Callaway Golf Co. (NYSE: ELY), the maker of Big Bertha golf clubs, lost a bid for $246 million in patent- infringement damages from Fortune Brands' (NYSE: FO) Acushnet unit when a jury decided four Callaway golf ball patents aren’t valid.
Monday's verdict came after a weeklong re-trial in federal court in Wilmington, Del., where Acushnet had agreed its Titleist Pro V1 products infringed and claimed the patents couldn’t be enforced.
The jury of five men and four women deliberated about four hours before deciding the patents covered inventions that aren't new and are obvious.
"We are disappointed with the jury's verdict, particularly in light of the fact that it is contradicted by the prior victory we obtained on these same patents in 2007 and is inconsistent with the great weight of the evidence," Steve McCracken, Callaway’s chief administrative officer, said in an e-mailed statement. "We will file a motion with the court to set aside the verdict."
Callaway fell 22 cents, or 2.4 percent Monday, to close at $8.76. Deerfield, Ill.-based Fortune Brands rose 28 cents to $49.34.
Callaway, based in Carlsbad, sued in 2006 over claims Fairhaven, Mass.-based Acushnet infringed patents for multilayered golf balls. A jury ruled in December 2007 that three of the patents were valid and one was partly valid.
'Made a lot of money'
That ruling was overturned last year by the U.S. Court of Appeals for the Federal Circuit in Washington based on inconsistencies in the decision.
"They made a lot of money" with Callaway's ideas, lawyer Frank Scherkenbach, representing Callaway, told jurors at the trial, supervised by U.S. District Judge Sue L. Robinson. "You can’t take somebody else’s invention and use it," he said.
"That's our invention, and we should be able to use it," countered Acushnet lawyer Henry Bunsow. He said the polyurethane-covered golf balls were well-known at least since 1980.
The Callaway patents cover golf balls that are hard enough to travel long distances while maintaining characteristics such as spin control for approach shots.
"We hope that this finally brings this long-standing dispute to a close," said Joe Nauman, Acushnet's executive vice president for corporate and legal. "We have explained throughout this process that Acushnet independently developed the technology in question."
The case is Callaway Golf Co. v. Acushnet Co., 06cv91 (SLR), U.S. District Court, Delaware (Wilmington).