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Colt v. Bushmaster lawsuit
A Federal Magistrate has issued a recommended decision (it has to be reviewed by the District Judge) in a lawsuit between Colt and Bushmaster (pdf file).
A quick read of the 70 page opinion indicates Colt is suing over trademark and related doctrines, regarding Bushmaster's use of terms such as "M4", "AR-15," etc. The magistrate recommends ruling in favor of Bushmaster on most of the suit, on grounds that the terms have become common usage (and M4 is a term assigned by the government). Colt also asserts a sort of "look and feel" argument regarding design of the M-16 and AR-15. The magistrate rejects that for a number of reasons (the look and feel must not be related to function, but to appearance, etc.). The Magistrate does allow one claim to go forward, related to false advertising (Bushmaster's statements that it hold government contracts and makes to mil-spec).
There's also an interesting legal history of past disputes over the M-16 and M4, how the M4 contract came to be, etc. (Although the discussion may be the official and somewhat sanitized one: I've heard it said that Colt was outbid on the M-16 contract, and for political reasons was then awarded one, sole source (no competitive bidding) for the M4, which is essentially an M-16.
[Thanks to Mark Gruver for the tip]
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Bushmaster is reporting on their website that the court has upheld the opinion of the magistrate.
It should show up in the case records.
My understanding is that the Feds shared Colt's proprietary information, obtained under non-disclosure terms, with competitors - H&K - and got caught. Hence the Govt. was unable to spec from anybody but Colt and so bought Colt. Easy to find this version all over the web.