Out of Bounds: Court Rules Against Golf Tailor’s Counterclaims in IP Dispute

In February, GolfBestBuy filed suit in California’s Federal Courts against Golf Tailor, accusing Golf Tailor of purchasing their clubs through authorized reseller Golf Gifts and Gallery Inc., and then, after gauging customer interest, going to a Chinese manufacturer to produce counterfeits. Counterfeit goods from China continue to hinder U.S. markets, and cost U.S. businesses billions a year in lost profits. According to the suit, Golf Tailor bought more than 100,000 clubs from GGG at a unit price of $17 apiece and then sold the clubs at $99.

On Wednesday, July 5, 2017, U.S. magistrate Judge Laurel Beeler ruled that support for 13 counterclaims and five affirmative defenses by Golf Tailor lacked proper factual support. For Golf Tailor’s counterclaims one through 12, their arguments centered on allegations that their co-founder and CEO, Tim Oyler, created the product designs for the club. Judge Beeler ruled that these allegations failed because simply claiming that Oyler designed the club does not prove or even support such a claim.

When dismissing Golf Tailor’s counterclaims, Judge Beeler stated “where the central question is something like ‘Who designed it?’ repeating the terse assertion that, ‘I designed it,’ or equivalently that, ‘It was X’s design,’ is raw conclusion.”

Golf Tailor’s Defend Trade Secrets Act counterclaim was also dismissed without leave to amend, as Judge Beeler found that by the time DTSA was enacted on May 11, 2016, Golf Tailor had already lost any trade secret it had on the golf club. DTSA creates a federal, private, civil cause of action for trade-secret misappropriation. It gives American companies the opportunity to protect against and remedy misappropriation of important proprietary information in federal court. Judge Beeler ruled that Golf tailor had to leave to replace the DTSA claim with a California trade secrets claim.

It was also ruled that Golf Tailor’s five affirmative defenses were without merit as well. For three of Golf Tailor’s defenses — inequitable conduct, copyright invalidity and unclean 10hands — centered allegations that Oyler was the author of the designs, which was previously thrown out for Golf Tailor’s counterclaims. The affirmative defense of improper venue was agreed to be moot, and the defense of copyright misuse was also ruled deficient.

 

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