Details are just starting to roll in, but we’ve got a breaking lead on a lawsuit being filed by Bridgestone against Acushnet (Titleist) in the United States for patent infringement. Bridgestone is the leading ball manufacturer in Japan and, by a wide margin, Titleist is the leader in the United States.
Commentary follows the statements of each company in the extended entry.
Bridgestone’s Release
BRIDGESTONE SPORTS INITIATES PATENT INFRINGEMENT ACTION AGAINST THE ACUSHNET COMPANY
Titleist’s Leading Golf Balls Allegedly Infringe Upon Several Bridgestone-owned U.S. Patents
Covington, GA, – On March 7, 2005, Bridgestone Sports Co., Ltd., and its wholly owned subsidiary, Bridgestone Golf, Inc., filed a patent infringement lawsuit against the Acushnet Company in the United States District Court for the District of Delaware. Bridgestone Sports is currently the leading golf ball manufacturer in Japan with a 40% share of that market, and Acushnet remains the leader in the U.S. golf ball market.
In the complaint, Bridgestone Sports charges Acushnet with willful infringement of ten United States patents from Bridgestone Sports’ extensive patent portfolio covering multi-piece solid core golf ball technology. Among the Acushnet balls charged with infringement are: Titleist® Pro V1™, the Titleist® Pro V1x™, the Titleist® NXT™, Titleist® NXT Tour, the Titleist® DT SoLo, and the Pinnacle® Exception™ golf balls.
Bridgestone Sports is seeking an injunction against Acushnet from infringing upon the company’s patents and for unspecified compensation for damages that have occurred as a result of past infringement. In addition, Bridgestone Sports seeks a declaratory judgment of non-infringement with respect to four United States patents owned by Acushnet.
“During the course of several months of negotiations with Acushnet, we attempted to settle this dispute; however, when negotiations failed, Acushnet left us with no other course of action, but to file suit,” said Mr. Kawano, President, Bridgestone Sports Co., Ltd. “We remain hopeful that this matter can be settled, but in the meantime, we must protect our intellectual property rights. We will do so passionately and we are committed to see this matter to the end, in order to properly remedy the infringement.”
Bridgestone Sports, together with its U.S. subsidiary, Bridgestone Golf, Inc., located in Covington, Georgia, develops, manufactures and sells premium golf products, including Bridgestone Golf™, Precept® and TourStage® golf balls. Bridgestone is represented on a world stage by a number of internationally famed golfers including, Stuart Appleby, Shigeki Maruyama and Nick Price. Bridgestone Golf, Inc. is a wholly owned subsidiary of Bridgestone Sports Co. Ltd., whose headquarters are in Tokyo. For more information visit http://www.bridgestonegolf.com.
Titleist’s Release
ACUSHNET COMPANY RESPONDS TO PATENT INFRINGEMENT ALLEGATIONS BY BRIDGESTONE SPORTS
Fairhaven, MA (March 7, 2005) – Acushnet Company, manufacturer of Titleist® and Pinnacle® brand golf balls, strongly denies allegations by Bridgestone Sports included in a press release and filed in a complaint today.
The Acushnet Company is disappointed that Bridgestone Sports and its subsidiary Bridgestone Golf have chosen to attempt to compete via press release and litigation. As the worldwide market leader in golf ball sales and in patenting new golf ball technology, Acushnet takes intellectual property matters very seriously. As such, Acushnet respects the valid intellectual property of all its competitors and expects the same in return.
“We have been discussing patent issues with Bridgestone for well over a year,” said Joseph Nauman, Senior Vice President and General Counsel, Acushnet Company. “We had hoped to amicably resolve these issues and had recently provided Bridgestone with further information in support of our position. However, rather than address that information in private dialogue, Bridgestone has chosen to make this matter public and to litigate.”
“We believe Bridgestone infringes the Acushnet patents cited in its complaint and strongly deny that Acushnet infringes any valid Bridgestone patent. Acushnet will vigorously defend itself in this action and will fully pursue the protection of its intellectual property.”
Titleist, FootJoy and Cobra comprise the major golf brands of the Acushnet Company, an operating company of Fortune Brands, Inc. (NYSE – FO). Titleist, Cobra, FootJoy and Pinnacle are trademarks owned by Acushnet Company. All other trademarks are property of their respective owners.
Commentary
The below, it should be made clear, is speculation and commentary. Please regard it in the fashion in which it is intended: as an opinion, albeit a seasoned one. It is not fact.
Companies sue other companies for patent infringement every so often, in the golf industry and every other industry. This lawsuit, given Titleist’s role as top dog, has the potential to become a very, very big story, but at this time it’s merely the logical result of negotiations gone sour.
As The Sand Trap has previously mentioned, patents are the crown jewels of each golf ball kingdom. The more patents a company holds on golf ball technology – from dimple patterns to cover and core composition – the more restricted their competitors are in developing competing products and innovating new technologies.
The patent territory in question here relates to the core of a golf ball, or as Bridgestone says, “multi-piece solid core golf ball technology.” Bridgestone has decided that Titleist has infringed on these patents either from Titleist marketing claims or by simply cutting open a few balls and performing basic tests or speculating on the production process.
That there were negotiations is only mildly interesting: if Titleist felt as though they were clearly in the right, it seems unlikely that negotiations would have taken place, especially for as long as they did: “well over a year” according to Titleist’s statement.
Negotiations themselves, however, occur more than you might suspect in the golf ball industry. Callaway has had golf balls that had similar technologies to those patented by Titleist patents, and Callaway simply licensed the Titleist patents rather than fight the similarity in court or redesign the balls. Bridgestone may be looking for a similar arrangement from Titleist, and it’s possible that negotations broke down because Bridgestone wanted more than Titleist was willing to pay.
The odds that this will go to trial are small. Bridgestone is seeking publicity as leverage for an out-of-court settlement. Titleist seemingly believes that Bridgestone has a pretty good case or they would not have negotiated for quite so long. The sticking point is likely to be the total dollar figure.
One point to consider: does the patent infringement relate to older model balls, or does it cover the new Titleist balls (announced and released within the past month)? Titleist is very, very protective of their turf in the golf ball market, and it’s highly unlikely that they would be so careless as to willfully disregard a group of patents so all-encompassing that they are used in six different golf ball models.
Our best guess? This will sit for several months. Bridgestone will settle for whatever Titleist is offering. In the meantime, they’ll sling some mud and do what they can to sell more B330s. Their sales reps will practice saying “You know, Titleist stole all our technology for the Pro V1…” as casually as possible. In six months, Bridgestone and Titleist will issue a joint press release saying that the issue has been resolved and that the terms of the settlement are private.
This becomes a “big story” only if:
- Bridgestone really pushes things or
- Titleist is forced by a court to pay money or alter its product. In other words, if it goes to court and Titleist loses.
Many thanks to the author of Staying Power, Donald MacKenzie, for his contributions to this story.
2 and a half years later, your analysis was dead on.