Callaway 2010 Annual Report Download - page 22

Intellectual Property
The Company is the owner of approximately 3,200 U.S. and foreign trademark registrations and over 2,500
U.S. and foreign patents relating to the Company’s products, product designs, manufacturing processes and
research and development concepts. Other patent and trademark applications are pending and await registration.
In addition, the Company owns various other protectable rights under copyright, trade dress and other statutory
and common laws. The Company’s intellectual property rights are very important to the Company and the
Company seeks to protect such rights through the registration of trademarks and utility and design patents, the
maintenance of trade secrets and the creation of trade dress. When necessary and appropriate, the Company
enforces its rights through litigation. Information regarding current litigation matters in connection with
intellectual property is contained in Item 3—“Legal Proceedings” below and in Note 17 to the Company’s
Consolidated Financial Statements, “Commitments and Contingencies—Legal Matters.”
The Company’s patents are generally in effect for up to 20 years from the date of the filing of the patent
application. The Company’s trademarks are generally valid as long as they are in use and their registrations are
properly maintained and have not been found to become generic. See below, “Certain Factors Affecting
Callaway Golf Company” contained in Item 1A.
Licensing
The Company from time to time, in exchange for a royalty fee, licenses its trademarks and service marks to
third parties for use on products such as golf and lifestyle apparel, watches, travel gear, rangefinders and practice
aids. With respect to its line of golf and lifestyle apparel, the Company has current licensing arrangements with
Sanei International Co., Ltd. for a complete line of men’s and women’s apparel for distribution in Japan, Korea,
China and other Asian Pacific countries, and Perry Ellis International for a complete line of men’s and women’s
apparel for distribution in the United States, Canada and Mexico.
In addition to apparel, the Company has also licensed its trademarks to, among others, (i) IZZO Golf for
practice aids, (ii) TRG Accessories, LLC for a collection primarily consisting of travel gear, (iii) Nikon Vision
Co., Ltd. for rangefinders, (iv) Sweda Company, LLC for a collection of padfolios, pens and other gift items for
the corporate market, and (v) Walman Optical, for a line of prescription Callaway eyewear. In addition, the
Company designs and sells its own line of footwear and eyewear, and has entered into buying service agreements
with Advanced Manufacturing Group Ltd. for footwear and MicroVision Optical Inc. for eyewear.
Employees
As of December 31, 2010, the Company and its subsidiaries had approximately 2,100 full-time and part-
time employees. This number was reduced from 2,300 full-time and part-time employees as of December 31,
2009, in part due to the Company’s restructuring of its golf club and golf ball manufacturing and distribution
operations, which was announced during the third quarter of 2010, as well as cost reduction initiatives intended
to mitigate the negative impacts of the economy on the Company’s results of operations. These reductions were
offset by an increase in personnel as a result of the Company’s efforts to expand operations in regions outside the
United States. The Company also employs temporary workers as the business requires.
The Company’s golf ball manufacturing employees in Chicopee, Massachusetts, are unionized and are
covered under a collective bargaining agreement, which expires on September 30, 2011. In addition, certain of
the Company’s production employees in Canada and Australia are also unionized. The Company considers its
employee relations to be good.
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