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A service for business professionals · Wednesday, June 20, 2018 · 452,456,362 Articles · 3+ Million Readers

DIGITAL ALLY WINS ANOTHER SIGNIFICANT VICTORY AT PATENT OFFICE WITH DENIAL OF AXON’S REQUEST TO INVALIDATE DIGITAL'S '292 PATENT

Axon loses, again, on its fifth try to invalidate Digital’s patents

LENEXA, Kansas, June 04, 2018 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (Nasdaq: DGLY), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, is pleased to announce a major victory in its legal battles against Axon Enterprise, Inc. (“Axon” formerly known as TASER International, Inc.). To date, Axon has filed an ex parte reexamination challenge and four different inter partes review (“IPR”) challenges against Digital Ally’s patents with the United Stated Patent and Trademark Office (the “Patent Office”). Axon’s desperate attempts to have Digital’s patents invalidated have all been unsuccessful.

Over two years ago and before releasing its Axon Signal product, Axon began its campaign to try to invalidate Digital’s patents. The Axon Signal product contains the technology at the heart of Digital’s patents and of the patent infringement lawsuit Digital Ally filed against Axon. Its first attempt, an ex parte reexamination, failed. Axon then filed four separate IPR challenges against Digital Ally’s Patent Nos. 8,781,292 (the “ ‘292 Patent”) and 9,253,452 (the “ ‘452 Patent”). The Patent Office rejected both petitions against the ‘452 Patent and one of the petitions against the ‘292 Patent.  Further, on June 1, Axon lost again on the last IPR challenging the ‘292 Patent. In that decision the Patent Office disagreed with every argument of Axon, found all challenged claims of the ‘292 Patent valid, and noted that Axon “has not demonstrated by a preponderance of the evidence that the challenged claims are unpatentable.”

Though the ‘292 Patent is no longer at issue in the Axon litigation, Axon had tied many of its arguments relating to the ‘452 Patent in the litigation to the pending ‘292 IPR. With this loss—along with the other four losses—Axon’s arguments are now significantly curtailed.  The Patent Office’s decision yet again confirms the strength and validity of Digital Ally’s patents, as well as the inadequacy of Axon’s invalidity arguments. This loss largely leaves only infringement and damages to be resolved in the litigation. Additionally, because Axon waited until nearly its one-year bar date to file these IPRs, Axon is now barred from filing any further IPRs against the ‘292 and ‘452 Patents.

Digital Ally also filed a lawsuit against WatchGuard for patent infringement in 2016 on three different patents, the ‘292, 452, and ‘950 Patents. WatchGuard joined Axon in this attempt to invalidate the ‘292 Patent. Thus, with this loss, WatchGuard’s defenses on the ‘292 Patent are now severely limited leaving, essentially, infringement and damages to be determined. WatchGuard previously lost its challenge on the ‘950 Patent. WatchGuard is barred from filing any further IPRs challenging any of the three patents asserted against it in the infringement lawsuit. Finally, this win effectively eliminates WatchGuard’s ability to argue that the litigation stay should be maintained.

“We sincerely hope that this latest win validating our patented technology shows the industry that Digital is the true inventor of auto-activation, not Axon,” said Digital Ally’s CEO, Stanton Ross. “Cities and police departments across the country should now understand that we are the rightful inventors and owners of this technology,” said Ross. “Instead, Axon has built its body camera business on the back of our technology hoping to cover itself by having the patents invalidated,” he continued. “To justify its actions, Axon has undergone a significant invalidity campaign spending massive amounts of money and time trying to invalidate our patents. Not a single one of these efforts has been successful. We remain hopeful that the Patent Office’s wholesale rejection of Axon’s arguments will help it come to grips with its weakened position. If not, we remain committed to having a jury decide this dispute. We are excited for the Court to begin to move both cases towards trial where a jury can finally end Axon’s and WatchGuard’s infringement and assess damages due to Digital Ally,” Ross concluded.  

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial applications. The Company's primary focus is digital video imaging and storage. The Company is headquartered in Lenexa, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY."  

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This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934.  These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management.  Therefore, actual results could differ materially from the forward-looking statements contained in this press release.  A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: whether the Company will achieve positive outcomes in its litigation with Axon and WatchGuard; whether the Patent Office’s rulings will curtail, eliminate or otherwise have an effect on the actions of Axon and WatchGuard respecting the Company, its products and customers; competition from larger, more established companies with far greater economic and human resources; its ability to attract and retain customers and quality employees; the effect of changing economic conditions; and changes in government regulations, tax rates and similar matters.  These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company’s disclosures.  The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements.  The reader should consider statements that include the words “believes”, “expects”, “anticipates”, “intends”, “estimates”, “plans”, “projects”, “should”, or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking.  The Company does not undertake to publicly update or revise forward-looking statements, whether because of new information, future events or otherwise.  Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2017 and quarterly report on Form 10-Q for the three months ended March 31, 2018, filed with the Securities and Exchange Commission.

For Additional Information, Please Contact:
                    
                    Stanton E. Ross, CEO, at (913) 814-7774 or
                    Thomas J. Heckman, CFO, at (913) 814-7774

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