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Businesses Patents The Almighty Buck The Courts

A Lawsuit Over Costco Golf Balls Shows Why We Can't Have Nice Things For Cheap (qz.com) 266

Ephrat Livni, writing for Quartz: Unless you're a golfer, you probably don't think about golf balls. But a new US lawsuit about these little-dimpled spheres has an economics lesson for all shoppers, showing why consumers have cause for concern when companies use court for sport. Costco, the wholesale membership club, rocked the golf world in 2016 when it started selling its Kirkland Signature (KS) golf balls at about $15 per dozen, a quarter to a third the price of popular top-ranked balls. Industry insiders called it a "miracle golf ball" for its great performance and low cost, and Costco sold out immediately. It's planning to release more in April. In response to the bargain ball's reception, however, Acushnet -- which makes the popular Titleist balls -- sent the membership club a threatening letter. It accused Costco of infringing on 11 patents and engaging in false advertising for claiming that KS balls meet or exceed the quality standards of leading national brands.
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A Lawsuit Over Costco Golf Balls Shows Why We Can't Have Nice Things For Cheap

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  • Where's the news? (Score:5, Insightful)

    by Opportunist ( 166417 ) on Tuesday March 28, 2017 @09:44AM (#54126979)

    Those who can, do.
    Those who can't, sue.

    It's not like this is anything new.

    • Those who can, do.
      Those who can't, sue.

      Or, you could just as glibly say: those who could, did, and those who couldn't, copied.

      I have no idea if that's actually how it went down, just as I presume you have no particular evidence this is a nuisance suit. But if Costco did indeed copy Acushnet's patented features, I take it you wouldn't deny the actual inventor legal recourse.

      • by Opportunist ( 166417 ) on Tuesday March 28, 2017 @10:58AM (#54127617)

        Depends entirely on whether the invention is the golf ball equivalent of round corners.

      • Re: (Score:3, Insightful)

        I take it you wouldn't deny the actual inventor legal recourse.

        That really depends on what they "invented"
        Knowing the way the patent system is abused, knowing the simplicity of a golf ball, and how old the concepts are that govern their design, I believe any patent claims against a golf ball in *20-fucking-17* should be viewed with a massive fucking grain of salt.

        For example, dimples being understood to provide highly improved aerodynamics was pantented back in 1905.
        Are that patents here number, shape, and size of the dimples? If so- bullshit patent. But perfectly

        • Re:Where's the news? (Score:5, Informative)

          by msauve ( 701917 ) on Tuesday March 28, 2017 @11:58AM (#54128225)
          "Are that patents here number, shape, and size of the dimples? If so- bullshit patent."

          Why so? There may be significant R&D which goes into the aerodynamics.

          In any case, Costo says they have an "out" on every patent because there's a least one claim which doesn't apply to their ball. The claims seem to be in 3 classes: material hardness, "bounce" (Coefficient of Restitution), and dimple pattern ("profile defined by the revolution of a catenary curve" in 3 patents). Costco also challenges them based on prior art.

          In any case, here are the patents, go look them up instead of asking what they're about: 6994638, 8123632, 8444507, 9320944, 8025593, 8257201, 7331878, 6358161, 7887439, 7641572, 7163472.
    • by UnknownSoldier ( 67820 ) on Tuesday March 28, 2017 @10:45AM (#54127481)

      Agreed. This has been around for ages:

      "If you can't innovate, litigate"

      As much as I hate LinkedIn one of the pieces is interesting:

      * "Don't Innovate, Just Litigate" - No Genuine Inventor Thinks That Way [linkedin.com]

      --
      * Main Street built America
      * Wall Street destroyed America

    • Those who can, do.
      Those who can't, sue.

      It's not like this is anything new.

      Yeah, except that Acushnet quite well "can". The issue here is more of "those who can make enough money to file lawsuits and prevent others who can from doing". That's problematic.

    • Why do comments like this get voted up? "Not being new" doesn't mean something isn't newsworthy. If a country started a war in the same way another country had, it'd still be news.

      The quality of comments on slashdot has really gone downhill.
    • Those who can't, sue.

      Those who can't what, May?

    • To be fair, this is not about "non-practicing entities" -- aka patent trolls. The companies that are suing actually do sell real physical golf balls incorporating some of the patents into the manufacturing process and design.

