Digital Ally Obtains Key Admission From Utility Associates in Patent Litigation

Digital Ally, Inc. DGLY ("the Company"), a leading provider of mobile digital surveillance systems for law enforcement, security, and commercial applications, today announced the following developments in its litigation against Utility Associates, Inc. ("Utility"). Digital Ally initiated litigation against Utility in the United States District Court for the District of Kansas in October 2013. The lawsuit sought a declaration that the Company's mobile video surveillance system did not infringe any claim of Utility's '556 Patent. In so doing, Digital sought to protect itself and its current and prospective customers from Utility's campaign of sending letters threatening that the use of such systems purchased from third parties not licensed to the '556 Patent would create liability for patent infringement. In those letters, Utility makes baseless threats of possible infringement upon a purported "patent" of questionable validity that has never been enforced and that Utility only recently purchased. The District Court has dismissed Digital's lawsuit because it decided that Kansas was not the proper jurisdictional forum for the dispute. The Court's decision was not a ruling on the merits of the threats made by Utility regarding its patent. Nothing in its ruling addressed the issue whether Utility's threats were proper or justified. In the course of the proceedings Utility made a key admission to the District Court: namely, that it has not accused Digital Ally of any patent infringement. Digital Ally's Chief Executive Officer, Stanton E. Ross, stated, "We are disappointed in the Judge's ruling and in Utility's attempts to avoid the substance of our claims by opposing the lawsuit on a purely jurisdictional basis rather than on the merits. It is clear to us that Utility wants to avoid answering for its misconduct in front of a Kansas jury." Digital Ally has already filed a notice of appeal on the issue of whether this dispute can be heard in Kansas and plans to continue its legal proceedings against Utility to protect its customers, products, and reputation. Such proceedings will include filing an appropriate action with the U.S. Patent and Trademark Office to invalidate the '556 Patent in the near future.