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Monday
Mar202017

Costco Sues Acushnet: "This should get real interesting, real fast."

Nice work by David Dawsey at Golf-Patents.com to spot and analyze Kirkland golf ball-seller Costco's suit against Titleist-maker Acushnet.

Many thanks to all who sent various stories in, including the full pdf of the suit here.

Dawsey writes:

Costco is seeking a declaratory judgment that it is not infringing any valid patent rights owned by Acushnet by its sale of its Kirkland Signature golf balls and that it has not engaged in false advertising regarding the golf balls. Why did they take such a provocative step? The complaint states “[t]he need for such relief exists because Acushnet has wrongfully accused Costco of patent infringement and false advertising.”

The paragraphs noted by Dawsey are worth checking out, but this seems to be the key point:

7. In response to the popularity of the KS golf ball, Acushnet sent Costco a threatening letter, wrongfully accusing Costco of infringing 11 Acushnet patents based on its sale of the KS golf ball and engaging in false advertising based on its Kirkland Signature guarantee that all Kirkland Signature products “meet or exceed the quality standards of leading national brands.”

WSJ's Brian Costa reported the story for Journal readers with this measured take, while MyGolfSpy.com, which fueled interest in the ball with its review, reveled in the news, noting that the timing may be no coincidence:

The legal wrangling comes at a time when sources are telling us that Costco is ready to begin shipping K-Sig balls to its retail stores. Coupled with the lawsuit, the clear suggestion is that, letters be damned, Costco is going to sell its golf balls and make Acushnet fight publicly to stop it.

It remains to be seen if the new ball is the same as the old one, with the USGA conforming list suggesting that a new version of the ball has been approved.

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Reader Comments (12)

What will happen if golfers realize that having Titleist stamped on their ball doesn't make it magic? As more and more patents expire this will be repeated and companies like Costco can bury titleist with their ball as a loss leader. I think this can only help regular golfers who actual value performance over status.
03.20.2017 | Unregistered Commentermunihack
Snell also debunks the common notion that somehow Titleist was behind the sudden disappearance of the Kirkland Signature.

“This was a case of where the bark was so big, but the bite?” says Snell. “I read a lot of these blogs and people are saying it’s going to upset Titleist. I’m telling you, the volume that Costco sold – Titleist probably made just during this conversation.”

Snell says the actual impact Kirkland made on the golf ball market was minuscule – roughly .00002 percent. “That’s the amount they were able to do for that month. It doesn’t even show up on a market share chart.”

>>Dean Snell 2/27/2017<<




Wonder if Dean still feels the same?
03.20.2017 | Unregistered CommenterFluff
This is what I do for a living and I can tell you that Costco isn't a player in the patent world. It'll be interesting to see if they go scorched-earth. Next steps will likely be Acushnet filing a motion to dismiss per FRCP 12(b)(6) saying their was no imminent harm to Costco by simply sending the letter (they'll lose). Either way, that's a ton of patents for a single case. They filed in WAWD since it's their home court and didn't want to wait for Acushnet to file in their back yard and move to transfer.
I wonder if Costco can sell as many golf balls as Nike did, or as many as Taylor Made. I have wondered why Taylor has a new name for their golf ball every year.

2006 - TP Black/Red
2008 - TP Black/Red LDP
2010 - Penta TP
2012 - Penta TP3/TP5
2013 - Lethal/RBZ Urethane
2014 - TP/TPX/Project a
2017- TP5x, TP5
03.20.2017 | Unregistered CommenterScott
$73.5B market cap & $121.1B revenues versus $1.34B & $1.56B billion respectively, wow. Acushnet might come to regret picking this fight.
03.20.2017 | Unregistered CommenterCorner Man
So is the lawsuit to help distract from the new Kirkland ball being different than the first iteration? Or were they just annoyed by the Acushnet threats? This should be fun to watch.
03.20.2017 | Unregistered CommenterOB
It's a marketing battle. Most golf balls are pretty much the same. Certainly no impact on the 'average" golfer . Those that think otherwise are either owned by the marketing or like to feel that they are so good as to notice a difference. Whatever makes one feel good....
03.21.2017 | Unregistered CommenterBud
Two questions raised by this passage from the lawsuit:

"The KS golf ball sold out quickly, and was praised by golfers and experts as a golf ball of tremendous quality and value. Many reviewers compared the KS golf ball to higher-priced “tour quality” golf balls sold by national brands, such as Titleist, Callaway, and TaylorMade."

1) Thanks to our Tweeter in Chief, has "tremendous" now entered the legal lexicon?
2) Will Bridgestone sue for being left out of the comparison?
03.21.2017 | Unregistered Commenter3foot1
The Bridgestone ball is like a range ball without a stripe........so they should not be compared with Titleist
03.21.2017 | Unregistered CommenterTom
@Tom that might be the most illogical post ever.
03.21.2017 | Unregistered CommenterKicker
Costco/Sams Club...for suckers...
03.22.2017 | Unregistered CommenterStevie
I hope Costco grinds them to a pulp.
03.22.2017 | Unregistered CommenterPress Agent

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