Axon Enterprise Inc (NASDAQ: AAXN) and
Digital Ally, Inc. (NASDAQ: DGLY) are
nearly four years into an ongoing patent
dispute, and ambiguity over continued litigation is meant to be settled with rulings from the U.S. Patent and Trademark
Office.
The district court judge overseeing the case had issued a stay and vacated
future trial dates as Axon awaited the USPTO’s decisions on four filed petitions. The judgments ultimately impact the validity of
Digital Ally's claims and could result in dismissal.
So far, Axon has received responses for only two petitions, a company spokesperson said Wednesday.
"One petition was granted and the other was rejected, so the IPR [Inter Partes Review] challenge for the '292 patent is
proceeding with the petition granted, and we believe we can prevail on this petition to invalidate Digital Ally's patent," Steve
Tuttle, VP of strategic communication, told Benzinga.
The 292 patent was the original point of dispute. Digital Ally filed claims for 452 shortly after.
"Even though one petition was granted and one denied, the bottom line is that only one is necessary to invalidate the entire 292
patent," Tuttle said in an email. "It was granted on ALL challenged claims."
The PTAB deadline on 452 patent claim 10 IPR petition is July 11, 2017, Tuttle said. The final one won’t be ruled on until
August, which relates to Claim 1 of the 452 patent.
"If the PTAB invalidates the patents based on the IPRs, the litigation is over," Tuttle said. "Because the one IRP institution
on the 292 patent was granted on ALL claims, the denial of the other petition on the same patent is irrelevant."
The Phazzer Story
Axon is engaged in a
similar legal battle with PhaZZer Electronics, Inc. and recently celebrated favorable rulings. The firm anticipates continued
success going forward.
"This is Phazzer's second attempt to invalidate Axon’s patent and avoid infringement liability through reexamination proceedings
in the USPTO," a spokesperson said. "Phazzer's first attempt failed when the patent office reconfirmed the patent’s validity in
mid-March 2017 with only a slight modification to one of four independent claims. Phazzer’s second reexam effort citing second tier
prior art will fare no better."
Taylor Cox contributed reporting.
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