The saga of Rory McIlroy’s brand choice(s) for the future hasn’t been the only unanswered question to emerge from Nike’s shock withdrawal from the golf equipment industry in August 2016. One of the many issues has been Nike’s notable portfolio of equipment patents, and what on earth was going to happen to them. After all, whether it’s the Super Fin Driver or smart clubs, Nike never missed a trick in terms of patenting such innovative technology.
Cue some market aggression from Ping, with confirmation that Phoenix-based Karsten Manufacturing Corp – the parent of the Ping golf brand – have purchased at least five patents, all of which relate to club technology.
“We see this as an opportunity to add utility patents to our already significant intellectual property portfolio,” Ping President John K. Solheim said in a statement picked up by the Phoenix Business Journal. “Our team can use these patents, along with our existing intellectual property, to our competitive advantage, accelerating our ability to further technology that ultimately leads to higher performing, score-lowering golf equipment.”
The terms of the sale(s) have yet to be disclosed, but, interestingly, a spokesman for Ping has said that they have in fact purchased considerably more than five patents from Nike, which will reflect in patent records in due course.
According to the U.S. Patent and Trademark Office, Nike has just over 1,230 patents related to golf, although many of these relate to apparel and footwear – a niche in which Nike will continue to be an active participant, and it is thus expected that they will retain the relevant patents within this domain.
This was underscored by a statement released by Nike brand president Trevor Edwards last August, which stated: “We’re committed to being the undisputed leader in golf footwear and apparel. We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf.”
However, a few hundred patents relating to golf clubs and balls remain under Nike’s possession, and there is thus still plenty of water to flow under the bridge.
“As a part of our exit from the golf equipment business we have sold certain patent assets that were developed in connection with the innovations created as a part of Nike’s golf club and ball business,” a Nike statement read. “We are proud of the innovations created by the Nike Golf team and are happy that consumers will still be able to benefit from those patented innovations.”
The catalyst – albeit unconfirmed by the company itself – for Nike’s withdrawal from the equipment business has been a steady decline in golf-related sales from the dizzy heights of 2013 ($792 million). In the 2016 fiscal year alone, there was an 8 per cent drop-off from $769 million to $706 million. It’s never that simple, but it would seem as though Nike’s decision last August is indicative of the fact that clubs and balls were seen as a drag on their prosperity.
Which makes Ping’s acquisition of these patents – perhaps with more to come – all the more interesting. Are they catching a falling knife? Or are they picking up some decent scraps at firesale prices, with a chance of maximizing the value of a (former?) competitor’s ingenuity? Only once the terms of the deal become clear will we have a better picture.
But one thing is for sure: the dissolution of Nike from the equipment milieu will be fascinating to observe, with repercussions and gains likely to be felt/had right across the industry as events unfold.
We’ll be keeping a close eye on proceedings, so keep it here if you don’t want to miss a beat.