(Bloomberg) -- Four lawyers and three judges met Friday morning in Vienna in a small room on the 22nd floor of the the Austrian capital’s justice building. On the agenda: a legal fight between two gunmakers vying for dominance of the U.S. gun market.
It was the first public meeting before presiding Judge Monika Millet in a lawsuit filed in January by German gunmaker Sig Sauer. The company is suing Austrian rival Glock GmbH over a design detail of a series of new firearms, according to Glock’s annual report. Sig Sauer alleged that Glock’s newest and most popular models, the “Generation 5” and the “Glock 19X” handguns, infringe a patented breech block (the part that closes the breech of a gun at the moment of firing) that can be stopped from both sides.
Sig Sauer is demanding that Glock cease production of the handguns using the design, according to the court’s spokesman. It also wants Glock to destroy all such products already made and disclose the revenue generated in order to determine a patent fee. While Sig Sauer’s request for a preliminary injunction was rejected in July, the lawsuit is still pending.
“The obligation to cease and desist, in particular, would have a massive impact on Glock GmbH, because some of the most successful models couldn’t be sold anymore,” Glock said in its report. The company’s lawyer, Wilhelm Goesseringer, told Millet Friday that Sig Sauer’s real goal is to “lock the defendant out of the U.S. market,” because the feature covered by the patent is in high demand by individual buyers, law enforcement agencies and the military.
Glock asked the court to set the case’s litigation value at 100 million euros ($115 million), rather than the 70,000 euros Sig Sauer cited in its lawsuit. Sig Sauer’s lawyer Rainer Schultes argued that Glock could simply revert to its older “Generation 4” models or make small changes in production. Millet set the amount at 100,000 euros, the only substantive ruling at today’s hearing.
More broadly, Glock claims Sig Sauer’s patent is invalid because the protected design isn’t sufficiently novel, challenging the validity of the patent at the Austrian patent office. Millet’s suspended proceedings in the case until the patent office weighs in.
Sig Sauer and Glock handguns, among the most popular sold in America, are neck and neck in sales according to a 2017 ranking of best selling handguns compiled by Gun Broker, a digital firearms marketplace. The Sig Sauer P938 holds third place, while the Glock G19 holds fourth place. Sig also took sixth and seventh place on the list with the P238 and P320, respectively. (The Ruger LCP and Smith & Wesson M&P 9 Shield are first and second, respectively.)
“There certainly is historical precedent for such legal actions,” said Rommel T. Dionisio, a firearms industry analyst at Aegis Capital Corp. “The latest generations of modern polymer pistols and sporting rifles are remarkably similar in design and function, so it’s not a big surprise that such a lawsuit is being brought, even among major industry players such as Glock and Sig Sauer.”
The two companies have a history of battling over not only design, but lucrative government contracts. In 2017, Glock lost a major military contract bid to Sig Sauer. The two companies were competing for the Army Modular Handgun System, which replaces the Beretta M9/11 and is worth as much as $580 million. After Sig Sauer was awarded the contract, Glock filed a protest with the U.S. Government Accounting Office, which was later denied. In a statement at the time, Glock Vice President Josh Dorsey accused the Army of not completing testing of the handguns and instead focusing on price.
“We are confident had the Army completed the testing, the Glock 19 would have outperformed the Sig P320,” he said in a statement. The Sig Sauer P320 was selected by the military instead. (The Glock 19 is among the firearms at issue in the Austrian lawsuit.)
Glock previously sued Smith & Wesson for patent infringement in a case that ended in a settlement requiring modification of an allegedly infringing firearm. Representatives for Sig Sauer in the U.S. didn’t return requests for comment.
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