Bad BUSINESS
The Monday morning after this year's Masters, the phone rang in the Kennett Square, Pa., office of Dr. Joe Braly. "Hey, Joe," the caller said. "How about that—Jack Nicklaus and Ray Floyd socking the ball 300 yards with their new Bridgestone J's drivers? Say, Joe [cough, cough], do you happen to know who's doing the casting of those driver heads?"
Other, similar calls were made to Braly that week. They were from American golf equipment manufacturers hoping to save a little time and trouble. If the suddenly celebrated Bridgestone club heads were being cast in Korea or Taiwan, U.S. manufacturers could simply go straight to the casting company and very probably buy the same heads. There would have to be cosmetic changes, of course, niceties such as removing the name Bridgestone.
Braly, who is an equipment consultant to the PGA Tour and to several manufacturers, including the Japanese company Bridgestone, chuckled at the questions. "Nobody will ever learn from me," he said.
No matter. Within days of that first phone call to Braly, according to industry sources, the following scenario, or one very much like it, was played out.
Two American businessmen board a jet for Tokyo, one of them carrying a briefcase. Inside the briefcase is a heavy metal object wrapped in a tan sock.
After a brief layover in Tokyo, the two men fly on to Taipei, Taiwan. They clear customs and are met by a young Taiwanese man who escorts them to a luxury sedan of Japanese make.
The drive takes a few hours. The steep-banked, elevated road winds through small villages and past rice paddies, where peasants toil in water up to their knees. On the outskirts of Kaohsiung, 175 miles south of Taipei, the driver slows to negotiate the narrow streets clogged with people on bicycles.
Finally, the car reaches the Kaohsiung trade zone. The driver shows a pass to a guard, drives two or three blocks past warehouses and factories, and parks the car outside a nondescript building.
Inside, the Americans—one of them holding the briefcase—are ushered up a narrow staircase to a conference room. Here they are received by a middle-aged Taiwanese executive and his translator, who invite them to sit down and partake of tea or coffee. An engineer and his two assistants join the group.
They make small talk for 45 minutes. Then the executive stands, bows and shakes hands with the Americans, and leaves the room with the translator. The Americans are now alone with the engineer, who speaks English, and his assistants, who do not.
The American holding the briefcase opens it and takes out the hard object in the tan sock. He pulls off the sock, revealing a prototype head for a Bridgestone "J's Professional Weapon" driver, the club used so effectively at the Masters by Nicklaus and Floyd. "This is the club I would like you to make," the American says. "Can you do it?"
The Bridgestone J's drivers are not protected by patents, so nothing in the foregoing scenario is illegal. But golf industry insiders say it wouldn't matter if the clubs were patented or if for that matter, they had seven-digit patent numbers stamped on every surface. Someone would copy them. It's called "knocking off" the product, and for the past 15 years or so it has been standard practice in the golf business.
That explains—if you've ever wondered—why the catalog you get in the mail advertises a cavity-backed, perimeter-weighted iron that looks like a Ping, plays like a Ping, even quacks like a Ping...but is called a Pong.
It explains why those metal woods in the barrel at Harpo's Discount Golf Store look just like Taylor Made clubs, right down to the dimples on the side-walls, the white score lines on the face and the distinctive brackets around the model name.
And it explains why the golf industry landscape is littered with lawsuits, injunctions and threatening letters from patent attorneys. It's why Wilson sued Dunlop Slazenger for swiping a dimple pattern on a golf ball and why Spalding sued Wilson over an optical brightener used in Ultra golf balls.
"The golf business used to be a gentleman's business, but it's becoming more cutthroat," says Mark Sullivan, publisher of Golf Pro Merchandiser, a trade publication. "It's hard to be gentlemanly when people are knocking off your products."
Braly, the consultant, puts it a little more strongly: "There's just no ethics in the golf business at all. In polite company we call the knockoff artists 'second-level' people, but what those people really are, are——thieves."
Braly is referring to the out-and-out pirates of the business. The respected names in golf equipment, the manufacturers whose names have graced clubs and balls for generations, of course, are not thieves. Borrowers maybe, but not thieves.
"We did have one blade which was known internally as the "KO" model, which stood for 'Knockoff'," confesses a former sales director for a well-known American golf manufacturer. "It was a forged blade—in both senses of the word." He adds, "For some companies, their whole R and D budget is just to walk up and down the aisles at the PGA Merchandise Show to see what's worth knocking off."
