A Favorable Ruling For Digital Ally In Patent Suit Would Be A 'Game Changer'

Ruling Allows Discovery

While noting a Federal Court ruling allowing Digital Ally to commence discovery on its anti-trust claims against Taser, analyst Ishfaque Faruk said the former can now request for documents and interrogate of Taser employees, ex-employees, consultants and customers.

Case

The lawsuit pertains to claims that Taser willfully infringed on the 292 patent held by Digital Ally by selling and offering to sell its Axon Signal auto-activation technology. Additionally, Digital Ally had alleged that Taser bribed officials to win non-bid contracts for its products in violation of state and federal anti-trust laws.

Related Link: Taser's Axon Flex 2 Camera Should Start Shipping By Year-End

Lawsuit Win = Game Changer

The firm believes should Digital Ally win the lawsuit, it could be a big deal for the company, given it is seeking treble damages and injunctive relief. Under such a scenario, Taser, being the industry leader in body worn cameras, would be forced to license the technology from Digital Ally, the firm said. Consequently, the firm sees Digital Ally benefiting from market share gains and a big monetary award from Taser.

Westpark Capital also sees the new in-car video system launched by Digital Ally to see accelerated adoption in the marketplace.

Reiterating Rating, Price Target

Westpark Capital reiterated its Outperform rating and $9 price target on the shares of the company. The reiteration is premised on the firm's belief that the company will be the beneficiary of increased spending on security products by law enforcement agencies as well as commercial clients. The firm also indicated that its $9 price target may prove conservative in the eventuality of a favorable judgment for the company.

At last check, shares of Digital Ally were up 0.70 percent at $5.74, while Taser was down 0.19 percent at $23.17.

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