| Taser-maker loses sixth patent challenge in a row against Digital Ally|
Axon Enterprise Inc. (Nasdaq: AAXN), formerly known as Taser International Inc., lost its sixth challenge in a row against Lenexa-based Digital Ally's patents.
In the latest challenge, the Scottsdale, Ariz.-based company tried to invalidate Digital Ally's Patent No. 9,712,730, which involved a system to mount a portable camera to clothing, a vehicle or anything carried by the user, such as a firearm. But the U.S. Patent Office refused to review the patent, saying the information Axon provided didn't demonstrate enough evidence that the device was unpatentable.
Digital Ally (Nasdaq: DGLY) said the "730" patent in question isn't involved in any active litigation, so they were perplexed by the challenge, but pleased to see the patent upheld.
"The Patent Office's recent decision on the '730 Patent confirms the strength of our patent portfolio," Digital Ally CEO Stanton Ross said in a release. "We have repeatedly said that Digital Ally is the leading innovator of new and life-saving technology for law enforcement and this most recent decision of the Patent Office further justifies our beliefs. Our patent portfolio is strong, robust and the envy of the industry. We remain hopeful that Axon will recognize our innovation and rightful ownership of our valuable intellectual property, but if not, we will continue our fight."
Digital Ally has been engaged in a legal battle with Axon over its intellectual property for about three years now. Digital Ally says Axon is infringing on its patents for technology that activates a camera system when specified triggers — such as turning on emergency lights — occur. Digital Ally said the infringement led them to lose a lot of revenue.
The ongoing legal battle also has been taking a toll on the company's finances. Combined with the loss of business, the company was forced to cut about 40 percent of its workforce earlier this year. Digital Ally even submitted filings with the Securities and Exchange Commission that indicated it was concerned about the company's ability to continue as a going concern and that the board was reviewing its strategic alternatives.
But gaining several wins defending its patents enabled the company to sign a deal with Brickell Key Investments LP in August, receiving $10 million of working capital in exchange for a percentage of potential legal settlements or court awards.
Digital Ally also was able to sell 2.4 million shares of stock last week, raising about $6.75 million, which pushed the company above the minimum threshold of $2.5 million in stockholder equity that is required to remain listed on the Nasdaq exchange.