Prequel to the Lawsuits
An Overview:
US Palm accumulated a debt of a significant amount owed to Molded Devices, Inc., based in Tempe, AZ. After almost a year of non-payment, despite demands, it became clear that US Palm would not pay for the product that had been created. Rather than sue a company that did not have resources to pay its bills, Molded Devices Inc. disposed of the molds as allowed by law. After this, XTech Tactical, LLC partnered with Molded Devices, Inc to created a new magazine that contains several innovative new features. The new features include: fully stainless steel reinforced feed lips, stainless steel spring, and making the magazine easily field serviceable. Molded Devices, Inc. was informed US Palm had been acquired. US Palm’s new owners, Century Arms, then told Molded Devices, Inc that it was forbidden to sell the US Palm magazines. Due to legal reasons, the manufacturer was faced with the decision to give Century Arms the product at whatever price they were willing to pay, or to destroy the existing inventory. Molded Devices, Inc. elected to destroy the unpaid inventory of magazines.
Starting in January 2018, Molded Devices received numerous demand letters from Century Arms. Prior to that time, Molded Devices had twice hosted Century Arms at its Tempe, AZ headquarters. First in October of 2016 and the later in December 2017.
October 2016
The October 2016 Century Arms visit to Molded Devices was a result of US Palm requesting Molded Devices host Century Arms. Brandon Finch of US Palm stated the purpose of the visit was to ensure US Palm’s injection molding supplier was capable of meeting Century Arms’ expectations. Century Arms had been discussing buying products from US Palm for a significant period of time leading up to this.
The day of the visit, four men, previously unknown to Molded Devices, signed into Molded Devices as Century Arms’ agents. Robert Anderson and Brandon Finch of US Palm were also present. Molded Devices welcomed the parties, hosted a tour of their facility, demonstrated their manufacturing processes and even paid for lunch for all parties at Charleston’s in Chandler, AZ. Molded Devices believed the meeting would result in increased orders from US Palm.
May 2017
During a chance meeting in May of 2017, it was discovered that three of the four parties whom had signed into Molded Devices, Inc. as Century Arms’ agents, were, in fact, executives of Molded Devices’ largest firearms related competitor. When confronted, one of the three immediately stated his company’s understanding of the visit to Molded Devices was solely to inspect the US Palm molds that Century Arms was interested in acquiring and moving to his facility. Further, he stated Century Arms had alternatively suggested his company acquire the molds from US Palm to then sell products to Century Arms. He also acknowledged it was clear to him that Molded Devices believed himself and his colleagues to be potential customers, not competitors.
August 2017
After Molded Devices disposed of the molds as allowed by law, Brandon Finch, of the now announced to be shut down US Palm, offered his apologies for the result of the debt and his cooperation in assisting Molded Devices to recoup its loss. When it came time to assist Molded Devices, Brandon Finch in fact did the opposite and told a former supplier to not work with Molded Devices.
Left with the negative financial impact of US Palm’s debt, Molded Devices sought out potential partners established in the AK marketplace. Century Arms was among the numerous parties contacted in August and September of 2017. In October of 2017, with no orders or firm opportunities, Molded Devices and XTech Tactical, whom had a long and positive relationship decided to partner to create a new AK magazine.
October 2017
XTech Tactical exhibited at a trade show for the first time. The show was NASGW in San Antonio, TX. The company, having just reached terms with Molded Devices in creating a new AK47 magazine, decided to use the show as an opportunity to gauge market interest from both a potential features and price point standpoint. The design for the new magazine had just begun. The show was very lightly trafficked. At the show, Jeremy Deadman, of XTech Tactical and Molded Devices, met with Peter Leach of Century Arms. No mention of any trademark filings or rights of Century Arms were made. Instead, Peter Leach stated that Century Arms planned to begin purchasing products from Molded Devices in January of 2018. None of the three members of XTech Tactical present at the show recall seeing any Century Arms parties anywhere near the XTech Tactical booth.
