The U.S. government will pay a Florida ammunition-maker more than $15.6 million after losing a patent-infringement lawsuit regarding the design of M855A1 and M80A1 rounds.
Liberty Ammunition also will receive royalties of 1.4 cents per round on that ammunition until the patent expires in 2027, according to the U.S. Court of Federal Claims ruling, issued in late December and first reported in the Bradenton (Fla.) Herald. That could mean several millions more in payout: The government, primarily the Army, ordered more than 158 million of the M855A1 rounds in fiscal year 2013, the lawsuit states, and Army budget documents show plans to purchase at least 65 million M855A1 rounds of various types in fiscal 2015.
The government is "considering its options on appeal," Justice Department spokeswoman Nicole Navas said in an email. Army public affairs personnel would not comment, citing pending litigation.
"We're very satisfied with the judgment," George Phillips, Liberty's chief executive officer, said Wednesday. "The [court] upheld our contention that the government had violated our patent ... and PJ Marx, our inventor and founder, is now acknowledged as the inventor of enhanced-performance-round technology.
Marx, an established inventor in the music industry who began pursuing a better bullet after the Sept. 11 terrorist attacks, first spoke with Army officials about his Enhanced Performance Incapacitative Composite round in 2004, the ruling states. Marx filed a patent application on the EPIC round in 2005 which five years later became Patent No. 7,748,325, the patent at the heart of the lawsuit.
Judge Charles Lettow found the government's ammunition design infringed on the patent, the rights of which Marx assigned to Liberty, a company he founded in 2005. Lettow did not side with Liberty on allegations that the government violated three nondisclosure agreements made between Marx and various military officials during the ammunition-development process. The NDAs weren't ratified by the Army or U.S. Special Operations Command, Lettow ruled, and thus did not constitute enforceable contracts.
Phillips would not put a figure on the possible total compensation through 2027 but said he expected government ammunition purchases to remain fairly constant over that time period.
The lead-free 5.56mm EPRs "improve hard and soft target performance" while containing "an environmentally friendly projectile," according to an online fact sheet from Army Acquisition Support Center. The Army began shipping the so-called "green bullet" to Afghanistan in 2010, replacing M855 ammunition that had been developed after the Vietnam War and entered into wide use in the early 1980s.
Liberty filed its suit in 2011. The case reached trial last June, with closing arguments in October.
Kevin Lilley is the features editor of Military Times.
