Acushnet Wins New Trial in Titleist Pro V1 Golf Ball Patent Case

Acushnet Company, the golf business of Fortune Brands, Inc. (NYSE: FO), announced that on August 14, 2009, the United States Court of Appeals for the Federal Circuit granted the company’s request for a new trial and issued other favorable decisions in its patent dispute with Callaway Golf.

In its opinion, the Court of Appeals’ three-judge panel found that the inconsistent jury verdict holding one patent claim invalid and others not invalid was irreconcilable and could not stand. As a result, the Court of Appeals overturned the judgment and injunction entered by the District Court in November 2008 and sent the case back to that court for a new trial. The court also found that the trial court erred in rejecting an important Acushnet defense before the trial and in not allowing certain evidence supporting that defense. Acushnet now will be able to assert that defense and the supporting evidence, in addition to its other significant defenses, in a new trial before the District Court. The ruling also confirms that all Titleist Pro V1 products can be sold, bought and played with confidence and without any threat of disruption in service.

Successful Appeal Enhances Acushnet’s Confidence

"This very positive Court of Appeals ruling affirms our contention that we were not allowed to argue our full case before the jury and that the resulting verdict was inconsistent and not sustainable,” said Joe Nauman, Executive Vice President, Corporate and Legal, Acushnet Company. "We look forward to making our full case to a new jury, where we will have the opportunity to present all of our defenses with more complete evidence. The Court of Appeals decided for us on critical issues that enhance our confidence that we will ultimately prevail in this case. In addition, our confidence is bolstered by the fact that the U.S. Patent & Trademark Office has now issued final reexamination decisions holding that all claims of all four patents are invalid. In fact, the defense reinstated by the Court of Appeals decision is one that the PTO has relied on in its decisions.”

Following a trial in December 2007, a jury in the United States District Court for the District of Delaware was charged with deciding the validity of nine specific claims in four Callaway patents. The jury determined that one claim was invalid and that the other eight claims were not invalid. This created an inconsistency in the verdict that Acushnet and the Court of Appeals viewed as irreconcilable. In addition, there were a number of pre-trial rulings by the court that Acushnet believed materially impacted the outcome of the trial. Acushnet appealed and the Court of Appeals agreed that the District Court erred in several of its rulings, requiring a new trial and possibly other proceedings.

Acushnet is the industry leader in developing golf ball technology and has over 650 active golf ball patents – more than any other manufacturer. Titleist Pro V1 golf balls are the product of technology developed and accumulated by the Acushnet Company over the past 20 years, and over 65 Acushnet patents are related to the Pro V1 family.

Titleist, FootJoy and Cobra comprise the major golf brands of Acushnet Company, an operating company of Fortune Brands (NYSE: FO). For more information about Titleist, visit us online at www.titleist.com or contact Joe Gomes, Director of Communications (508.979.3211).