to be aware.

First, on March 9, 2011, the Patent Office denied Callaway Golf’s petition requesting that the agency: (i) recognize this Court’s ruling that Acushnet breached its contract in pursuing the reexaminations; and (ii) cease the reexaminations and allow the validity of the patents to be addressed on a full record in the appropriate forum – here, in District Court. Exhibit A.

Second, also on March 9, 2011, the Patent Office Board of Appeals affirmed the
examiner’s rejection of the claims in the four Sullivan patents at issue in this case. Exhibit B. In doing so, however, the Patent Office did not adopt or approve any rejection based upon anticipation. Its decision rests solely on one obviousness combination: Nesbitt and Molitor ‘637. Callaway Golf is seeking a rehearing and, if necessary, will appeal the Board’s determination to the Federal Circuit due to a number of errors, including the Board’s summary dismissal of the objective evidence of non-obviousness and its reliance upon the hindsight-induced declaration of Dr. MacKnight – the same “evidence” this Court excluded, noting, inter alia, “it was the lawyers who created this whole process.” D.I. 427 (Tr. 755:6-7).

Given these decisions by the Patent Office, Acushnet is winning the “race” to have the Sullivan patents’ validity adjudicated by reexaminations initiated in breach of contract rather than here in this court. In its continuing effort to halt the improper reexaminations, Callaway Golf yesterday filed an Administrative Procedure Act suit in the Eastern District of Virginia. That suit seeks expedited review of the Patent Office’s refusal to vacate the reexaminations filed in breach of a valid, court-ordered settlement agreement. The complaint also challenges the PTO’s refusal to stay proceedings before it in light of the fact that the validity of the same patents is properly being addressed in this Court. Exhibit C.