|[April 15, 2014]
Utility Announces Digital Ally's Lawsuit Demanding a Declaratory Judgment of Patent Non-Infringement Has Been Dismissed by the US District Court
TUCKER, Ga. --(Business Wire)--
Utility, the makers of Rocket Vehicle Routers, Atlas video recorder
systems, and other popular Situational Awareness technologies for mobile
resource management, announces a Declaratory Judgment lawsuit filed by
Digital Ally (DGLY) in October 2013 has been dismissed by Sam A. Crow,
U.S. District Senior Judge of Topeka, Kansas.
Utility President Ted Davis stated, "I was very surprised when I read
Digital Ally's lawsuit filing, which included the following statement:"
Digital Ally has invested substantial resources into manufacturing and
promoting the current technology resident in its advanced digital video
systems. Such resources could have been dedicated to re-designing, as
necessary, around the technology claimed in the '556 patent.
"Digital Ally then further stated:"
Digital Ally reasonably believed that the '556 Patent would not be
asserted against its products and continued to manufacture and promote
these products through its nationwide sales and distribution channels.
Davis further stated, "Since patents are presumed to be valid, we would
have thought that Digital Ally would have wanted to determine if they
were infringing on a patent. To me, Digital Ally seems to have this
backward. Rather than the patent owner trying to run down every possible
infringer, I would think that a manufacturer would want to take steps to
avoid infringement or obtain a valid license to a patent. In any event,
I was pleased by the Court's decision."
"We are pleased that Judge Crow has dismissed the Digital Ally lawsuit
seeking a Declaratory Judgment that Digital Ally products do not
infringe on our Boykin '556 patent," stated Robert McKeeman, Chairman
and CEO of Utility. "This lawsuit filed by Digital Ally in October 2013
was always puzzling to us. Digital Ally never contacted us before filing
their lawsuit to discuss their issues and concerns. We only learned of
the lawsuit by reading a Digital Ally October 28, 2013 press release. In
that press release, Digital Ally stated that 'Digital Ally will be
taking steps to invalidate the '556 patent through appropriate
procedures at the United States Patent and Trademark Office'. However,
as late as yesterday, we have not been notified by the US Patent Office
of any US Patent Office challenge to our Boykin '556 patent submitted by
Digital Ally or by any other party. Patents are presumed to be valid
when issued, but we agree there is a process to challenge issued
patents. We understand that challenging the claims of a patent can be an
uphill battle and very expensive. We are confident the US Patent Office
did a very thorough patentability analysis between the original patent
application filing in 2001 and awarding the Boykin '556 patent in 2004.
We continue to believe that the patent is valid. Furthermore, a
reputable Fortune 500 manufacturer and marketer of legal evidence video
camera systems in 2009 paid a seven-figure sum to purchase a license to
the Boykin '556 patent. We believe that shows others believe the patent
is valid too."
The Judge's Order dismissing the Digital Ally lawsuit inluded the
Since March of 2006 Plaintiff has been selling products which use
technology similar to that used in Defendant's products covered by the
'556 Patent. When the '556 Patent was owned by Defendant's
predecessor-in-interest, Plaintiff met with that owner to discuss
Plaintiff's technology and possible joint ventures and/or acquisitions.
Based on that predecessor's knowledge of Plaintiff's technology and its
silence regarding any infringement, Plaintiff believed that the '556
Patent would not be asserted against its products so continued to
manufacture and promote them through its nationwide sales and
"So obviously Digital Ally knew about the Boykin '556 patent long before
the Boykin '556 patent was acquired by Utility," stated McKeeman.
"Perhaps Digital Ally could have purchased the Boykin '556 patent before
we purchased it for a considerable sum, but they did not. Instead,
Digital Ally sued our company. It is important to note that we did not
counter-sue. Many factors go into such a determination. Consideration of
investing legal fees and management time in a lawsuit always has to be
balanced with the likelihood of actually collecting damages if the
lawsuit is successful."
"We believe in providing compelling value to our customers now and in
the future," stated McKeeman. "We had our best 4th quarter
ever in 2013, while Digital Ally in their 2013 Earnings Conference Call
held on March 27, 2014 stated they had their worst 4th
quarter in years. Our company is privately held and does not publicly
release financial data. However, based upon public information from
published DGLY SEC (News - Alert) filings for sales and employee count, I can report
that our sales appear to be significantly higher than Digital Ally's
sales in the 4th quarter of 2013. And on a per employee basis
in the 4th quarter 2013, Utility sales per employee also
appear to be significantly higher than Digital Ally's sales per
employee. Yet further, it is public record from SEC filings that Digital
Ally had an operating loss of $1,573,958 in 4th quarter 2013,
and a Balance Sheet 'Cash and Cash Equivalent' account balance of
$454,978 on December 31, 2013. So we were concerned that collecting on a
judgment resulting from a potential successful counter-suit might be in
question. Instead of filing lawsuits, we are focused on providing
reliable mission-critical vehicle communications and legal evidence
capture and distribution software as a service, vehicle video recording
and wireless router hardware, and patented Intellectual Property
solutions that our customers can rely on for the long term."
McKeeman further stated, "In Digital Ally's 2013 Earnings Conference
Call held on March 27, 2014, Digital Ally CEO Stan Ross referred to our
company as a 'Patent Troll'. This was surprising to us, because our
company manufactures, sells, and supports a legal evidence video
recorder solution covered by the claims included in the Boykin '556
patent. The term 'Patent Troll' commonly refers to an entity that owns a
patent but does not actively make, import, or sell a product covered by
the claims in the patent, and instead seeks to collect revenue by
selling licenses to the patent. We have not offered to sell a Boykin
'556 patent license to Digital Ally, so we don't understand why Mr. Ross
would refer to our company as a 'Patent Troll'. We definitely are not a
'Patent Troll'. In fact, only one license to the Boykin '556 patent has
ever been sold."
Executives at Utility extend gratitude to existing and future customers.
Added Davis, "We are extremely proud of our products and recognize that
the word is getting out far and wide about them. We appreciate our
long-standing customers and all of the new organizations working with us
as we work to ensure that the video management software as a service and
hardware we sell are among the best in the business, and include a
license to the Boykin '556 patent."
For more information about this and other products offered by Utility,
contact the company via www.utility.com.
About Utility, Inc.
Utility, Inc. develops, manufactures and supports video recorder
systems, web browser-based video management software as a service,
vehicle routers and an RCM / AVaiL / Vehicle Diagnostics / RFID tag (News - Alert)
software as a service that allows First Responders, Transit Agencies,
and Utilities to effectively command, control and support mission
critical field operations, and reliably record and transmit video,
audio, and metadata legal evidence. Utility delivers real-time
information about virtually any mobile asset, providing a unified
operating picture for safe, effective, and efficient mobile field
operations. Utility's Video Recording Systems and Rocket Vehicle Routers
are engineered, designed, assembled, configured, and tested in Tucker,
Georgia, USA. Utility also owns the Silvernail '548 patent for Video
Recording in Public Transit vehicles, and has Patents pending for
automatic switching between the best available 3G and 4G cellular
communications, Ultrafast Video Upload Access Point (News - Alert) with automatic load
balancing across multiple access points, and other situational awareness
Intellectual Property. The Remote Configuration Management, AVaiL and
DataSync software as a service are developed and supported at the
company headquarters in metro Atlanta, Georgia, USA and is hosted at
secure data centers in metro Atlanta and Wisconsin USA. Utility is
venture capital-backed by Braemar Energy Ventures. For more information,
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