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Patent Truths
Disputes over patents still lie at the core of most equipment lawsuits, and one of the reasons for the recent increase in litigation is the inability of the government’s patent office to respond to the crush of applications. The U.S. Patent and Trademark Office employs 5,500 examiners, mostly young engineering graduates putting in a few years before law school, to handle the applications—599,595 in 2007 alone. Many of those applications only receive cursory reviews.

The general counsel for a large manufacturer who asked not to be identified says that each examiner is allowed on average just 20 hours to make a ruling on an application. Due to the lack of thorough examination, many issued patents are invalid, giving rise to litigation.

Rather than leave it up to the government, many companies police themselves and each other. Clay Long, chief product designer for Nicklaus Golf, spent a stint at Acushnet where, “30 percent of my time would be spent developing products and another 35 percent was spent looking at existing intellectual property to make sure we didn’t inadvertently copy something else.

“Then we’d turn it over to the attorneys and they’d do their own search before giving us clearance. When you’re making 200,000 drivers, your risk is a lot greater.”

The other area of focus is counterintelligence. At Bridgestone, scientists regularly cut open balls introduced by competitors—both to study the design and to make sure others aren’t lifting Bridgestone’s technology. “Competitive testing is a pretty normal part of the R&D process now,” says Dan Murphy, director of marketing for Bridgestone.

Should they find an irregularity, Bridgestone tries to handle it privately; if it can’t, it’s off to the courtroom. While the golf business was once a clubby affair populated by benevolent executives who were inclined to resolve disputes amicably—and privately—today’s industry is dominated by publicly held companies who now speak of their “fiduciary duties” to “maximize shareholder value.”

In addition, with the golf business no longer growing the way it did in the 1990s, the only way for a CEO to keep shareholders happy is to get his fork into a competitor’s slice of the pie.

“It’s not happenstance that there are more lawsuits,” says Leigh Bader, owner of 3balls.com and one of the leading golf retailers in the country. “There’s more skin in the game and the stakes are higher now for a lot of these executives.”

That pressure trickles down to every department, including legal, to add to the bottom line. “There’s more emphasis at companies on getting revenue out of patent portfolios,” says David Dawsey, a patent lawyer from Columbus, Ohio, who authors the blog Golf-Patents.com. “A lot of companies now view their patent departments more as profit centers than as overhead.”

As a result, the number of patents has exploded—there are now more than 2,000 active ball patents and more than 500 club patents. While that increase is partly due to technological advances, insiders also attribute the rise to a push by companies to file for patents on every new design wrinkle, whether it’s warranted or not.
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