Clark Collins and Patrick Riley filed suit last week. They contend Callaway and its subsidiary company, Odyssey, breached a contract, violated confidentiality agreements and misrepresented themselves during negotiations.
Calls to Callaway on Monday were not immediately returned.
The two-ball putter is becoming more popular and is used by golfers who want help their alignment on the greens. Many of these golfers believe club design helps them visualize the path of their putts.
Among those who use the two-ball putter are Annika Sorenstam and Jack Nicklaus. Sorenstam has won 15 of 28 tournaments since switching to the two-ball putter, including 13 wins in the 2002 season.
Collins won the 1995 South Florida PGA Open for Seniors, using a variation of the two-ball design. That same year, officials from Callaway and Odyssey misrepresented themselves and stole trade secrets while negotiating with Collins and Riley, the suit contends.