      Maybe those patents are invalid, IANAPL, but this is definitely not a case of "those who can't, sue".

  • by Nutria ( 679911 ) on Tuesday March 28, 2017 @09:48AM (#54127011)

    No, it doesn't. This is actual, physical "stuff" which has been invented, not gauzy ideas.

    If these balls actually violate the 11 Acushnet patents (and they're in force), then it's right and good for Acushnet to ban Costco from selling them.

    (And that's ignoring whether or not the claims of false advertising, which would mean that they wouldn't be nice in the first place.)

    • by swb ( 14022 ) on Tuesday March 28, 2017 @10:01AM (#54127121)

      Given the utter crap that's been given patents combined with the mechanical complexity of a golf ball, from club strike to landing, how likely are existing golf ball patents to be really bogus claims and drawings of dimples?

      In any given 2-3 year time span, there's like what, maybe a dozen professional golfers so skilled that they are able to hit the ball on a predictable basis? The remaining pros vary wildly and the amateurs are all over the map, so assessing the claims and technology of golf balls is pretty difficult.

      And the amateurs will do/buy anything to improve their game. I do some work at a country club and the schlock on sale to golfers makes global warming skeptics look like Einstein.

      And it also wouldn't surprise me if the markup on golf balls was stratospheric, representing the general affluence of many golfers, so there's lots of profit being protected here.

      • And the amateurs will do/buy anything to improve their game. I do some work at a country club and the schlock on sale to golfers makes global warming skeptics look like Einstein.

        So, Titleist are the Monster Cables of the golfing/country club set....?

        ;)

      • I would presume, however, that when *testing* a golf ball, you would use a machine that swings in a very well-defined way. Not the same way every time, but maybe one perfect shot, a slight hook, a slight slice, large pull, et cetera. This gives a controlled test that can provide quantitative metrics for different ball designs.
      • In any given 2-3 year time span, there's like what, maybe a dozen professional golfers so skilled that they are able to hit the ball on a predictable basis? The remaining pros vary wildly and the amateurs are all over the map, so assessing the claims and technology of golf balls is pretty difficult.

        Robots are regularly used to compare golf equipment for that reason. Google "Iron Byron" for details.

      • Hey! Orange balls! I'll have a box of those. Give me a box of those naked lady tees, and gimme two of those, gimme six of those...

      • Presumably they use robotic arms you test the golf balls.

    • by MagicM ( 85041 ) on Tuesday March 28, 2017 @10:03AM (#54127135)

      If you read TFA you will see that "why we can't have nice things for cheap" refers to the tactic employed by large companies of threatening legal action against small competitors that those competitors can't afford to defend against, even if they are likely to win. It's a tactic that Acushnet has used before.

      • What's their market cap vs CostCo?

        Sounds like they've picked on the wrong company.

        Lesson 1 for patent trolls: Don't sue very deep pockets with staff shysters.

      • If you read TFA you will see that "why we can't have nice things for cheap" refers to the tactic employed by large companies of threatening legal action against small competitors that those competitors can't afford to defend against

        Yeah, that's the first thing that comes to mind when I think of Costco -- an itty-bitty company that can't afford to defend itself.

        • by rahvin112 ( 446269 ) on Tuesday March 28, 2017 @11:10AM (#54127717)

          Costco is actually a very lean operation. They make very little profit on anything they sell, all the profit comes from membership fees. Basically the cost of any product at Costco is their wholesale cost plus about 10% to cover the overhead costs. They typically make anywhere from -0.5% to 0.5% profit on individual items. The cost of a patent battle are large, they could probably afford it but the patent holder is betting they won't want to spend the money.

    • by Anonymous Coward on Tuesday March 28, 2017 @10:05AM (#54127147)

      Did you read the article? It will never be known if Acushnet's patents are being violated, because they can use their legal might to force everyone else out of the golf ball business under threat of being forced out of business entirely.

      Acushnet doesn't own 11 golf ball patents, it owns the high-end golf ball business. The free market can't solve this, because patents have eliminated the free market for golf balls. And that's why we can't have nice things for cheap.

    • However, you left out if these balls actually are NOT violate all 11 Acushnet patents, what would happen? This is a part of business tactic when a company is using patents to force others out of its way of monopoly. If it is the case, this is a kind of patent troll tactic and I don't support it...

