U.S. Loses Multi-Million Dollar Patent Suit - Fordham Intellectual Property, Media & Entertainment Law Journal
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U.S. Loses Multi-Million Dollar Patent Suit

U.S. Loses Multi-Million Dollar Patent Suit

Florida-based ammunition manufacturer, Liberty Ammunition, won a $15.6 million judgment against the United States government for infringing upon its “enhanced-performance-round” bullet patents.The manufacturer filed suit in June 2011, alleging the Department of Defense had copied features from its design patent for lead-free “enhanced performance round” bullets.  The court narrative detailed how the army began developing lead-free bullets after the Vietnam War but struggled to find an ideal product.  Liberty founder and inventor, P.J. Marx, previously worked in the music industry and held several patents for guitar assembly products.  He became aware of the government’s design struggles and began developing lead-free bullets after the September 11th terrorist attacks.

Marx met with government officials in 2004 to discuss commercializing his products with the army and provided several product samples.  The parties signed non-disclosure agreements, agreeing to “protect Mr. Marx’s proprietary technology.”

In 2005, Marx opened his own ammunition business, Liberty Ammunition.  When he filed patents for his designs later that year, the army was still in the process of evaluating the products he had provided.  The government eventually partnered with Minneapolis-based aerospace and defense contractor, Alliant Techsystems Inc., known as ATK.

Liberty claims the government infringed upon Marx’s designs to create the “Green Bullet” technology used in their products with ATK.  This includes both the M855A1 bullet, which was first used in Afghanistan in 2010, and the most recently developed prototype, the M80A1.

U.S. Federal Court of Claims Judge Charles Lettow ruled the government used Marx’s products’ “advanced characteristics” to design their bullets with ATK.  In addition to the $15.6 million in damages, the government is required to pay Liberty Ammunition a 1.4-cent royalty payment on every bullet it buys and receives until Marx’s parent expires in 2027.

Liberty’s Chief Executive Officer, George Phillips, did not provide an estimate for how much the company will receive in royalties, but the Department of Defense’s 2015 Budget Estimate indicates it anticipates purchasing at least 65 million M855A1 bullets this fiscal year.

On a second issue, an alleged breach of contract relating to the 2004 non-disclosure agreements, Judge Lettow sided with the government.  He ruled the signatories lacked both express and implied contracting authority necessary to ratify the agreements, rendering the NDA’s unenforceable.

The government is considering an appeal, according to the Army Times. It has until February 19th to decide.

Photo Credit: Jared Cuffe – via Creative Commons
Link to his site: https://www.flickr.com/photos/casualty/

Bronte Turk

Bronte Lawson Turk is a second year student at Fordham Law and proud member of the Intellectual Property, Media and Entertainment Law Journal. Prior to attending law school, she was the executive producer of Annenberg TV News, the University of Southern California’s campus news station where she managed a staff of more than 200 student journalists. Past media internships include CBS News, ABC News & Paramount Pictures.