The Axon-Digital Ally Lawsuit May Not Proceed To Trial

The patent battle between Axon Enterprise Inc AAXN and Digital Ally, Inc. DGLY continues.

Although WestPark Capital reported Tuesday that the next hearing was delayed by the court for six to nine months for “complications regarding the documents and the legal process,” Axon said the hearing might not happen at all.

A company spokesperson told Benzinga Wednesday that a stay was requested back in January and approved March 20. As a result of the stay, the district court judge overseeing the case vacated all litigation dates, pending resolution of outstanding, relevant motions.

Axon had previously filed four petitions with the Patent Trial and Appeal Board (“PTAB”) — the last filing was on January 12 — to challenge the validity of the claims on the patents in question, and is awaiting word on the PTAB decision.

The judge’s approval of the stay might suggest a belief that the PTAB could rule in Axon’s favor and thus render the entire court process unnecessary. Court documents obtained by Benzinga show all PTAB decisions are expected by early August.

Axon and Digital Ally: A History

The lawsuit against Axon was first filed in January 2016, with both stocks reacting positively to the news.

At the time, Axon — formerly “TASER” — released a statement calling the lawsuit “frivolous and egregious.”

“TASER values patent rights, including those of our competitors, and as such, we use a best practice intellectual property (IP) clearance process before starting any technology project,” Taser General Counsel Doug Klint said at the time.

The result of the case will prove critical to both companies involved. A Digital Ally victory would significantly bolster its business while requiring Axon to either license its competitor’s products or initiate a buyout.

Axon shares closed at $24.59 and Digital Ally $3.90.

Ezra Schwarzbaum and Taylor Cox contributed reporting.

Image credit: Marcelo Freixo, Flickr

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