United States Patent Office Questions Validity of Utility Associates' Boykin '556 Patent and Institutes Inter Partes Review

LENEXA, KS--(Marketwired - Oct 3, 2014) - Digital Ally, Inc. (NASDAQ: DGLY) ("the Company"), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, today announced that it has been informed that the United States Patent Office has granted its request to examine the validity of certain claims of United States Patent No. 6,831,556 that was issued to Boykin (the "556 patent"), which is owned by Utility Associates, Inc. ("Utility"). 

The Company has been in litigation with Utility for the past year after Utility began targeting our customers and prospective customers with its marketing campaign. This campaign consisted largely of sending threatening letters to our customers designed to create fear and otherwise deter them from purchasing our products. The Company immediately took action to protect its customers and has filed two lawsuits in the United States District Court for the District of Kansas challenging Utility's actions. These lawsuits include claims by the Company that Utility has defamed the Company, illegally interfered with its contracts, customer relationships and business expectancies, and violated non-competition and confidentiality agreements by hiring former employees. Additionally, the Company believes that the '556 patent Utility was using to threaten its customers should never have issued and has initiated an action with the United States Patent Office to invalidate Utility's patent.

The Company has just received notice that the United States Patent Office has granted its request to examine the validity of certain claims of Utility's '556 patent. In its decision, the Patent Trial and Appeal Board declared that "we are persuaded, on this record, that [Digital Ally] demonstrates a reasonable likelihood of prevailing in showing the unpatentability of claims 1-7 and 9-25 of the '556 patent." Utility must now appear before the Board and defend the validity of its patent. Given the strength of Digital Ally's positions, it is confident that the Patent Office will ultimately determine these claims to be invalid.