Acushnet Company has initiated a product exchange program to eliminate any market confusion and minimize the business impact to retailers of the court injunction against certain of its Pro V1 products.  The injunction is scheduled to take effect on Jan. 1, 2009.  The company does not expect the exchange program to have a material adverse impact on its results.


As previously announced, the production of existing Pro V1 model golf balls was converted in September to be outside the patents at issue.  Acushnet began shipping the converted product to retailers in November.  Acushnet has requested that, as of Jan. 1, retailers sell only these converted Pro V1 and Pro V1x golf balls.  There are limited amounts of non-converted Pro V1 model golf balls in retail inventory, and Acushnet has requested that retailers return all non-converted golf balls remaining in their inventory as of Jan. 1 in exchange for converted product.  Converted product can be identified by a black or red circle on the dozen box and sleeves. The injunction and exchange program are limited to the United States and do not apply to retailers, distributors or tour usage outside of the U.S.


“We have made every possible effort to ensure that this legal dispute did not find its way into the golf marketplace,” said Wally Uihlein, chairman and CEO, Acushnet Co.  “Unfortunately, our attempts to resolve the difference of opinion on the retail inventory issue with Callaway have been unsuccessful.  As a result, we decided that it is critical to remove this uncertainty for golf retailers and minimize any impact on their business, particularly during these already challenging times.” 


On Nov. 10, 2008, the U.S. District Court in Delaware granted Callaway Golf’s request for an injunction in a dispute with respect to four Callaway patents and Acushnet’s Titleist Pro V1 golf balls.  Acushnet disagreed with the judge’s ruling and filed an appeal on Nov. 19, 2008, to seek relief from the injunction, and to appeal the district court actions and other of the court’s decisions. 


Although a stay of the injunction was not granted, Acushnet said it will continue to vigorously defend its position that all claims of all four patents at issue are invalid in the appeal process.  The appeal will include the fact that the U.S. Patent and Trademark Office has issued final office actions that have determined these patents to be invalid.  Acushnet said it expects the Appeals Court will likely render a decision sometime late in 2009.