And how about MacGregor's Response ZT putter, that bizarre ball-roller that looked like a vacuum cleaner attachment?
When Nicklaus used one to conquer Augusta's slippery greens at the 1986 Masters, sales soared. In the 18 months it took for a patent to be issued, according to Clay Long of MacGregor, "Every golf company of any importance had at least one oversized putter in its line."
Not that MacGregor is above borrowing. In 1983, Acushnet introduced the Titleist 384 golf ball, notable for its 384-dimple pattern and longer carry. Nicklaus, who was a part owner of MacGregor and played a MacGregor ball, summoned his engineers, and—one imagines—fixed them with a Bear Stare. "Guys who are not exactly household names are blowing it by me," he told them.
The grumpy Bear started playing a Titleist 384 in tournaments, which caused panic at MacGregor's headquarters in Albany, Ga. "The guys in charge of golf balls here were literally working around the clock," recalls Long, the company's research and development head. "We had a machine shop up in Perry [Ga.]—where they were making molds with 392 dimples instead of 384—trying to get essentially the same performance without infringing on patents. They had airplanes flying in tooling, people picking up stuff at the airport. It was an emergency."
Six weeks later, Nicklaus was outdriving his competitors again, but with a ball called the "Jack Nicklaus Muirfield." (A few years later, MacGregor stopped making Nicklaus's balata ball and he went back to a Titleist.) Other manufacturers played the catchup game, too, keeping the dimple counters in the Patent and Trademark Office busy registering subtle changes in configuration and shape, all designed to keep pace with Acushnet. "That kind of thing happens all the time," says the marketing director for a golf company. "Whenever somebody comes up with a good idea, there's a stampede."
Nowhere is this more true than in the golf ball business, where a scientific breakthrough can significantly alter shares of the $500 million American ball market overnight. A case in point is U.S. Patent 3,819,768, "Golf Ball Cover Compositions Comprising a Mixture of Ionomer Resins," better known in the trade as the Spalding patent or the Surlyn patent.
Surlyn itself—used at first as a coating for electrical wiring, among other things—was patented by E.I. du Pont de Nemours and Co. in 1966. A Spalding chemist, Bob Molitor, began experimenting with the stuff in the early '70s. Molitor was trying to solve the "cold-cracking" problem—that is, the tendency for balata rubber golf ball covers to turn brittle in cold temperatures. Against the advice of Du Pont's chemists, who thought it wouldn't work, Molitor tested various blends of Surlyn's two main ingredients, zinc and sodium ionomers. He came up with what the patent office calls an "unexpected result"—a perfect combination of ionomers that not only solved the cold-cracking problem but also added durability and distance to the flight of the ball.
The end product of Molitor's breakthrough was the Spalding Top-Flite golf ball, a series that has since become golf's alltime best-seller. By the late '70s, virtually all the major ballmakers had responded with Surlyn balls of their own—even Acushnet, manufacturer of Titleist balls, then the industry titan. In response, Spalding's patent attorneys got busy, and the. '80s became a decade of golf ball litigation. Ram and Wilson have since settled with Spalding and are licensed to use the formula. Ram has a license from Spalding but has chosen not to use the formula.
In the main event, eight years of lawyering between Spalding and Acushnet resulted last year in a court judgment for Spalding. Industry insiders say that the Spalding victory, if upheld in federal appeals court, could cost Acushnet as much as $100 million.
The golf ball business is highly technical; the golf club industry is less so. Even today, some custom-made clubs are made by individual craftsmen, throw-backs to the days when a clubmaker was a Scotsman at a workbench.
"There's a lot of mystery and black art with clubs," says Braly. "As opposed to pure science."
Before Karsten Solheim, there was also a lot of skill involved. When the former General Electric engineer with a Colonel Sanders goatee applied for his first golf patent in 1959—the putter that made the famous ping noise—no one anticipated the impact his inventions would have on the equipment industry.
It wasn't just that Solheim's innovations—perimeter weighting, offset hosels, etc.—would inspire imitators, it was how he made his clubs. He didn't employ broaching machines and skilled workers to carve his iron designs out of flat-back steel forgings, as was then the custom. He applied the investment casting or "lost wax" technique and cast his heads from molds. With the new process, engineers could design intricate back patterns, cutouts, cavities—even the face score lines and the graphic imprinting—right into the casting.
