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Analyst: Body-Cam Patent Suit Win Would Be A Big Deal For Digital Ally, Not So Much For Taser

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Analyst: Body-Cam Patent Suit Win Would Be A Big Deal For Digital Ally, Not So Much For Taser

After Digital Ally, Inc. (NASDAQ: DGLY) mentioned advancing its patent suit against TASER International, Inc. (NASDAQ: TASR) during Wednesday’s fourth-quarter earnings call, Westpark Capital analyst Ishfaque Faruk told Benzinga a Digital Ally victory would prompt either a licensing agreement with or a buyout by Taser.

“In the event of a DGLY win, Taser would have to stop using auto-activation technology in its body-cameras, and auto-activation of body cameras have become a key requirement in RFPs by law enforcement agencies,” Faruk said. “So, in the event of a DGLY win, Taser would have to license Digital Ally’s technology for which they have a patent and/or make an acquisition play for Digital Ally.”

Either outcome would be “a major event” for Digital Ally, a $30-million market-cap company much smaller than the $1.2-billion Taser.

“On a relative basis, the impact on TASR is not as big,” Faruk said.

The Battle Continues

The lawsuit was first filed in January 2016, and a timeline for the settlement is currently unknown.

“The fight’s really not been in the courtroom so much as it's been at the patent office,” CEO Stan Ross said on the conference call. “My thinking would be, depending on how the patent office responds, that is really going to set the tempo of all these companies that we are after, that we believe will violate our patent.”

The courts delayed a Marksman hearing scheduled for Wednesday, and Digital Ally anticipates the patent office to announce its findings later in the second quarter.

Taylor Cox contributed to this report.

Related Links:

Taser And Digital Ally’s Competition Extends Beyond The Market

TASER Dominated Body Cam Rival Digital Ally In Q3

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Image Credit: By Ryan Johnson [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

 

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