Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 1 of 6
In the United States Court of Federal Claims
No. 11-0084C
(Filed under Seal: June 19, 2014)
(Reissued: June 24, 2014)
(NOT TO BE PUBLISHED)
____________________________________
)
LIBERTY AMMUNITION, INC., )
)
Plaintiff, )
)
v. )
)
UNITED STATES, )
)
Defendant. )
____________________________________ )
ORDER 1
LETTOW, Judge.
Pending before the court are four motions in limine filed in anticipation of the scheduled
trial of this patent case involving the military’s so-called “green bullet.” Two motions were filed
by the government and the other two were filed by plaintiff Liberty Ammunition, Inc.
(“Liberty”). 2 The government’s motions seek to exclude from evidence Non-Disclosure
Agreements (“NDAs”) signed on behalf of the government by Mr. Thomas Campion and
Mr. Charles Marsh, and any related testimony regarding those NDAs. Liberty’s first motion
seeks to exclude any testimony on the independent development by the government of the
allegedly infringing M855A1 EPR and M80A1 EPR rounds. Its second motion seeks to exclude
any evidence regarding ex parte testing of the prior-art M855 and M855 LFS rounds conducted
on February 7 and 12, 2014, on behalf of the government. For the reasons stated, each of the
motions is denied.
1
Because this order might have contained confidential or proprietary information within
the meaning of Rule 26(c)(1)(G) of the Rules of the Court of Federal Claims (“RCFC”) and the
protective order entered in this case, ECF No. 27, it was initially filed under seal. The parties
were requested to review the decision and provide proposed redactions of any confidential or
proprietary information. No redactions were requested.
2
All four motions were timely filed on May 9, 2014.
1
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A. The Campion NDA and Related Testimony
The NDA signed on behalf of the government by Mr. Campion (“Campion NDA”) is
dated June 23, 2005, see Liberty Ammunition, Inc. v. United States, 101 Fed. Cl. 581, 584 (2011),
at a time when Mr. Campion, a government contractor, was serving as the project manager for
the Program Executive Office for Special Projects at the United States Special Operations
Command (“SOCOM”), Def.’s Mot. in Limine to Exclude the Non-Disclosure Agreement
Signed by Thomas Campion and Testimony Relating to the Same (“Def.’s Mot. to Exclude
Campion NDA”) at 2, ECF No. 52. During that period, he was having discussions with Mr. PJ
Marx, the inventor, regarding Mr. Marx’s bullet design. Id.; see also Pl.’s Resp. to Def.’s Mot.
to Exclude Campion NDA at 2-3, ECF No. 62. 3 The government argues that exclusion of the
Campion NDA is justified because the government cannot be bound by Mr. Campion, who, as a
government contractor, did not have authority to execute a contract on behalf of the government.
See Def.’s Mot. to Exclude Campion NDA at 5.
Liberty agrees with the concept that government contractors generally are not authorized
to execute contracts on behalf of the government, but it argues that exceptions apply in this case.
Pl.’s Resp. to Def.’s Mot. to Exclude Campion NDA at 6-11. Liberty contends that
Mr. Campion, by nature of his position, possessed express actual authority to contractually bind
the government. Id. at 6. 4 In support of this argument, Liberty stresses that the government has
produced no documentation indicating that Mr. Campion lacked authorization to execute the
NDA. Id. at 6-7. This contention misplaces the burden to establish such authority. The burden
to show authority to contract rests on the party seeking to assert that authority exists, in this case,
Liberty. See Council for Tribal Emp’t Rights v. United States, 112 Fed. Cl. 231, 243-44 (2013),
3
An earlier NDA was signed on February 17, 2005 by three individuals, Mr. Marx, then-
Major (now Lt. Colonel) Glenn A. Dean of the United States Army, and John W. Amick. See
Liberty Ammunition, 101 Fed. Cl. at 584. At the time, Major Dean was Chief of Small Arms
Division, Directorate of Combat Development, Army Infantry Center, Fort Benning, Georgia.
Mr. Amick was his senior contractor-administrator. The government has not filed an in limine
motion regarding that NDA.