The advantages were obvious—repetition and economy, for starters. The principal disadvantage was that any competent investment casting house could take a set of heads and duplicate them inexpensively. "It didn't matter how intricate you made the designs, they were super easy to knock off," says one marketing director. "And you didn't have to know anything about golf."
Ironically, it took time for other manufacturers to catch on. "I made such ugly clubs," says Solheim, joking, "that they left me alone for years. They didn't start knocking me off till they saw I was getting most of the business."
When the manufacturers did begin to copy him, they went far beyond the "borrowing" so prevalent in the industry. Ping look-alikes started popping up all over the world, which kept Karsten Manufacturing's patent attorneys on the run. "Some of the copies have the minor flaws that were originally in my clubs," says Solheim now. "So you know where they started."
Walking through a golf shop today is like a stroll through a Karsten sculpture garden. His 1972 patent for a "Correlated Golf Club Set" expired last year, so anyone is now free to exploit his ideas. It is still unlawful, though, to deceive customers with blatant look-alikes and counterfeit trademarks—areas protected by "design patents" and "trade dress" laws. "Twenty-five years ago, our patents were very strong, but nobody wanted to infringe on a silly name like Ping," says Karsten's manager of patents and trademarks, Bert Haynes.
Some sectors of the industry, such as shaft manufacturing, have proved immune to knockoff artists. "To build a plant to make golf shafts costs about $30 million," says Tom Garrity of Brunswick Golf. "So people aren't jumping into it." As a result, ripoff artists simply buy the shafts and rip off the rest. Most of the chicanery takes place in Korea or Taiwan because mainstream American companies started manufacturing there in the '70s to cut labor costs.
"It's like a den of thieves over there," one American executive says of Taiwan. "The house that is doing the investment casting for one company doesn't hesitate to sell another company heads right out of the same tooling."
Braly knows all about that. In the mid-'70s, he was a partner in a club manufacturing company called Console. His clubs were being made in a plant in Mil-ford, N.H., when Braly went to Taiwan to investigate other manufacturing options. He made the obligatory pilgrimage to an investment casting house in Taiwan, where he met the company president and went through the customary tea ritual. He was just about to unveil the Console club head he wanted to manufacture when he spotted the same club head.
"There in the production line were thousands of the exact same Console club heads, with the same name and everything," says Braly. "They were already producing my heads for a Japanese golf company. It's not industrial espionage. You have to be a little bit covert to call it espionage."
Why so bold?
"It's the only way you can survive in the golf business," explains one veteran of the stick-and-ball wars. "The products have such short cycles, and you have so many small-to-moderate-sized companies out there. All you can do is see what's hot, knock it off and go to market saying, 'It's just as good as a Xerox.' "
Another motivator is patent law, which, says Braly, "is so much in favor of the infringer and so difficult for the fellow with the patent. If somebody in this business has something that you want to manufacture, you go ahead and manufacture. It's just an accepted business risk."
If there's no patent, of course, the risk is practically zero. Which is why our hypothetical Americans on the road to Kaohsiung might have met a car heading back to the airport carrying some MacGregor golf engineers. After all, Nicklaus had announced at Augusta that he was giving his Bridgestone J's drivers to his "people" to analyze. "I don't know exactly what it's made of," he said. "But we're trying to copy it as fast as we can."
Hank Rojas, Bridgestone's executive vice-president, shrugs off the Nicklaus-MacGregor challenge. "It will be very, very difficult to market because of the process of wrapping the shaft and the weighting of the head," he says. "We don't think they're going to be able to put the two things together in the same way and come out with a club that performs as well."
MacGregor's Long notes, however, that there was nothing about the J's driver that Bridgestone thought worth patenting. "From a physics standpoint, I don't think there's anything special there to increase distance."
What? No breakthrough?
"A breakthrough in hype, maybe," Long says, and laughs.
Down the line, somebody else will be copying both of them. Look for it this fall at your local discount golf shop: the Stonebridge "K's Professional Weapon" driver.
That's "K," as in knockoff.
ILLUSTRATION
DANIEL TORRES
Any good idea, even a patented one, is fair game for industry spies.
ILLUSTRATION
DANIEL TORRES
Dimple patterns determine the fate of a golf ball, in flight and in court.
ILLUSTRATION
DANIEL TORRES
When a patent has been infringed, manufacturers' attorneys do battle.