      Also, from what I read TFA, Acushnet is trying to force "meet or exceed the quality standards of leading national brands" as Costco advertisement of their balls (#7 in the Complaint [golf-patents.com]). However, if you really look at

      • by Nutria ( 679911 )

        However, you left out if these balls actually are NOT violate all 11 Acushnet patents, what would happen?

        That's irrelevant to my point (which is that -- surprise, surprise -- the article title is utter bullshit).

    • I love the way this looks on paper:

      Patent infringement:
      "You totally copied all of our best secrets for making awesome golf balls!"

      False advertising:
      "Your golf balls are shyte Costco!"

      Which is it? Did they take your awesome patented ideas or are the golf balls nothing more than under-performing over-hyped sales gimmicks?

      Or, maybe they both are...

      • by Nutria ( 679911 )

        Which is it? Did they take your awesome patented ideas or are the golf balls nothing more than under-performing over-hyped sales gimmicks?

        Option #3: You stole our ideas but implemented them like crap.

        (NB: I don't know nor care which is the truth.)

  • Been going on in the tech industry for decades.
  • by Anonymous Coward on Tuesday March 28, 2017 @10:06AM (#54127153)

    They published why they don't infringe.

    http://golf-patents.com/wp-content/uploads/2017/03/20170317-Complaint-Costco-v-Acushnet.pdf

    That should give the other side pretty good visability as to what their options are.
    Will be interesting to see what they do next.
    If Costco did their homework, then maybe the dreaded golf ball triopoly is dad.
    Oh, it's sooo exciting just can't wait to see what happens next.

    • by Solandri ( 704621 ) on Tuesday March 28, 2017 @10:39AM (#54127435)
      For those who don't want to read through that rather boring document, Costco claims they are not infringing because the hardness of the cores, coefficient of restitution of the cores, and density and shape of dimples on the Kirkland ball do not fall within the range of those specified in the patents. And that the patents are invalid due to prior art.
    • by gnasher719 ( 869701 ) on Tuesday March 28, 2017 @10:46AM (#54127489)
      Very nice find. So Acushnet made some threatening accusations, and now Costco is taking them to court, asking for a declaratory judgement.

      They want to stop Acushnet to make any accusations of patent infringement, because (a) in all 11 cases the Costco balls are not made in the way that the patent claims, and (b) in all 11 cases the Acushnet patent is invalid because of prior art. For example, one patent claim is for balls "where dimples cover more than 80% of the surface", and Costco says with their balls, dimples _don't_ cover that much surface.

      Acushnet also accuses Costco of "false advertising" because they are saying "their products are as good or better than top brands". And there Costco's argument is that (a) they never directly compared to Acushnet, and (b) reviewers and players have repeatedly said that their golf balls are at least as good as Acushnet.

      I think someone at Acushnet is in trouble now for sending threatening letters.
      • I think someone at Acushnet is in trouble now for sending threatening letters.

        Surely not. This has been an extremely successful tactic to crush competition up to now. The ridiculous margin they are making on their balls surely covers the modest cost of a lawyer who writes threaten letters (and the legal department that is "innovating" by writing up new patents to file).

    • by careysub ( 976506 ) on Tuesday March 28, 2017 @11:50AM (#54128153)

      This being /. lots of people are speculating about what the patents might be, rather than simply following the link and then looking them up and actually knowing.

      Here are links to four of the patents mentioned (there are eleven of them I don't have time to create markup links for all of them): US6994638 [google.com.na], US8123632 [google.com.na], US8444507 [google.com.na], US9320944 [google.com.na]. The other patents are: US8025593, US 8257201, US 7331878, US6358161, US7887439, US 7641572, and US7163472. You can Google them like I did.

      Looking over Costco's response, and looking at the patents themselves, I have a strong feeling of deja vu. Acushnet is not a patent troll, since they actually sell a product and are using the patent system to crush competition with litigation threats, but to my eye the patents are written in the finest patent troll tradition. They are all highly complex grab bags of a whole lot of claims written very broadly, a rich shopping list for lawyers to turn into legal accusations. Literally hundreds of separate claims are made in these patents, in a densely cross referenced fashion. They aren't patents of any identifiable invention, they are simply a wall of claims on every possible aspect of a golf ball so that something can be carved out to attack any competitor.

