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

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.

19 of 266 comments (clear)

  1. Where's the news? by Opportunist · · Score: 4, Insightful

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

    It's not like this is anything new.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    1. Re:Where's the news? by stealth_finger · · Score: 4, Insightful

      Sounds like they could, but couldn't sell, then Costco stole and sold on massive scale while providing inventors with nothing. Did I miss anything here?

      The inventors of what? The golf ball? Did Acushnet invent it? Seriously though, how can a golf ball have 11 patents on it?

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    2. Re:Where's the news? by Anonymous Coward · · Score: 2, Insightful

      Competition is great. It's the cornerstone of free-market capitalism. It brings innovation, better products, and cheaper prices...

      ..Until somebody's competing against you. Then it's time to sue.

    3. Re:Where's the news? by stealth_finger · · Score: 5, Insightful

      OK then, so they have a patent on each specific part of a golf ball, all layers patented separately, separate patent for the dimples, another one defining the size and shape of said dimples etc etc. I know the answer and the answer is because the US patent system is an absolute clusterfuck and just gathering and holding onto them so you can sue anyone who does anything remotely similar to shut down competition while crying free market. That's how you get at least 11 patents on a golf ball (are there more they aren't claiming are being infringed? Probably not but maybe).

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    4. Re:Where's the news? by UnknownSoldier · · Score: 3, Insightful

      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

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

    5. Re:Where's the news? by Opportunist · · Score: 3, Insightful

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

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    6. Re:Where's the news? by Opportunist · · Score: 3, Insightful

      Yup. Hence the new American dream: Win the lottery or get run over by someone rich and sue.

      Once people realized that "hard work" ain't gonna cut it anymore, that's basically what's left.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    7. Re:Where's the news? by DamnOregonian · · Score: 2, 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 valid in today's patent system- until it goes to court (and even then, depends how far away you are from East Texas)

    8. Re:Where's the news? by Anonymous Coward · · Score: 4, Insightful

      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.

      IIRC, Costco bought up a contract manufacturers overrun (company was hired to make X number of golf balls, but for what ever reason they made Y number).
      So the Titleist folks hired a manufacture in China to produce 3 million golf balls. The Chinese company either made 6 million or the contracting company rejected the lot as inferior. Either case the Chinese company now has 3 million golf balls that it doesn't want to lose money on. So they sold the whole lot to Costco. Costco then goes and sells them $15 / dozen .. versus Acushnet's $45-$60 / dozen.

      Acushnet sees its gravy train approaching a washed out bridge and files lawsuit to repair it.

      So the Chinese manufacturer was contracted to make 3 million balls, "accidentally" made 6 million, sold the original 3 million, then turned around and sold the extra 3 million to Costco?

      Sounds true.

    9. Re:Where's the news? by smooth+wombat · · Score: 3, Insightful

      Golf balls. Someone actually designs the things? What an awful way to spend your life.

      Pick any industry and someone is designing something for it. One could have the same opinion for keyboards, mice, or the little stick on a PS3 controller.

      How about designing a knob for a radio in a car? You think that's glamorous? A button on the steering wheel perhaps? Just because you don't think it's anything worthy of doing doesn't mean someone else doesn't enjoy doing it.

      --
      We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
  2. "Shows Why We Can't Have Nice Things For Cheap" by Nutria · · Score: 3, Insightful

    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.)

    --
    "I don't know, therefore Aliens" Wafflebox1
    1. Re:"Shows Why We Can't Have Nice Things For Cheap" by swb · · Score: 4, Insightful

      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.

    2. Re:"Shows Why We Can't Have Nice Things For Cheap" by rahvin112 · · Score: 3, Insightful

      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.

  3. Re:Costco can hold their own by Tokolosh · · Score: 5, Insightful

    When elephants fight, it is the grass that suffers.

    --
    Prove anything by multiplying Huge Number times Tiny Number
  4. Re: The Real Question by Lumpy · · Score: 4, Insightful

    Except when there is industry collusion to keep prices inflated. The golf industry is ABSOLUTELY big on that. Golf balls are incredibly cheap to make and Titleist knows their balls are not worth what they sell them for.

    --
    Do not look at laser with remaining good eye.
  5. Re:Costco put some cards on the table by Anonymous Coward · · Score: 2, Insightful

    Nor sure what you're saying here. Costco is selling their golf balls under their own label. They're claiming they are as good as the three labels names. "good" here is undefined. They are not saying they are made the same or even to the same specifications. They are not passing them off as balls made by Acushnet.

  6. Farm Equipment and how patents once worked... by number6x · · Score: 5, Insightful

    I look out the window of my building from my cubicle and see a little sliver of Grant Park on Chicago's lake front to the south. On the other side of Grant Park lies Soldier's Field and McCormick Place.

    McCormick Place is named after "Colonel" Robert McCormick, staunch anti FDR Republican and owner of the Chicago Tribune. Colonel McCormick was one of the heirs of the fortune made by Cyrus McCormick selling the McCormick reaper.

    The reaper was patented. Obed Hussey had patented a reaper as well. They fought in court over the patents, but both were sold for many years under the separate patents. Obed ended up with the "most" ownership of the design, but they were not exactly alike.

    Think about the old saying: "Build a better mouse trap, and the world will beat a path to your door."

    As a matter of fact, Massey Ferguson, John Deere, Alice Chalmers and many others made reapers, harvesters, tillers, bailers and many more patented farm equipment. Each performed the same functions, but each did it in a slightly different way. They each were building better mouse traps, not the same one. The US constitution supports patents in section 8:

    "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

    The purpose must be to promote, not hinder, the "Progress of Science" and "useful Arts". Temporary, and exclusive, rights "to their respective" creations are granted. Not all creations that perform the same function are protected against, but the ones that do it the way you made it work. If someone else makes a golf ball that is different than your golf ball, they get their patent and you get yours. In this way the 'useful Arts' are promoted. "Build a better golf ball and the golfers will beat a path to your door" has become "and the lawyers will beat a path to the Court."

    We have come almost 180 (degrees) in patent law from the simple language of the Constitution. Patents should protect an individual, specific design, and those very close to that specific design. However, they should not hinder novel designs. That would be against what the constitution authorizes. Also they must be time limited, or innovation will be destroyed. Manufacturers often tweak products and file for a new patents, then use the current broad, not specific, reach of patent law to hinder innovative competition.

    The current interpretation of patent, and copyright, law clearly is in opposition to the clear language of the constitution. We arrived at where we are through multiple small steps, small interpretations of the law that have us now applying laws that grant broad reaching and almost never ending rights. The current state of the law, as interpreted through the lens of many years of collective case law, hinders innovation, competition and free enterprise.

  7. Re:Costco put some cards on the table by careysub · · Score: 4, Insightful

    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, US8123632, US8444507, US9320944. 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.

    --
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  8. Re: The Real Question by Tobenisstinky · · Score: 4, Insightful

    I believe this is a case of "Waaah, Costco pushed us off the gravy train!"

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