4
Liberty argues, alternatively, that (1) Mr. Campion had implied authority to execute the
agreement, because non-disclosure agreements were “integral” to Mr. Campion’s duty to protect
proprietary information disclosed by potential contractors, Pl.’s Resp. to Def.’s Mot. to Exclude
Campion NDA at 7-8 (citing Brunner v. United States, 70 Fed. Cl. 623, 641-43 (Fed. Cl. 2006)
(“[A]n agent may have an implied authority to contract on behalf of the government, based on a
consideration of the duties of that agent, and whether the power to contract was appropriate or
essential to their performance.”)), and (2) SOCOM ratified the Campion NDA by inviting,
accepting, and reviewing Liberty’s Small Business Innovation Research (“SBIR”) proposal,
further validating the agreement as a binding contract with the government, id. at 10-11 (citing
Philadelphia Suburban Corp. v. United States, 217 Ct. Cl. 705, 707 (1978), and City of El
Centro v. United States, 17 Cl. Ct. 794, 798 (1989), rev’d, 922 F.2d 816 (Fed. Cir. 1990)); see
also Silverman v. United States, 679 F.2d 865, 868-70 (Ct. Cl. 1982) (addressing institutional
ratification).
2
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aff’d, __ Fed. Appx. __, 2014 WL 1910497 (Fed. Cir. May 14, 2014). In this instance, the extent
of Mr. Campion’s authority, express or implied, and possible governmental ratification of the
NDA require the court to resolve factual issues. Consequently, it would be inappropriate for the
court to exclude evidence about the Campion NDA prior to trial.
The government also contends that even if it is bound by the Campion NDA, the Anti-
Assignment Act, 41 U.S.C. § 6305 (formerly codified as 41 U.S.C. § 15), bars Liberty’s breach
of contract claim. See Def.’s Mot. to Exclude Campion NDA at 5-8. 5 In opposition, Liberty
argues that the waiver and operation-of-law exceptions to the Anti-Assignment Act apply. See
Pl.’s Resp. to Def.’s Mot. to Exclude Campion NDA at 12-17. First, Liberty contends that the
waiver exception applies because the NDA contained a waiver provision, see Def.’s Mot. to
Dismiss Ex. C (Campion NDA), ¶ 3.5, ECF No. 9-3, and that provision was satisfied when the
government was provided with written notice of assignment at the outset of this case. Pl.’s Resp.
to Def.’s Mot. to Exclude Campion NDA at 13. Second, Liberty argues that the operation-of-law
exception applies because the shift in the contracting party, from Mr. Marx as a sole
proprietorship to Liberty Ammunition as a corporation, did not change the nature of the contract
itself, and no written notice was required for the exception to apply. Id. at 11-13 (citing L-3
Commc’ns Integrated Sys., L.P. v. United States, 84 Fed. Cl. 768, 777 (Fed. Cl. 2008)). The
government asserts that neither exception is applicable in this case. Def.’s Mot. to Exclude
Campion NDA at 5-8. 6
The government previously presented this argument to the court in connection with a
motion to dismiss. As explained in a prior opinion resolving that motion, any decision regarding
whether the Campion NDA is subject to the Anti-Assignment Act turns on disputed issues of fact
5
The Anti-Assignment Act generally forbids a private party from transferring its interest
in a contract with the federal government. See Liberty Ammunition, 101 Fed. Cl. at 586 & n.3.
The government asserts that because Mr. Marx, not Liberty, was the signing party to the NDA,
Liberty has no right to assert a claim under the contract. Def.’s Mot. to Exclude Campion NDA
at 7.
6
The government also claims that under the Federal Acquisition Regulations (“FAR”), a
novation agreement must be executed for the government to recognize a successor in interest.
See Def.’s Mot. to Exclude Campion NDA at 8 (citing 48 C.F.R. § 42.1204). As Liberty points
out, however, see Pl.’s Resp. to Def.’s Mot. to Exclude Campion NDA at 16-17, the FAR applies
only to acquisitions as defined in Part 2 of the FAR:
[T]he acquiring by contract with appropriated funds of
supplies or services (including construction) by and for the
use of the federal government through purchase or lease,
whether the supplies or services are already in existence or
must be created, developed, demonstrated, and evaluated.
48 C.F.R. § 2.101 (“Definitions – ‘Acquisition’”). The government fails to explain why FAR
provisions should apply to the NDA.
