But Acushnet Co., maker of Titleist golf balls, doesnt expect the supply of Pro V1s to dry up.
We strongly disagree with the judges ruling and will file an appeal and seek relief from the injunction, said Joe Nauman, executive vice president, corporate and legal of Acushnet, in a prepared statement. However, its important to recognize that this ruling will not have any impact on our ability to supply our customers with Pro V1 golf balls because of the following actions which we have undertaken. In September 2008, we converted production of the existing Pro V1 models so that they are outside of the patents in question, and we have also developed and will be introducing new and improved Titleist Pro V1 products in the first quarter of 2009 that are also outside the scope of the patents in question.
Nonetheless, the opinion of Judge Sue L. Robinson of the federal District Court in Delaware, mandates the following:
[T]he court finds that [Callaway] has made a sufficient showing on each of the four traditional factors [necessary to prove to win a permanent injunction]. A permanent injunction shall issue by separate order. The court will enjoin the production and sale of Pro V1 products commencing January 1, 2009.
The case, Callaway Golf Co. v. Acushnet Co., filed in 2006, arose from Callaways contention that Titleists Pro V1 balls infringed on a number of golf ball patents. After a December 2007 trial, the jury found all but one of Callaways patent claims to be valid.
Callaway owns the patents through its ownership of the Spalding family of golf brands. Spalding filed for the patents in 1999 and 2001; they were granted in 2001 and 2003. The inventor of the patents, Michael J. Sullivan, has worked for Acushnet since 2000.
It is unusual for any court to grant relief as drastic as a permanent injunction ordering a stop to commercial activity. But such an order can be won if an aggrieved party shows 1) irreparable injury, 2) that more traditional legal remedies (such as monetary damages) will not compensate for the injury, 3) that a balance of hardships between plaintiff and defendant make the case a good one for granting an injunction, and 4) that granting such relief would not impinge on any public interest. In patent cases, permanent injunctions used to be easier to get. But a 2005 Supreme Court case determined that obtaining injunctive relief in patent cases should be no different than in other types of cases.
Still, it is unlikely that Pro V1s will disappear from the shelves any time soon. As part of its appeal, Acushnet is likely to file motions suspending the operation of the injunction pending the outcome of the appeal, as most appealing parties do. (Acushnet representatives would not comment on the case beyond the statement mentioned above.)
Even though it has won injunctive relief, Callaway will also be seeking monetary damages. Those could amount to $100 million, said a source close to the situation who asked not to be indentified.
Through September, the month for which the latest figures are available, Titleist owned about 53 percent of the U.S. golf ball market, measured in dollar sales. Callaways market share to the same point this year was about 11 percent. The two companies have the only double-digit shares in the U.S. market.