True Velocity sues Sig Sauer, alleging stolen trade secrets – MASHAHER

True Velocity Ammunition and sister company Lone Star Future Weapons sued gunmaker Sig Sauer, alleging the company stole trade secrets.

The companies are competing against each other to produce the U.S. Army’s Next-Generation Squad Weapon worth an estimated $4.5 billion. Sig Sauer won that competition in April 2022. Those first weapons from Sig Sauer were delivered to soldiers from the 101st Airborne Division at Fort Campbell, Kentucky, last month.

The complaint filed on April 9 in Vermont Superior Court lays out True Velocity’s claim that Sig Sauer “brazenly and wrongfully misappropriated Plaintiff’s trade secrets to obtain an unfair competitive advantage.”

Lone Star originally teamed with General Dynamics Ordnance & Tactical Systems in 2021 for the NGSW competition where GD-OTS transferred its technical data and marketing materials for the LMMG and NGSW to Lone Star. Lone Star then took over as the prime contractor in the NGSW competition and further design activities of the program.

GD-OTS, over nearly two decades, developed trade secrets through research and development in Vermont at two sites focused on armaments systems and vehicle survivability. This included the LMMG which “eliminates the gap between the lighter and heavier weapons systems” currently fielded by the U.S. military and allies, the complaint states.

At the heart of the LMMG is a proprietary “revolutionary mitigation system called Short Recoil Impulse Averaging (SRIA),” according to the complaint. “Historically, mitigating recoil forces of machine guns require either adding mass to a weapon systems or length to a receiver,” the document explains. “The SRIA technology advanced by GD-OTS and Plaintiff reduces recoil without increasing the weapon’s mass or receiver length.”

Following the development of the LMMG, by the end of 2010, GD-OTS began keeping technical data and marketing materials from the design in “highly confidential data repository stored on secure servers to which only the LMMG team had access,” the complaint states. Continued development, tests, failures, fixes, and analysis of the technology and designs were kept in this same secure repository, according to the court document.

GD-OTS employees signed agreements stating they would keep the company’s confidential and proprietary information “in strict confidence” and would not “disclose or use that information outside of employment with GD-OTS,” according to the court document.

True Velocity and Lone Star are claiming that Sig Sauer “misappropriated” SRIA and LMMG trade secrets by “aggressively recruiting GD-OTS employees who had spent years designing and developing these technologies and obtaining crucial and highly confidential design data,” according to the court document.

Sig Sauer recruited and hired three key engineers from GD-OTS with the first hire in the fall of 2013.

In January 2014, Sig hired a “key GD-OTS engineer,” David Steimke, who had worked at GD for 19 years and served as the senior principal design engineer at the company’s facility in Vermont. “During that time, Mr. Steimke was an engineer on nearly every belt-fed machine gun design at GD-OTS,” the complaint states. He was also the original designer on the LMMG project.

Steimke is now Sig Sauer’s chief engineer.

In December 2017, the Army announced an opportunity to replace its lighter belt-fed machine gun, the M249 Squad Automatic Weapon. Then the Army released a prototype opportunity notice for a Next-Generation Squad Automatic Rifle in March 2018, which would later become the Army’s NGSW program.

Sig unveiled its .338 medium machine gun, the Sig SLMAG as a direct competitor to the GD-OTS LMMG in October 2018.

“Before the SIG SLMAG, no other company except for GD-OTS had produced a .338 [Norma Magnum] lightweight medium machine gun,” the complaint states.

GD-OTS employees first began to suspect Sig’s “wrongful use of its trade secret technology,” at a January 2019 International Special Operations Forces Range Day in Las Vegas. GD employees attended a demonstration of the SIG SLMAG and “noted that it appeared to utilize the substantially same SRIA technology developed at GD-OTS before the departure of Mr. Steimke,” the court document lays out.

GD-OTS’ lawyers sent a letter to Sig about the possible use of its proprietary information in the SLMAG in May 2019. Sig denied using GD-OTS’ secret information in any of its weapons, according to the complaint.

Steimke sent another letter stating he knew he was required to maintain confidentiality of proprietary information and claimed he did not work on machine gun-related products until after the Army came out with its plans for a next-generation weapon competition.

“According to Mr. Steimke’s representations, Sig was able to design and manufacture a competing .338 belt-fed machine gun in less than [18] months when it took GD-OTS more than a decade to develop and mature its impulse averaging and LMMG technology,” the court document states.

True Velocity and Lone Star believe, according to the complaint, that Sig has used the technology in four belt-fed machine guns it has designed.

The court document also claims that in addition to knowing Sig had hired former GD-OTS employees, True Velocity also discovered last year that Sig had “misappropriated confidential GD-OTS information, including proprietary design drawing files as well as critical proprietary data in the LMMG Technical Data and Marketing Materials.”

The lawsuit comes at a time when True Velocity and Sig Sauer are also competing for another U.S. military weapons contract – a .338 Medium Machine Gun for U.S. Special Operations Forces.

The court document notes that both companies have delivered prototype weapons to the U.S. military for evaluation “and a potential production contract to be awarded in the near future,” and “based on information and belief, Sig’s submission incorporates a substantial degree of plaintiff’s impulse averaging and LMMG trade secrets.”

The complaint states True Velocity and Lone Star are seeking a court order to stop Sig Sauer from using its trade secrets and are asking for monetary damages.

“Our intellectual property exists not only to protect the best interests of our stakeholders, but also to form the foundation for a licensing model that would enable us to [share] our technology with honest partners around the world,” Pat Hogan, a True Velocity spokesperson, told Defense News. “Illegal taking and misappropriation of that intellectual property serves as a detriment to that mission and we will not stand by idly as it happens.”

A Sig Sauer spokesperson did not respond to a request for comment by press time.