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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.
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.
When elephants fight, it is the grass that suffers.
Prove anything by multiplying Huge Number times Tiny Number
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.
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.
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.
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.
So, Titleist are the Monster Cables of the golfing/country club set....?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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?
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
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.
it is the grass that suffers.
Well, to be fair, every golfer should know to repair their divots.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
By both revenue and market cap, Costco is roughly 70-80x the size of the golf company. Costco's net income alone is higher than both Acushnet's revenue and their market cap. Costco has essentially unlimited resources available to fight any litigation, meaning this case will be decided on the merits if Costco wants it to be.
By both revenue and market cap, Costco is roughly 70-80x the size of the golf company. Costco's net income alone is higher than both Acushnet's revenue and their market cap. Costco has essentially unlimited resources available to fight any litigation, meaning this case will be decided on the merits if Costco wants it to be.
I saw a documentary about 10 years ago. Apparently Costco has it's own law-school too.
Yes, but I suspect you are not willing to let the Anonymous Cowards swing a 9-iron at them.
"That's the way to do it" - Punch
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.
I believe this is a case of "Waaah, Costco pushed us off the gravy train!"
wha'? where am i?
The reason Costco sells them cheap is because they deal in volume - instead of making balls in hundreds of thousands, they can make balls by the millions, extracting mass production cost benefits.
And because they were partnered up with another company who designed the balls, they got a good quality ball, made quite cheaply in volumes that out-do the other manufacturers since Costco does stuff in bulk.
Apparently the golf balls in question are a OEM ball manufactured by Nassau Golf Company (located in South Korea). Nassau has also sold OEM golf balls to TaylorMade (a golf equipment subsidiary of Adidas). Although I suspect nobody knows for sure, the word on the street was it manufacturing over-run which is unlikely to be repeated.
The interesting thing that most folks are missing is that Costco is pre-emptively suing Acushnet (the seller of Titleist balls) seeking declartory judgement (yes, Costco is doing the suing) in response to a lawyer letter sent by Acushnet. This is mostly because they need to defend the tag line "meet or exceed the quality standards of leading national brands" of their Kirkland branded products, not because they want to sell more golf balls (although they probably do, it's not the main reason for their lawsuit). They want to establish a legal precedent that they can use this tag line in the rest of their business to deter future lawsuits on this basis.