Costco Takes Swing at Acushnet over Golf Balls
Costco, the membership-based retailer known for their Kirkland Signature brand, good deals, and bulk items, has filed a complaint in the District Court Western District of Washington at Seattle against Titleist golf ball manufacturer, Acushnet. The complaint was prompted after Acushnet sent Costco a “threatening letter” accusing the company of infringing on 11 of their patents and false advertising. The complaint was filed proactively to stop any action Acushnet may take.
In a written statement Costco said “[w]e have asked the Court to protect our right to continue to sell our Kirkland Signature golf ball against challenges made by Acushnet under patent and advertising laws.”
Costco’s Kirkland Signature brands are often times seen as a less expensive equivalent to a more well-known product. For many of these products, the patents have expired and other manufacturers, including Costco, have taken advantage of this by offering their house brand for a discounted price.
In 2016, Costco began to sell Kirkland Signature golf balls. The Kirkland Signature golf balls are a four-piece, urethane-covered ball that retails for approximately $15 per dozen; a significant savings compared to the cost of top name-brand golf balls. The golf balls quickly sold out and received praise from golfers and golf experts as being a “tour quality” ball comparable to other top rated national brands.
Costco advertised the golf balls to “meet or exceed the quality standards of leading national brands,“ and gave the golf balls the Kirkland Signature guarantee. In the letter Acushnet sent, they argued Costco’s Kirkland Signature guarantee and “meet or exceed” statement indicates “to a reasonable consumer that the KS golf ball is the same or of greater quality as Acushnet’s Pro V1 golf ball.” Costco stated they have “never publicly compared the KS ball with any Acushnet ball, including Acushnet’s Pro V1 golf balls.” They further stated “[a] reasonable consumer would not interpret the Kirkland Signature guarantee as intended to convey a statement of fact about any specific comparisons of quality between the KS ball and any specific manufacturer or ball.”
Currently, the golf balls are sold out in stores and are not listed on Costco’s website. However, the company said, “[o]ur golf ball will go back on sale in early April, but supplies are limited.”
Acushnet is no stranger to intellectual property legal battles. The company had a lengthy battle with its competitor Callaway and recently filed a lawsuit against multiple small start-up companies citing patent infringement. The companies could not afford to battle the golf ball giant and were forced to close.
It is questionable as to what steps will be taken next. Costco’s complaint puts the “golf ball” in Acushnet’s court. A publicized legal battle may highlight the fact that Acushnet’s competitor sells a less expensive ball that has received high marks from the golf world. When asked to comment Acushnet said, “[a]s is the case with all matters of litigation, we will have no comment.”
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