Driving Ahead

Recreational golf tends to be a very gentle game. You wake up early on a Sunday morning, mosey over to the local course with a buddy or two and spend the next few hours knocking a small white dimpled ball around a lush green landscape. You end up competing more with yourself than your golfing partners.

On the business side, golf is a blood sport. The companies that produce the clubs and balls stored in your car's trunk spend a lot of time at each others' throats--mostly over claims of patent and trademark infringement.

Litigation between companies in this industry is par for the course. What fuels these suits is an ber-competitive market in which consumers are constantly in search of a ball or a club that will help them hit farther and more accurately. Companies invest millions of dollars in R&D and marketing to help consumers achieve those objectives with their products. It's up to the legal departments of these companies to protect that investment.

For Callaway Golf Co., one of the most recognized brands in the industry, that job falls on the shoulders of Texas-born Michael Rider, the company's general counsel. Rider joined the San Diego-based company in 1996 as associate general counsel after managing antitrust litigation for a number of years as a senior attorney for American Airlines. Before that he was an associate at Gibson, Dunn & Crutcher.

Q:I understand that you initially wanted to be a pharmacist.
A:I did. When I was in high school I worked for a small independent pharmacy as a delivery boy. And being exposed to that area, I thought it was a really good career. Pharmacists were entrepreneurs, they got to make their own hours and they made a pretty good living. Those were all things that appealed to me. I actually earned my undergraduate degree in pharmacy from the University of Arizona.

Q:How did you end up in law?
A:By my fourth year in college I realized I wasn't that interested in owning an independent pharmacy or working for a chain. My best friend always had planned to go to law school, and we shared a lot of the same traits in terms of being outgoing and analytical and being comfortable on our feet. So I took the LSAT and went to law school at the University of San Diego.

Q:How did you end up at Callaway?
A:I was very happy at American Airlines, but Callaway was a great opportunity for a number of reasons. First of all, it was a smaller company, so the opportunity to have a bigger impact was obvious. And I got to work again with Steve McCracken [a former partner at Gibson Dunn who was GC of Callaway when Rider joined]. It was an opportunity to get back to San Diego, where my wife and I had met in law school. But probably most important, it was Callaway--a small company with a big brand.

Q:Are you a good golfer?
A:I'm OK. When I was hired at Callaway Golf, I had never picked up a golf club in my life. Thankfully, Callaway didn't hire me to be a golfer. They hired me because I knew how to manage litigation.

Q:Tell me about your role as GC.
A:Well, I really have three main responsibilities. The first one is to direct the company's litigation, and right now we have a very full plate. We're dealing with a lot of litigation and a lot of IP disputes. My second job is to serve as the company's primary antitrust lawyer. My third job is to manage the department.

Q:There seem to be a lot of patent infringement suits being filed in the golf industry.
A:It is a very, very competitive business. If you think about it, we're competing against much bigger companies [such as Acushnet, the company that owns the Titleist brand; Adidas; Nike; etc.] for a share of the market. One of the areas in which we compete is obtaining and enforcing our IP rights.

Q:On average, how many patents are associated with a modern-day ball or club?
A:You know, a club or a ball could be protected by several different kinds of intellectual property, including patents. So you could have utility patents, design patents and trademarks that help protect a product. We have used copyrights in the past to protect features of our golf clubs. You could be talking about patents based on materials, based on form and based on performance and function.

Q:You're pretty aggressive on the IP front.
A:We are aggressive in the sense that we do file for and obtain a lot of patents, both in the U.S. and worldwide, to protect ventures that we've created. It is our job to protect the company's interests with respect to that IP.

Q:How do you decide what to patent?
A:We have a group whose job it is to innovate. We've got a product development group whose job it is to turn those innovations into products. I have a pretty darn good legal staff that can recognize what's patentable among those innovations and among those products.

Q:Is counterfeiting a big problem in your industry?
A:Absolutely. Knockoffs used to be the only problem. Now counterfeiting is the big issue. It's also moved from Taiwan to China. And really the vast majority of the counterfeiting today occurs in China, and in fact most of it occurs online through some of the more popular auction sites.

Q:How involved is your team in working on the endorsement deals with the pros?
A:Our department supports the Pro Tour department, which is the frontline negotiator of those deals. They identify pros with whom we seek endorsement relationships and manage those relationships. We're in a support role. That support role can range from simply writing the contract--if it is a relatively straightforward deal--to sitting next to the vice president of Pro Tour if the negotiation is more difficult.

Q:Jack Nicklaus recently said that some of the technological innovations that allow players to hit farther are hurting the game. What's your response?
A:Our goal is to help every golfer have more fun, and we've been able to do so with a lot of the innovation that we've brought to the table in terms of drivers and golf balls.

Q:What do you think of Callaway's new square-head driver? Does it really help you hit a straighter shot?
A:The FT-i is a terrific club. It has helped my game remarkably.

Q:What is the most memorable course you have ever played?
A:The old course at St. Andrews in Scotland. It was the most amazing experience. It started at about 2:30 in the afternoon, which meant we finished the round at about 7 p.m., when the sun was low in the sky. There is really no experience quite like walking down the 18th at St. Andrews.

Q:How did you do?
A:I bogeyed the 18th hole. I was pretty darn happy about it. I drove it right down the middle. It was only a three-putt that kept me from parring it.

Staff Writer

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