Although TASER International (NASDAQ: TASR) is best known for its stun guns, which provide 82% of its revenue, an important and growing component of its business is in police body cameras and evidence-management systems.
Although that market is dominated by smaller outfits like WatchGuard Video, Safariland’s Vievu, and Digital Ally, TASER’s Axon cameras are grabbing more contracts with police departments — some 3,500 U.S. departments have purchased its systems.
But rival Digital Ally has sued TASER, saying Axon cameras violate patents its own for camera designs, a point TASER has contested. Now, TASER is counter-suing the small competitor, challenging the validity of those patents.
TASER claims it previously pointed out that Ally didn’t invent “auto-activation” camera technology, which existed prior to the patents filed in 2013, and charges the camera maker with “inequitable conduct” for failing to disclose highly relevant prior art. It points to a PowerPoint presentation TASER made in 2009 that clearly shows its Taser Communications (TACOM) wireless activation in both weapons and vehicle light bars.
In addition to defending itself, TASER is now affirmatively going after the validity of its competitor’s patents.
TASER’s sales of Axon body cameras jumped almost 75% last quarter, and with most police officers already carrying stun guns already, it’s clear the company’s future growth will be coming from other markets. Staking out a position as the leader in body cameras as it did with electric weapons will be key to TASER International’s success.
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Rich Duprey has no position in any stocks mentioned.
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