Liberty Ammunition, Inc. v. United States

101 Fed. Cl. 581, 2011 U.S. Claims LEXIS 2126, 2011 WL 5150221
CourtUnited States Court of Federal Claims
DecidedOctober 31, 2011
DocketNo. 11-84C
StatusPublished
Cited by15 cases

This text of 101 Fed. Cl. 581 (Liberty Ammunition, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liberty Ammunition, Inc. v. United States, 101 Fed. Cl. 581, 2011 U.S. Claims LEXIS 2126, 2011 WL 5150221 (uscfc 2011).

Opinion

OPINION AND ORDER

LETTOW, Judge.

Plaintiff has brought this patent case pursuant to 28 U.S.C. § 1498(a) with attendant breaeh-of-contraet and unfair-competition claims. At issue are intellectual property rights to the so-called “Green Bullet.” The Department of Defense embarked on a quest for this munition some years ago, seeking a lead-free bullet that was less harmful to the environment than its predecessor but still just as lethal. The U.S. Army has made significant strides in this area, and now such ammunition is standard issue for America’s troops.

Liberty Ammunition, Inc. (“Liberty” or “plaintiff’) claims that the government achieved this success by infringing on its patent. Liberty further alleges that the government violated several non-disclosure agreements (“NDAs”) concerning its patented bullet design. Lastly, it avers that the government is unfairly claiming credit for Liberty’s breakthroughs.

The government concedes that this court has jurisdiction over the patent claim, stated in Liberty’s complaint as Count I, based upon 28 U.S.C. § 1498(a). See Def.’s Mot. to Dismiss Counts II and III (“Def.’s Mot.”) at 3 n. 3. Jurisdiction is contested over Liberty’s two non-patent claims. The government has moved to dismiss those claims for lack of subject matter jurisdiction under Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC”), id. at 1, or alternatively, the government asks the court to dismiss Liberty’s breach-of-contract claim pursuant to RCFC 12(b)(6). Id.

BACKGROUND

On October 21, 2005, Mr. PJ Marx applied for a patent for a new bullet “designed to [584]*584overcome the disadvantages and problems associated with conventional firearm projectiles.” First Am. Compl. Ex. A, at 8. Mr. Marx’s bullet consists of three components: a nose portion, a tail portion, and a surrounding sheath or “interface” that connects these two parts. Id Ex. A, at 1. When the bullet strikes a person or animal (euphemistically referred to as a “soft target”), the interface ruptures and the nose and tail portions separate. Id Ex. A, at 8-9. On July 6, 2010, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,748,325 for Mr. Marx’s invention. Id at 1.

The patent highlights a number of benefits of this design. The interface obviates the need for a lead outer jacket, making the bullet more environmentally friendly and putting less wear on the gun barrel. First Am. Compl. Ex. A, at 8. The bullet’s tripartite design makes it effective against a wide array of targets: it will pass straight through many hard targets (e.g., a car windshield) but will fragment and lodge inside a soft target (e.g., an enemy combatant). Id at 9-10. Moreover, the nose or tail portion can be engineered to carry a chemical payload, such as an anti-coagulant or tracking agent, which may be released upon hitting a soft target. Id Ex. A, at 9. The patent also notes that the new bullet can be manufactured more afford-ably than other customized projectiles currently under development. Id

Both shortly before and shortly after Mr. Marx applied for his patent, he entered into three separate NDAs concerning his ballistics i’esearch. See First Am. Compl. Exs. BD. The first NDA was between Mr. Marx and the “United States Government, Department of Defense.” Id Ex. B, at preamble. This agreement was signed on February 17, 2005 by three individuals: Mr. Marx, Major Glenn A. Dean of the U.S. Army, and John W. Amick. The latter two persons are shown as having a principal place of business at Fort Benning, Georgia, and as signing the NDA on behalf of the United States. Id Ex. B, at 3. The second NDA was signed by Mr. Marx and Thomas A. “Tucker” Campion on June 23, 2005. Id Ex. C, at 3. The document identifies Mr. Campion’s principal place of business as MacDill Air Force Base, Florida. Id Ex. C, at 1. The third NDA was signed by Mr. Marx and Charles Marsh on January 11, 2006. Id Ex. D, at 3. The agreement states that Mr. Marsh’s principal place of business was the Crane Naval Surface Warfare Center, Indiana. Id Ex. D, at 1.

The texts of the Campion and Marsh NDAs are identical except for the name of the countersigning party. See First Am. Compl. Exs. C, D. The Dean NDA is worded slightly differently but has the same gravamen as the other two. See id Ex. B. Each of these NDAs provided that the countersigning party would keep secret all confidential information disclosed by Mr. Marx. E.g., id Ex. B, at ¶¶2.1-.2, 3.1.1 Both Liberty and the government agree that Mr. Marx supplied the Department of Defense with information pertaining to bullet design pursuant to these agreements. First Am. Compl. at ¶ 14; Hr’g Tr. 21:2-8, 48:6-8 (Oct. 4, 2011).2

All three NDAs state that “[njeither Party may sell, transfer, or assign this Agreement except to entities completely controlling or controlled by that Party or to entities acquiring all or substantially all of its assets, without the prior written consent of the other.” E.g., First Am. Compl. Ex. B at ¶ 3.6. When Mr. Marx signed these three NDAs, he was acting as a sole proprietorship. First Am. Compl. at ¶ 14. Since then, his business has undergone a series of transformations. First it became Liberty Ammunition Inc., a Florida corporation; then Liberty Ammunition LLC, a Delaware Limited Liability Company; and lastly Liberty Ammunition Inc., a Delaware corporation. Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss Counts II and III (“PL’s Opp’n”) Ex. 2, at ¶ 10 (Aff. of PJ Marx (Aug. 27, 2011) (“Marx Aff.”)). Mr. Marx [585]*585avers that at each step in this progression, all assets and liabilities of the original business were subsumed in the successor entity. Id. at ¶¶ 11-12. To emphasize this point, on July 11, 2011, Mr. Marx signed a quitclaim deed giving Liberty Ammunition Inc. “all right, title and interest still reposing in me, if any and I do not believe there is any,” in the sole proprietorship. Pl.’s Opp’n Ex. 3, at 1 (deed entitled “Confirmatory Conveyance and Quitclaim of Assets and Liabilities”). For its part, the government notes the lack of contemporaneous documentation for the alleged transmission of the sole proprietorship’s assets and liabilities. Def.’s Reply at 4.

In 2010, the U.S. Army announced the development of the 5.56mm M855A1 Enhanced Performance Round (EPR). Pl.’s Opp’n Ex. 1, at p. 3 of 31. The new bullet is lead-free and improves upon the design of its predecessor, the M855. Id. Since June 2010, the Army has fielded tens of millions of rounds of the M855A1 EPR in Afghanistan. Id. Ex. 1, at p. 22 of 31. According to Liberty, this ammunition was produced by Alliant Techsystems. Pl.’s Opp’n at 9.

Liberty alleges that the M855A1 EPR copies its patented bullet design. First Am. Compl. at ¶8. It further claims that the government violated the terms of the NDAs by disclosing Mr. Marx’s confidential information to potential vendors, including Alliant Techsystems. Id. at ¶ 15; Pl.’s Opp’n at 2, 9. Lastly, Liberty alleges that the government has unfairly taken credit for Mr. Marx’s work. First Am. Compl. at ¶ 20; Pl.’s Opp’n at 8-10.

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Bluebook (online)
101 Fed. Cl. 581, 2011 U.S. Claims LEXIS 2126, 2011 WL 5150221, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liberty-ammunition-inc-v-united-states-uscfc-2011.