Innovation Asset Blog

Patent dispute sends military supplier in new direction

Washington-based firearms manufacturer Mega Arms recently alerted customers that it would no longer be producing the monolithic upper receivers featured in military-grade rifles. According to the company, this decision was influenced more by patent management issues than competitive capabilities.

"We recently became aware that a competitor is about to obtain a patent, and we believe that this competitor will assert its patent against us," Mega Arms officials wrote in a customer bulletin. "We have strong defenses, but we are not a large company that can sustain ongoing litigation expenses."

According to Military Times, that competitor is Illinois-based Lewis Machine and Tool. Mega Arms did reach out to the company to discuss a potential licensing strategy, but that offer fell through. Instead, Lewis will elect to retain exclusive rights once its approved application is published later this month.

Mega Arms may be the first of many small companies to be affected by Lewis' new patent strategy. Military Times suggested patent re-examination fees could cost as much as $100,000, with the full expense of a patent trial approaching $3 million. As a result, manufacturers with questionable claims or limited resources may follow suit and allocate their funding toward generating new innovations instead of disputing old ones.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.