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.
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 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.