Fernando H. Green Blog: UPDATE: PXG vs. TaylorMade

Here we go again.

Here's the latest in what's turned into a semi-weekly update in the ongoing patent infringement case between PXG and TaylorMade.

When last we checked in, TaylorMade had just countersued PXG, claiming that several of the Bob Parsons owned company's products infringe on TaylorMade patents. As is commonplace in patent litigation cases, TaylorMade also asked the court to declare five of PXG's patents invalid.

On December 4th, and pretty much as expected, PXG fired back. In its Amended Complaint, PXG has expanded its original complaint, now alleging that TaylorMade has specifically infringed on 11 of its patents (in total PXG has been granted 128 patents). The complaints dive deep into the technical weeds. We've covered a bit of this before, but it's worth reiterating that what we're talking about is significantly more specific than what we've loosely termed goo-filled, hollow-body construction.

The infringement allegations deals with things like specific distribution of mass, the volume of polymer/elastomer relative to body mass, and almost all of that is tied to "a face thickness of less than or equal to 1.5 millimeters." Assuming PXG's patents are valid (not guaranteed), and prior art arguments aside, it's that last bit that would theoretically be the workaround for any arguments citing TaylorMade's ICW irons.

Technical details aside, the updated complaint doesn't mince words in accusing TaylorMade of wrongdoing.

After a reasonable opportunity for investigation and discovery, the evidence will likely show that TaylorMade not only knew, or should have known, about the ’336 patent, but also that TaylorMade knew (or was willfully blind to the fact) that its conduct infringed the ’336 patent, that it lacked any reasonable defense to infringement of the ’336 patent, and that TaylorMade’s egregious conduct was the sort of wanton conduct that stands out from other patent cases and rises to the level of willful infringement.

As we said last time around, this is all part and parcel of patent litigation. With each exchange, the number of complaints grows, and hostility bubbles to the surface. Case in point:

On information and belief, TaylorMade has been and is now actively inducing infringement of at least claim 15 of the ’203 patent in violation of 35 U.S.C. § 271(b) by, with specific intent or willful blindness, actively aiding and abetting others (including retailers and other TaylorMade distributors, several professional golfers, and others) to directly infringe the ’203 patent, including without limitation by: using, selling, offering to sell, and/or importing the P790 Products in the United States. TaylorMade’s inducements include, without limitation, and with specific intent to encourage infringement, knowingly inducing retailers and other distributors to sell the P790 Products within the United States, and knowingly inducing customers and celebrity endorsers to use the P790 Products within the United States, with the specific intent to cause infringement or with willful blindness to the resulting infringement of at least claim 15 of the ’203 patent.

For all patents in play, PXG is seeking relief including judgment that TaylorMade has infringed on each patent, along with profits and damages from "TaylorMade's past and present infringement". It's once again seeking injunctive relief to prohibit the continued sale of the P790 iron. Among other things, PXG is also seeking damages and interest, an award of attorneys' fees, repayment of costs incurred by PXG, and any other relief the Court deems proper.

Finally, PXG has asked for a jury trial on all issues that are triable by jury.

The TaylorMade Response?

PXG has effectively tossed the ball back to TaylorMade's side of the court. For now, it appears that neither side is backing down, so it appears we're heading for a prolonged legal battle.

Whom, if anyone, infringed on what may ultimately be decided by a jury, but there are some factors worth considering:

I'm not one who believes this is attention play by Bob Parsons. I'm reasonably confident that he and his R&D team believe TaylorMade's P790 infringes on several of its patents.
I'm reasonably confident TaylorMade believes it hasn't infringed on anything. It probably also believes several of PXG's patents shouldn't have been granted to begin with. Worth mentioning, the experts we've spoken with have told me that's the case with a majority of the patents granted each year. I'm less convinced it actually believes PXG infringed on its patents.
Bob Parsons' net worth has been estimated at more than 1 Billion (some estimates have it over 3 Billion). Risking upwards of $15 million in legal fees, whether it's to prove a point, show the industry he won't be bullied, or protect his golf company's intellectual property, is likely well worth what is, within his larger picture, a small investment.
TaylorMade has operated in the red for the past several years (projections have it in the black for 2017) and was recently sold to private equity firm KPS Financial. PE firms aren't known for over-spending. Cost-cutting is assumed to be part of the 2018 operating plan, and with big money already committed to its PGA Tour staff, one has to wonder if there's a limit to what the new owners will spend to protect what is for now a single product.

I'm not suggesting either side will blink, but I'd wager it won't be PXG.

Assume there's more to come as it certainly appears this isn't going to end quietly.