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
_______
Image Credit: By Ryan Johnson [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.