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Digital Ally Files Unfair Competition Lawsuit Against Utility Associates

LENEXA, KS -- (Marketwired) -- 06/06/14 -- Digital Ally, Inc. (NASDAQ: DGLY) ("Digital" or the "Company"), the industry leader in law enforcement video technology, today announced that it has filed an Unfair Competition lawsuit against Utility Associates, Inc. ("Utility") in the United States District Court for the District of Kansas.

Digital contends that Utility has defamed Digital and illegally interfered with Digital's contracts, customer relationships and business expectancies by falsely asserting to Digital's customers and others that Digital's products violate the so called Boyken '556 Patent, of which Utility claims to be the holder. Digital has already instituted proceedings in the United States Patent and Trademark Office to annul the '556 Patent, and Utility itself has admitted, in the context of prior litigation between these parties that, in truth, it does not claim that Digital's products infringe upon, or that Digital or its customers have infringed upon, the '556 Patent.

Digital's suit also includes claims against Utility for tortious interference with contract and violation of the Kansas Uniform Trade Secrets Act (KUSTA), arising out of Utility's employment of a former Digital employee, in violation of that employee's Non-Competition and Confidentiality agreements with Digital. In addition to damages, Digital seeks temporary, preliminary, and permanent injunctive relief, prohibiting Utility from, among other things, continuing to threaten or otherwise interfere with Digital's customers. Digital has requested, and is awaiting, a hearing upon the Motion for Temporary Restraining Order and Preliminary Injunction, which it filed contemporaneously with its Complaint against Utility.

"We believe these attacks upon our products by Utility Associates are the result of the dominance of our legacy in-car video products and the excitement and impressive traction that our new products, such as the DVM-800 and VULink, are gaining in the marketplace," stated Stanton E. Ross, Chief Executive Officer of Digital Ally, Inc. "The DVM-800, in particular, is attracting the attention and interest of many domestic and international law enforcement agencies. We believe Utility Associates is targeting our customers and prospective customers with its marketing campaign, which consists largely of sending out letters to them designed to create fear and otherwise deter them from purchasing our products."

"We are confident in our ability to prevail in the proceedings we have instituted in the U.S. Patent and Trademark Office and the lawsuit we have filed against Utility Associates," continued Ross. "We will continue to fully support our customers' right to purchase and utilize our products. Our customers can be assured that Digital Ally will defend and indemnify them against any and all threats of infringement alleged by Utility Associates in its letters and alleged lawsuit."

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. For additional information, visit www.digitalallyinc.com.

The Company is headquartered in Lenexa, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY".

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 FirstVU HD and DVM-800 will continue to generate an increasing portion of the company's total sales; whether the Company will be able to adapt its technology to new and different uses, including being able to introduce new products; the outcome of the Company's proceedings in the U.S. Patent and Trademark Office to annul the '556 Patent; whether and the extent to which the patents allowed by the US Patent Office will give the Company effective, enforceable protection of the intellectual property contained in its products in the marketplace; the outcomes of the Company's litigation with various parties, including Utility Associates; 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 as a result 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, 2013 and its quarterly report on Form 10-Q for the three months ended March 31, 2014, as filed with the Securities and Exchange Commission.

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