      Note that Acushnet has never had to defend any of these claims in court! With the deeply broken patent system we have today, in which its stated purpose (to encourage innovation for the public good) has been turned on its head as a way of suppressing actual innovation and protecting established corporations, a patent cannot be assumed to have any validity until it has actually been litigated. The courts are called on to do the job of the patent examiners.

      I doubt Costco is going to lose this case.

  • Dimpled (Score:4, Funny)

    by PopeRatzo ( 965947 ) on Tuesday March 28, 2017 @10:06AM (#54127167) Journal

    I got your dimpled balls right here.

  • These days, almost every single small consumer product is made in China or similar countries. Factories turn out the same electronics for Apple, Lenovo, Dell, etc. and the only differentiation is the case and branding. It wouldn't surprise me if there were one or two massive golf ball factories turning out millions of balls a month, and just slapping the Titleist or Nike or Kirkland Signature logo on a slightly differentiated design. This happens a lot in electronics too -- Cisco's contract manufacturers se

    • by hesiod ( 111176 )

      I'm actually surprised that there's a market for cheap golf balls given how much disposable income you need to have to play golf these days. You need to belong to a country club, buy thousands of dollars worth of equipment

      Not really: you can buy relatively good clubs (non-pro of course) for a few hundred dollars, and there are plenty of golf courses that don't require club membership. You can play a round for less than $50 on some decent courses. They're not quite PGA-level, but then again if you aren't going to spend a ton of money you probably aren't at the skill level that would require.

      • My town has a city-owned golf course (not uncommon). This course was a private course that was struggling and the city purchased it a couple of decades ago.

        Greens fees are about $20.

        • In my area it's the exact opposite. They use tax dollars to build something, mismanage it horribly, then sell it for pennies on the dollar to their buddies because it is "failing". It's a great way for politicians to transfer public money to their friends.

    • You can play golf with a $110 set of clubs (which you can probably find cheaper used) at a public course for $20 to $40 a round, if you walk rather than rent a cart. If you want, you can buy some golf shoes, but they're not required. It does not require thousands of dollars nor membership in a country club.
  • The cost of making the Costco golf balls and the Acushnet balls is probably similar. Acushnet spends a lot of money on advertising and gives a lot of its product to professional golfers so they're going to cost more to those who actually pay for them.
  • by BarbaraHudson ( 3785311 ) <barbara.jane.hud ... minus physicist> on Tuesday March 28, 2017 @10:18AM (#54127263) Journal

    This won't be like before, when the manufacturer sent threatening letters and forced smaller manufacturers to either go to court of get out of the business entirely. Costco is suing, and now Acushnet Holdings has to either prove their claims or fold. Same as IBM and Novell when SCO made similar bad noises about patent infringement, the big boys can't afford to let someone slander them.

    Any bets that another patent troll is going to get a kick in the balls?

  • Costco's no dummy.. also they are know for taking cases all the way to SCOTUS. Sueing them could get very expensive for the gold company very fast.
  • Technicality question on advertising and legalities around their verbiage. It's been a while, but I thought when somebody uses the phrase "Leading National Brand" it means absolutely nothing in court. In other words, they can always say they are better than the leading national brand, because there is no definite requirement for who is "leading". Leading might mean their 5 year old son who sells golf balls he found in the ditch outside.

    Some other gotchas I remember are "Best", "Number 1", and crap like that

    • by green1 ( 322787 )

      While you're mostly right, it's not quite that straightforward.

      "leading brands" doesn't necessarily mean any specific one, but it wouldn't mean a brand nobody has ever heard of, it would have to be one of the top ones, but not necessarily "the" top one, and it can be "top" by various different metrics (they didn't specify) so it could be be top by sales volume, or profit, or most used by professionals, or by amateurs, most well recognized brand, or any of a number of other qualifications.

      Additionally "bette

  • From TFA: "Companies with deep pockets lock down the market by making it too expensive for competitors to operate and to offer lower-priced yet quality products. It is a legitimate tactic; even those who succumb to it don’t really begrudge the approach."

    If this is a "legitimate tactic", the so-called Free Market is seriously fubar'd.
  • It is not that we can not have nice things, it's we can't have nice things and not pay for it. Plus there is that pesky thing called a patent to take into account.

Some people manage by the book, even though they don't know who wrote the book or even what book.

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