Fortune Brands Wins Patent Dispute – Analyst Blog

Fortune Brands Inc. (FO), a leading consumer brands company, has recently received a favorable verdict against Callaway Golf Co. (ELY) relating to a patent dispute involving Titleist Pro V1 golf balls, bringing to an end a long-standing legal battle spanning over four years.

 

In its legal suit, Callaway had alleged that Titleist Pro V1 golf balls infringed on four patent rights that were originally owned by Spalding, a sporting goods company, and subsequently bought by Callaway. However, the U.S. District Court for the District of Delaware corroborated with the U.S. Patent and Trademark Office and ruled that the disputed patents were invalid.

 

Fortune Brands’ golf equipment business is managed by Acushnet Co. Acushnet has an extensive Research and Development department that combines advanced technology with innovative design, and currently holds over 715 of the nearly 2,000 active patents related to golf balls.

 

In its defense, Fortune Brands had pointed out that the Titleist Pro V1 golf balls utilized indigenous technology from 74 Acushnet patents and was first introduced among its sponsored PGA TOUR players in October 2000, while the Spalding patents were issued later in 2001 and 2003.

 

Acushnet manufactures and distributes golf balls, clubs, shoes, bags, gloves, outerwear and accessories under brands such as Titleist, Pinnacle and FootJoy. Titleist, the flagship golf club brand of Fortune Brands, generated the lion’s share of sales in the golf club category and registered strong sales in 2009, when the overall golf club market declined due to the global recession.