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TITLEIST PRO V1 LITIGATION FACT SHEET FREQUENTLY ASKED QUESTIONS

Many questions have arisen in connection with the ongoing litigation between Acushnet Company and Callaway Golf regarding certain patents and Titleist Pro V1 and Pro V1x golf balls. To avoid any misunderstandings, below are some Frequently Asked Questions and Acushnet Company’s responses. Throughout this list, we refer to “Pro V1” golf balls. These responses apply equally to Pro V1x golf balls.

Are all Pro V1 golf balls covered by the injunction?
No.  The injunction only applies to our United States sales of Pro V1 models which are covered by the patents at issue.  We are no longer shipping these products.  In September 2008, we converted production of current Pro V1 models so that they are not covered by the patents in question.  We started shipping these products in November and will continue to ship them until the new 2009 Pro V1 models become available (in the first quarter of 2009); however, there are limited quantities of the non-converted Pro V1 models still in retail inventory.

How can I distinguish between the converted and the non-converted Pro V1models?
Converted Pro V1 models have the same packaging and sidestamps as the non-converted models.  However, there is a small black or red circular sticker or marking on every Pro V1 dozen box and sleeve to identify the converted models as shown below:

stickers

Is there a performance difference between the non-converted Pro V1 golf balls and the converted production models?
No.  While a number of changes in the manufacturing process were required to address the patent issues, performance and quality are indistinguishable from the current products and the converted products have been Tour validated.

Do the converted products conform to USGA Rules?
Yes. Titleist Pro V1 golf balls have always conformed to USGA Rules and these products are no exception.

Must retailers return non-converted inventory to Acushnet?
Acushnet and Callaway have communicated differing opinions on this issue. Our attempts to resolve the difference of opinion with Callaway have been unsuccessful.  Because this issue of whether any retail action is required by the court’s injunction order remains unresolved, we believe that it is necessary to remove this uncertainty from the marketplace.  Accordingly, we have requested that all United States retailers discontinue selling non-converted Pro V1 and Pro V1x golf balls and return to Acushnet all non-converted Pro V1 and Pro V1x golf balls that remain in inventory as of January 1st.

Must consumers return non-converted inventory to Acushnet?
No. The injunction order does not apply to Pro V1 golf balls which have been purchased by consumers. These products conform to USGA rules and are legal for their use.

Can Tour players play Pro V1 golf balls now and after January 1, 2009?
Yes. Tour players can play Pro V1 golf balls with confidence. Pro V1 is and will remain available to all Titleist golf ball players on the worldwide professional tours. Tour events in the United States will be supplied with converted Pro V1 products or 2009 products.

Will New 2009 Pro V1 and golf balls perform differently or be marked differently?
As Titleist has always done throughout its 75 year history, we introduce new and improved golf balls when we have a better performing product. We introduced new Pro V1 products in 2003, 2005, 2007 and will introduce new products in 2009. The New 2009 Pro V1 models will perform differently from and better than the current Pro V1 models. We have tested prototypes extensively with Tour players this fall and player feedback has been extremely favorable. Players on the worldwide professional tours can put the New 2009 Pro V1 models into competitive play when the Tours resume their schedules in January 2009. The New 2009 models will feature different sidestamps and packaging and appear as different listings on the USGA Conforming Ball List.

When can golfers play New 2009 Pro V1 golf balls?
Titleist will launch New 2009 Pro V1 golf balls in the 1st quarter of 2009. The technology and construction of New 2009 Pro V1 golf balls are outside the scope of the patents. In Q1 2009, golfers can learn about the exciting new product improvements via their local golf shop, on Titleist.com and in other Titleist advertising and communications.

Does Callaway use the technology in these patents in its golf balls?
No.

Does the court ruling apply outside the United States?
No. The court ruling does not apply outside the United States.

What is this litigation about?

Pro V1
Titleist introduced the Pro V1 golf ball, based on its own technological advancements and research, in 2000. Pro V1 golf balls incorporate the combination of many Titleist technologies developed and accumulated over the past 20 years. Acushnet Company is the golf ball industry technology leader, with over 650 active golf ball patents – more than any other manufacturer. Over 65 of these patents cover the Pro V1 family.

The patents
Spalding received 4 patents in 2001 and 2003, well after the Pro V1 was developed and introduced. Callaway acquired these patents when they purchased Spalding in 2003. We believe these patents are invalid and should never have been issued in the first place. The U.S. Patent and Trademark Office agrees with Acushnet. It has reexamined the patents and issued final actions that all 4 of these patents are invalid and should never have been issued.

The trial
Callaway filed suit in 2006, claiming that our Pro V1 golf balls infringe these 4 patents. In 2007, a jury found partially in favor of Callaway and partially in favor of Acushnet.

The appeal
We disagree with the trial court’s ruling, especially as the court did not permit the jury to consider very important evidence, including the fact that the U.S. Patent and Trademark Office has issued actions that all four patents are invalid. We believe that this resulted in the trial court coming to the wrong conclusion. We have appealed this case to the Federal Circuit Court of Appeals, who will consider this important evidence.

The injunction
Callaway asked the lower court for an order stopping Acushnet from selling golf balls covered by the patents. We believe that this was inappropriate for several reasons, including the jury’s “split decision”, the U.S. Patent and Trademark Office’s actions that all 4 patents are invalid, Callaway’s years’ long delay in bringing suit, and the fact that Callaway does not use these patents. The lower court granted Callaway’s injunction request and the Appeals court recently denied our request to put this injunction on hold pending the appeal. As a result, Acushnet may not sell Pro V1 golf balls covered by the patents after January 1, 2009.

Litigation next steps
The Appeals Court will next review these complex issues in far greater detail and will likely render a decision sometime late in 2009.

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