# 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(Filed under Seal: June 19 , 2014) (Reissued: June 24, 2014) (NOT TO BE PUBLISHED)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 gover nment’s motions seek to exclude from evidence N on

- 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 contain ed 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 fil ed under seal. The parties

we re 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 Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 1 of 6A. The Campion NDA and Related Testimony

T he NDA signed on behalf of the government by Mr. Campion (“Campion NDA”) is

dated June 23, 2005

, se e 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 (“S O COM”)

, Def.’s Mot. i n 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 t hat 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 just ified 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 I n support of this argument, Liberty stresses that the government has produced no documentation indicating that Mr. Campion lacked authoriz ation to execute the

NDA. Id. at 6

- 7. Th is 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 Tri b al 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

M ajor (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, Directo rate 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, alternative ly , 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 a ppropriate or

e ssential 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 C t

. C l . 705, 707 (1978), and City of El

Centro v. United States , 17 C l

. C t . 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 Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 2 of 6aff’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 government al ratification of the NDA req uire the court to resolve factual issues. C onsequently

, it would be inappropriate for the

court to exclude evidence about the Campion NDA prior to trial.

T he government also contends that even if it is bou nd 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 contain ed a waiver provision, see Def.’s Mot. to

Dismiss Ex. C (Campion NDA)

, ¶ 3.5, ECF No. 9

- 3, and that p rovision 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 wa s required for the exception to apply. Id . at 11

- 13 (citing L

- 3

Co mm c ’n s 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

Th e government previously presented th is argument to the court in connection with a motion to dismiss. As explained in a prior opinion re solving 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 wit h the federal government. See Libert y 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 C ampion 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). A s 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, develope d, demonstrated, and evaluated.

48 C.F.R. § 2.101 (“Definitions

– ‘ Acquisition ’ ” ). The government fails to e xplain why FAR provisions should apply to the NDA

.

3 Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 3 of 6that should be de termined through testimony and evidence at trial. Libert y 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

issue

. 8 See Def.’s Mot. i n 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 sig ned 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 Receiv ing Party.” Def.’s Mot. to Exclude Marsh NDA at 4. T he 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 defi nitionally possible. Id

. Liberty responds that

Mr. Marsh receive d proprietary information implicated in the NDA from Mr. Campion and additionally that Mr. Marsh violat ed the Marsh NDA by transmitting th at information. Pl.’s Resp. to Def.’s Mot. to Exclude Marsh NDA at 5

- 8, ECF N o. 63

. In Liberty ’s view, the government’s attempt to distinguish between a direct disclosure by Mr. Marx and a n indirect

disclosure that occurred to Mr. Marsh via Mr. Campion, with Mr. Marx’s permission, is not meaningful

. Id. at 8. The court agrees th at 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 th at Act can only be resolved through trial.

C. Independent Development of M855A1 EP R and M80A1 EPR Rounds

Liberty requests exclu sion 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, Li berty s eeks 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 Th e court has already determined that the government can waive the Anti

- Assignment Act preemp tively in a contractual provision. Libert y Ammunition , 101 Fed. Cl. at 588

- 89. There is a significant possibility that the government waive d the Anti

- Assignment Act here, which too
can be address ed 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

Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 4 of 6evidence of independent de velopment. 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 F ed. R

. Evid. 1002 , which sets out requirements for original document ation

, 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 b ecause 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 1 3

- 1 4

, ECF No. 61. Additionally , t he government argues that the Federal Rules of Evidence provide no basis to exclude oral t estimony of the independent development of the A1 EPR technology at the pre

- trial stage

. Id. at 15.

Liberty’s reliance on Fed. R. Evi d. 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 Fe d. 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 Me dichem, S.A., v. Ro labo, 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 o f any corroborating d ocuments must be resolved during trial.

D. E x 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

. i n Limine to Exclude Feb. 2014 Ex Parte M855 and M855 LFS Tests by Def

. (“Pl.’s M ot . 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 p atent a t issue is invali d 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 fed eral statute provides otherwise.” Fed. R. Evid.

1002.

5 Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 5 of 6Liberty argues that the t ests should be excluded because of the lack of obj ectivity 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.’” ( quo ting Amgen, Inc. v. Chugai Pharm. Co. , No.

87

- 26 17

- Y, 1989 WL 169006, at *64 (D. Mass. Dec. 11, 1989)

, rev’d on other grounds , 927 F.2d 1200 (Fed. Cir. 1991 ) ) )

. Liberty additio n ally 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. A lternative ly, 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 Rals ton 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 respond s by contending that the test ing 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. I t argues that

the tests results are potentially admissible for two reasons. First, ex parte tests that follow proper procedural safeguards can be g iven 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 tri al, thereby negat ing 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 exp erts
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 Case 1:11-cv-00084-CFL Document 70 Filed 06/24/14 Page 6 of 6