3
Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 4 of 6
that should be determined through testimony and evidence at trial. Liberty Ammunition, 101
Fed. Cl. at 587. 7
B. The Marsh NDA and Related Testimony
A NDA signed by Mr. Marsh on behalf of the government (“Marsh NDA”) is also at
8
issue. See Def.’s Mot. in Limine to Exclude the Non-Disclosure Agreement Signed by Charles
Marsh and Testimony Relating to the Same (“Def.’s Mot. to Exclude Marsh NDA”) at 1, ECF
No. 53. Mr. Marsh was and is an employee of the government and is involved with small-caliber
ammunition for the Army. Id. at 2. He signed a NDA with Mr. Marx on January 11, 2006. See
Liberty, 101 Fed. Cl. at 584. The government emphasizes that the NDA defines “Confidential
Information” to mean proprietary information “disclosed by Disclosing Party to Receiving
Party.” Def.’s Mot. to Exclude Marsh NDA at 4. The government argues that because
Mr. Marsh did not receive any of the confidential information implicated in the NDA directly
from Mr. Marx, no breach of the NDA is definitionally possible. Id. Liberty responds that
Mr. Marsh received proprietary information implicated in the NDA from Mr. Campion and
additionally that Mr. Marsh violated the Marsh NDA by transmitting that information. Pl.’s
Resp. to Def.’s Mot. to Exclude Marsh NDA at 5-8, ECF No. 63. In Liberty’s view, the
government’s attempt to distinguish between a direct disclosure by Mr. Marx and an indirect
disclosure that occurred to Mr. Marsh via Mr. Campion, with Mr. Marx’s permission, is not
meaningful. Id. at 8. The court agrees that the indirect means of disclosure provide no reason to
exclude evidence regarding the Marsh NDA.
In addition, the government reiterates an argument based upon the Anti-Assignment Act
that is identical to a contention it makes relating to the Campion NDA. Def.’s Mot. to Exclude
Marsh NDA at 5. Here also, the court concludes that the questions respecting applicability of the
Anti-Assignment Act and the exceptions to that Act can only be resolved through trial.
C. Independent Development of M855A1 EPR and M80A1 EPR Rounds
Liberty requests exclusion of all testimony and evidence related to the Army’s purported
independent development of the allegedly infringing products, the M855A1 EPR and M80A1
EPR bullets (collectively “the A1 technology”). See Pl.’s Mot. in Limine to Preclude Any and
All Trial Evidence Offered by Def. Regarding Supposed “Independent Development” of the
M855A1 EPR & M80A1 EPR Rounds (“Pl.’s Mot. to Exclude Evid. of Indep. Dev.”), ECF No.
55. As part of its case in chief, Liberty seeks to prove that the government developed the
M855A1 EPR and M80A1 EPR rounds through misappropriated proprietary information, in
violation of its NDAs. Id. at 3-4. Liberty puts forward two grounds for its motion to exclude
7
The court has already determined that the government can waive the Anti-Assignment
Act preemptively in a contractual provision. Liberty Ammunition, 101 Fed. Cl. at 588-89. There
is a significant possibility that the government waived the Anti-Assignment Act here, which too
can be addressed at trial.
8
The Marsh and Campion NDAs are identical except for the names of the signing party.
Liberty, 101 Fed. Cl. at 584.
4
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evidence of independent development. First, Liberty cites the absence of any research
notebooks, required by Army Reg. 27-60, which might serve as corroboration to oral testimony
of such development. Id. at 7-11 & Ex. H (Army Reg. 27-60), ¶ 2-3. Second, Liberty argues
that Fed. R. Evid. 1002, which sets out requirements for original documentation, precludes
admission of oral testimony in place of such documentation. Id. at 12-13. 9 The government
counters that it cannot provide or adduce into evidence any laboratory notebooks because they do
not exist and insists that it has complied with discovery requests and produced over 100,000
pages of other documentation regarding development of the A1 EPR technology. Def.’s Opp’n.
to Pl.’s Mot. to Exclude Evid. of Indep. Dev. at 13-14, ECF No. 61. Additionally, the
government argues that the Federal Rules of Evidence provide no basis to exclude oral testimony
of the independent development of the A1 EPR technology at the pre-trial stage. Id. at 15.
Liberty’s reliance on Fed. R. Evid. 1002 is unavailing. The rule is intended to be applied
when the contents of a writing are at issue and to ensure that the writing itself, or a suitable
duplicate, is produced. See R & R Assocs. v. Visual Scene, Inc., 726 F.2d 36, 38 (1st Cir. 1984)
(“No evidentiary rule, however, prohibits a witness from testifying to a fact simply because the
fact can be supported by written documentation.”). While laboratory notebooks would be
relevant evidence of independent development, the apparent non-existence of such notebooks
does not mean that oral testimony on that topic cannot be presented. A witness can testify about
any relevant and non-prejudicial subject of which he or she has personal knowledge, see Fed. R.
Evid. 104, 403, and 602, assuming that the other Federal Rules of Evidence are satisfied.