Century Arms presently alleges XTech Tactical acquired and sold US Palm magazines at the event. This is not, in any way, true. XTech Tactical took its first orders for its AK magazine, the MAG47, in July of 2018. XTech Tactical also did not sell any AK grips until becoming a dealer for Tango Down and offering them for sale in October 2018.
Jeremy Deadman did make an effort to sell the unpaid for magazine components on behalf of Molded Devices as well as identify a potential partner established in the AK marketplace for Molded Devices . This effort led to a potential buyer’s attorney discovering Century Arms trademark filings on the name and logo of US Palm in August of 2017. This same buyer had had interest in acquiring the US Palm name from the former owners until this discovery. Even though the inventory was produced and date stamped long before Century Arms’ filing dates, the buyer elected not to move forward with acquiring Molded Devices’ inventory. This was the first time Molded Devices or XTech Tactical became aware of the filings.
December 2017
The second visit to Molded Devices by Century Arms was a late request in December of 2017. Due to the discovery about the realities of the prior meeting, Molded Devices stated that it required any Century Arms parties to sign an NDA in order to hold the requested meeting. Peter Leach of Century Arms, whom was present for the first meeting, agreed to the NDA requirement. Molded Devices also made known its knowledge of the trademark filings.
Peter Leach and Tim Self of Century Arms arrived at Molded Devices on December 27th, 2017. Upon arriving at Molded Devices, Tim Self, the SVP of Century Arms, refused to sign the NDA. His stated reason was: should he not reach terms to purchase product from Molded Devices, he did not want legal liability to any stated trade secrets of Molded Devices. After some discussion, the parties agreed to sit down in the facility’s lobby. During the meeting, Molded Devices’ Tom Star, its president, and Jeremy Deadman, its director of business development, were present. Despite being well underway in the new magazine development, Molded Devices reiterated its prior offers made to Peter Leach to produce products non-exclusively for Century Arms. However, Molded Devices did offer Century Arms a potential exclusive on an entry level version on a future AK magazine. The meeting ended with Tim Self, SVP of Century Arms, stating he desired complete exclusivity over the molds, but he would consider the proposal. Tim Self also stated that he was going to meet Robert Anderson and Brandon Finch of the then shut down US Palm. He stated it was to be his first time meeting the parties in person.
January 2018
The next communication Molded Devices received was a demand letter from Century Arms’ attorneys. After receiving the demand letter, Molded Devices’ attorneys exchanged several rounds of communication with Century Arms’ lawyers. The letters stated Century Arms intended to acquire US Palm and had filed trademark applications on US Palm’s name in logo in August of 2017. The conclusion of the communication was that Molded Devices would destroy the unpaid for inventory of magazine components it was left with and provide evidence of the destruction.
January 23rd, 2018
Century Arms Hires Bill Barrett, a former Tapco/Remington Group executive, as VP Firearms Accessories.
See: https://www.linkedin.com/in/william-barrett-33686299/
https://www.theoutdoorwire.com/story/6ab5e08c-2cff-42b2-a8db-740f26b6e2ae
May 30th, 2018
Molded Devices provided Century Arms with a video as evidence of destruction of the unpaid inventory of magazine components. The provided video showed parties prepping for the explosion that were wearing XTech Tactical shirts. As a result, Century Arms next communication was to both XTech Tactical and Molded Devices. The communication was a demand letter and a never filed draft lawsuit which listed both parties as defendants. The letter demanded no video of the explosion be aired among numerous other items. As a result XTech Tactical sought out multiple legal opinions. Each legal firm advised XTech Tactical . that there was no valid legal liability it would be exposed to. Despite this Molded Devices and XTech Tactical delayed the release of the AK magazine and made further changes to the design.
See: May 30th, 2018 Draft Lawsuit
July 27th, 2018
XTech Tactical releases the MAG47 with final updates from the version shown in the video.
See: https://www.youtube.com/watch?v=9srYOj6g2RY
http://soldiersystems.net/2018/08/02/xtech-tactical-releases-the-mag47-polymer-ak-magazine/
August 1, 2018
XTech Releases Full Video with explanation of explosion in description.
August 3rd, 2018
TTAG article is published
The Story Behind That XTech Tactical 650-Pound Binary Explosion