PXG Sues TaylorMade for Patent Infringement

Per Bob Parson’s Twitter account, PXG has filed a lawsuit in federal court against TaylorMade Golf, citing “many” patent infringements resulting from the company’s new P790 iron. While neither TaylorMade nor PXG has offered any official statement, one has to think the basis for the suit has to do with the injection filled, hollow-body construction that is the foundation of most PXG products. While PXG uses thermoplastic elastomer and TaylorMade uses a TPU-based SpeedFoam, if the patents are broad enough, the material won’t matter. This case will likely boil down to process and construction, not the material composition of the goo.

Through the proverbial grapevine, MGS has learned that PXG anticipated this day would come, but it would have been impossible to foresee which OEM would step far enough over the line to prompt this response from Parson and PXG.

Some knee-jerk pundits and keyboard jockeys will (and already have) falsely label Parsons a “jerk” or “bully” based on the limited information shared in his tweet. Not that the Twittersphere is a place where people ever cast false aspersions, but let’s be clear - Bob Parsons had to do this, if for no other reason than to make it abundantly clear, he’s not going to be pushed around by any company, big or small. His entire golf business is built on this technology, if somebody else can use it, it’s a problem.

Failure to protect the defining technology upon which PXG clubs are based would invariably open up the floodgates; leaving the technology free for any OEM to mimic or copy without fear of recourse.

With Parsons pursuing a suit, a line has been drawn in the sand. In protecting the primary asset, Parson’s removes any doubt as to his position or the lengths he’ll go to secure the viability of PXG’s defining technology.

Moreover, it’s a proxy statement within the industry of David defending himself against Goliath. Often smaller (by market-share) OEM’s can’t swallow the massive legal costs necessary to engage in what could be a prolonged, and costly, legal process. Financial resources don’t pose the same issue for Parsons. Should PXG prevail, it would be a massive blow (and more than a little embarrassing) to TaylorMade’s efforts to regain momentum after losing its position atop the industry this year to rival, Callaway.

That said, it’s reasonable to think a drawn out legal battle is exactly what TaylorMade’s new owner (private equity firm KPS Capital purchased TaylorMade for $425 Million in May) wants to avoid – and should it want this matter to disappear quickly, that would likely work in PXG’s favor. If the irons go away, I suspect the lawsuit does too.

The upside for TaylorMade, and indeed the risk for PXG is that consumers may link the two technologies. If PXG is viewed as the same as TaylorMade, its perceived performance advantage would be significantly and perhaps irreparably diminished.

There’s also a possibility PXG could bring suit against retailers distributing TaylorMade’s irons, a maneuver which could put both entities (TaylorMade and retailers) in a difficult and unenviable situation – and because PXG isn’t sold via the same channels, it’s a less complicated move for Parsons. Regardless of the legal path Parson’s takes, it would be a mistake to underestimate his business acumen or passion for his company.

To be certain, golf companies sue or threaten to sue, each other with alarming regularity. To no small degree, the action itself cements PXG’s position within the industry. It’s now part of the status quo.

The truth of the matter is that sometimes the claims made in lawsuits like this are valid, sometimes they’re about little more than attention getting, and in other cases, about leveraging nonsense to gain a competitive advantage. Which this will prove to be remains to be seen.

More information as it becomes available.