Mimesis Law
21 September 2019

Taser Zaps Digital Ally Patent In Ex Parte Reexamination

Nov. 16, 2015 (Mimesis Law) — Back in September, we wrote about a patent challenge, in the form of an ex-parte reexamination, filed by Taser against a Digital Ally patent it deemed dangerous. At that point, the USPTO examiner reviewing the case issued a preliminary rejection of the patent claims. Digital Ally’s shares tumbled on that news, proving that this case was of interest to investors, based on their hopes that Digital Ally would one day be able to use the challenged ‘292 Patent as a means of extracting royalties from Taser. In that post, we noted that Digital Ally would have a chance to respond, and try to keep its patent alive.

Unfortunately for Digital Ally’s investors, the USPTO examiner has decided to issue a final rejection of all of the original claims of the ‘292 Patent. For its part, Taser was quick to release an exultory press release, capping off a terrible week for Digital Ally’s share price. Taser’s aggressive strategy appears to have been further validated by the recent decision, since the claims that survived re-examination are, at least in Taser’s opinion, considerably narrower than the rejected original claims that Taser had previously considered a threat. In its press release, Taser notes that it believes that the surviving claims are narrow enough to preclude a finding of infringement with respect to its key Axon Signal platform.

While Taser may feel that the threat has been removed, it is likely that Digital Ally will continue to try and keep its ‘292 Patent as robust as it can be. Considering the entry of the final rejection, and the need to narrow claims to keep the patent alive, it is a stretch to believe that Digital Ally’s original hopes for the patent will come to fruition. At the same time, the company has an obligation to make the most of the asset, and will likely appeal the examiner’s decision, or hope to find some other way of stunning Taser. The market will likely continue to reward or punish the company based on the success of that effort.

DGLY

Disclosures and Disclaimers:

Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. Questions or comments can be directed to me at gaston@markmanadvisors.com. All suggestions are welcome.

 

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