SOURCE: Digital Ally

Digital Ally

August 15, 2017 09:00 ET

Digital Ally Announces Plans to Un-Stay the Litigation Against Axon and Move Forward to Trial With the '452 Patent

LENEXA, KS--(Marketwired - Aug 15, 2017) - Digital Ally, Inc. (NASDAQ: DGLY) ("Digital" or the "Company"), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, today announces its plans to un-stay the litigation against Axon Enterprise, Inc. ("Axon," formerly known as TASER International, Inc.) in the U.S. District Court for the District of Kansas in order to seek an expedited trial schedule.

On July 6, 2017, the U.S. Patent Office (the "Patent Office") denied Axon's petition for inter partes review ("IPR") of Digital's Patent No. 9,253,452 (the "'452 Patent"). And on August 3, 2017, the Patent Office denied Axon's final petition for IPR of the '452 Patent. This was Axon's final attempt to invalidate the '452 Patent before the Patent Office.

The litigation between the Company and Axon involves two patents -- the '452 Patent and U.S. Patent No. 8,781,292 ("the '292 Patent") -- and is currently stayed pending institution decisions for Axon's four IPR petitions. The '452 Patent generally covers the automatic activation and coordination of multiple recording devices in response to a triggering event such as a law enforcement officer activating the light bar on the vehicle. Within the Axon product family, the "Signal" component is responsible for this functionality. The '292 Patent is asserted against Axon's Signal Performance Power Magazine ("SPPM"), which is a battery pack that incorporates Signal and is designed to activate one or more body cameras when the safety of a conducted electrical weapon is deactivated.

With the Patent Office determining that Axon failed to demonstrate even a reasonable likelihood of invalidating the '452 Patent in its IPR petition, an update is due to the District Court of Kansas by Thursday, August 17, 2017. The Court will then decide whether to maintain the stay of the litigation. As noted in its recent public statements, Axon plans to argue that the stay should be maintained until the final resolution of the '292 Patent IPR. In order to expedite the case, clarify the issues for the Court, and remove any remaining hurdles impeding a trial of this matter, the Company will remove the '292 Patent from its case against Axon. This will render moot Axon's '292 Patent IPR for purposes of the litigation and the stay. Accordingly, once the '292 Patent has been dismissed from the litigation, there will be no reason to maintain the stay and an expedited schedule for trial may be set.

Because the '292 Patent allegations are directed only to the SPPM, a small component of Axon's body camera business, the dismissal will allow the Company to focus its case on the '452 Patent, which covers an overwhelming majority of Axon's body camera sales incorporating Signal technology.

"We are excited to focus this case and provide a clear path forward for the District Court. With the removal of the '292 Patent, we can now focus on the significant damages associated with Axon's infringement of the '452 Patent," said Digital's CEO, Stanton E. Ross. "With the defeat of Axon's IPRs for the '452 Patent, we will request an expedited path to trial where a jury can assess Axon's willful infringement of the '452 Patent and award Digital Ally appropriate damages. We also believe the Court enjoin all further sales of Axon's non-SPPM Signal technology."

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial applications. The Company's primary focus is digital video imaging and storage. The Company is headquartered in Lenexa, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY." For additional news and information please visit www.digitalallyinc.com or follow us on Twitter @digitalallyinc and Facebook www.facebook.com/DigitalAllyInc.

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This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: the ultimate outcome of the patent infringement litigation between the Company and Axon; whether the Court will lift the stay in the Company's litigation against Axon and grant an expedited trial schedule; whether Axon will seek to have the Patent Office reconsider its IPR decision and whether the Patent Office will do so; competition from larger, more established companies with far greater economic and human resources; the effect of changing economic conditions; and changes in government regulations and similar matters. These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company's disclosures. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. The Company does not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2016 and Form 10-Q for the three months ended March 30, 2017, as filed with the Securities and Exchange Commission.

Contact Information

  • For Additional Information, Please Contact:

    Stanton E. Ross
    CEO
    (913) 814-7774

    Thomas J. Heckman
    CFO
    (913) 814-7774