Notably, however, the court may not look favorably on testimony of independent
development that lacks corroboration by evidence that would normally be available in a patent
case. See Medichem, S.A., v. Rolabo, S.L., 437 F.3d 1157, 1169-73 (Fed. Cir. 2006) (finding that
oral testimony was not sufficient to corroborate an inventor's claims of reduction to practice of
an invention). That said, the weight to be accorded a witness’s testimony or the contents of any
corroborating documents must be resolved during trial.
D. Ex Parte M855 and M855 LFS Tests
Liberty also seeks to exclude the February 2014 ex parte tests of prior art in the form of
M855 and M855 LFS projectiles conducted at the direction of one of the government’s experts
after discovery closed and without notice to Liberty. See Pl.’s Mot. in Limine to Exclude Feb.
2014 Ex Parte M855 and M855 LFS Tests by Def. (“Pl.’s Mot. to Exclude Tests”) at 6, ECF No.
54 (citing In re Newman, 782 F.2d 971, 974 (Fed. Cir. 1986) (finding a lack of “fundamental
fairness” in ex parte tests that deviated too greatly from safeguards found in Fed. R. Civ. P. 34)).
These tests were performed as part of the government’s litigation strategy to generate
information to be used by its expert witness. See Def.’s Opp’n to Pl.’s Mot. to Exclude Tests at
4-6, ECF No. 60. The government apparently seeks to use the results of these tests, along with
expert testimony, to support its argument that the patent at issue is invalid because it was
anticipated by the M855 and M855 LFS ammunition, which were both in the prior art. Id.
9
Rule 1002 states that “[a]n original writing, recording, or photograph is required in order
to prove its content unless these rules or a federal statute provides otherwise.” Fed. R. Evid.
1002.
5
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Liberty argues that the tests should be excluded because of the lack of objectivity of the
tester and the self-serving nature of the circumstances. Pl.’s Mot. to Exclude Tests at 7 (“Ex
parte tests are viewed with suspicion ‘because acts that are not observed or corroborated by an
opposing party may be entirely self-serving.’” (quoting Amgen, Inc. v. Chugai Pharm. Co., No.
87-2617-Y, 1989 WL 169006, at *64 (D. Mass. Dec. 11, 1989), rev’d on other grounds, 927
F.2d 1200 (Fed. Cir. 1991))). Liberty additionally argues that the ex parte tests were prejudicial
because the government waited to release the results until after the relevant expert reports were
exchanged. Pl.’s Mot. to Exclude Tests at 7. Alternatively, Liberty maintains that even if the
tests were to be admitted, any expert testimony relying on them should receive little or negligible
weight. Id. at 6 (citing Ralston Purina Co. v. Far-Mar-Co, Inc., 586 F. Supp. 1176, 1214 (D.
Kan. 1984), rev’d on other grounds, 772 F.2d 1570 (Fed. Cir. 1985)).
The government responds by contending that the testing gives rise to an issue of fact that
should be determined at trial. Def.’s Opp’n to Pl.’s Mot. to Exclude Tests at 7-8. It argues that
the tests results are potentially admissible for two reasons. First, ex parte tests that follow proper
procedural safeguards can be given evidentiary consideration. Id. at 8 (citing Congoleum Indus.,
Inc. v. Armstrong Cork Co., 319 F. Supp. 714, 716 (E.D. Pa. 1970)). 10 Second, the government
argues that its expert will testify at trial, thereby negating Liberty’s reliance on Rosemount, Inc.
v. Beckman Instruments, Inc., 727 F.2d 1540, 1549 (Fed. Cir. 1984), in which the Federal Circuit
excluded testimony regarding ex parte tests where the defendant did not produce an expert to
clarify the test results at trial. Def.’s Opp’n to Pl.’s Mot. to Exclude Tests at 9-10. Because
precedent does not support a blanket exclusion of all ex parte tests, Liberty’s motion to exclude
the results of the ex parte tests conducted under the direction of one of the government’s experts
is unpersuasive.
CONCLUSION
For the reasons stated, both of the government’s motions in limine and both of Liberty’s
motions in limine are DENIED.
It is so ORDERED.
s/ Charles F. Lettow
Charles F. Lettow
Judge
10
In support of this argument, the government points out that Liberty’s expert does not
question the validity of the ex parte tests but only the repeatability of the tests. Def.’s Opp’n to
Pl.’s Mot to Exclude Tests at 8 n.5 (citing id. Ex. 7, at 173).
6