Armed conflict
March 22, 2010
The Federal Cartel Authority searched the offices of a number of German firearms manufacturers last week as part of an investigation into claims that one of the nation's major gun makers, Heckler & Koch (H&K), is leading a boycott of patented safety technology to stifle competition.
The probe was launched after German company Armatix complained that H&K was not making use of a 10-year license it holds for an Armatix electronic safety system. The technology, which is designed to prevent unauthorized or accidental discharge, automatically disables a gun when it is not within a few inches of a custom wristwatch that transmits an electronic signature.
Armatix alleges that H&K is colluding with other gun manufacturers to boycott the safety technology until 2012, when its patent exclusivity is due to expire.
Armatix fires legal salvo
As competition authorities investigate, Armatix has indicated it is preparing a multi-million-euro lawsuit aimed at recovering revenues lost through H&K's inaction.
"We are a company that provides security, and we are a market leader in our field," Armatix founder Bernd Dietel told Deutsche Welle. "H&K has been licensing our product, but they aren't using it.'"
"I will bring them to court because they have cost me a lot of money," he added.
H&K did not respond to Deutsche Welle's requests for comment on the matter. But company chief Peter Beyerler told Der Spiegel magazine that there was no evidence to support Armatix's claims.
Beyerler said H&K had not made use of the Armatix technology because it simply did not see a market for the safety system.
But in a recent interview Bernd said he was confident his technology would sell well in the United States, where gun crime and accidental discharges claim thousands of lives each year
He said he expects 100 million weapons will be sold around the world over the next 20 years. If 10-15 percent of them are fitted with electronic safety technology, the market for such technology would be worth tens of billions of euros.
Former H&K manager adds to drama
In an attempt to bypass H&K, Armatix wants to manufacture its own series of weapons fitted with electronic safety mechanisms. But plans to produce up to 20,000 handguns this year have been slowed down by legal concerns surrounding the role of Armatix's technical director Ernst Mauch.
Before joining Armatix in 2006, Mauch was the managing director of H&K. He therefore possesses intimate knowledge of H&K's technology and supply chain.
Last year H&K sent a letter to its suppliers warning them that they risked breaching the terms of their contracts if they became involved in the Armatix project.
Armatix responded by taking H&K to a Stuttgart court in December with a claim for compensation. That particular dispute was settled out of court, but Armatix has since claimed that H&K has not fulfilled its end of the agreement.
Author: David Francis
Editor: Sam Edmonds