January 04, 2005
TASER® International Files Litigation Against Stinger Systems, Inc. for False Advertising and Unlawful Patent Marking
Suit alleges NASDAQ listing, ISO certification, ATF certification, patent marking, corporate history, and competitive claims are false
SCOTTSDALE, AZ - TASER® International, Inc. (NASDAQ: TASR), a market leader in advanced non-lethal devices, announced that it has filed a lawsuit in United States District Court for the Western District of North Carolina against Stinger Systems, Inc. alleging that Stinger Systems has engaged in a pattern of false advertising and unlawful patent marking in violation of federal law.
The following outlines issues related to the lawsuit that was filed on December 17, 2004:
False Advertising as Alcohol, Tobacco and Firearms (ATF) Certified and ISO 9001 Certified
Stinger Systems claims in its advertisements that it is "ATF Certified" and that it has ISO 9001 quality certification through the Quality Management Institute ("QMI"). The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) does not certify any products; they merely regulate products that are classified as firearms. In addition, based upon our inquiry to QMI, Stinger Systems is not ISO 9001 certified through QMI.
False Advertising as the First ATF Certified Less-Lethal Weapon
Stinger Systems claims in its advertisements that its Stinger product is the first "ATF Certified" stun gun in its headline, "Finally… An ATF Certified Less-Lethal Weapon." In fact, Tasertron (a company whose technology was acquired by TASER International in June 2003) manufactured and sold less-lethal projectile stun weapons using explosive propellants that were regulated by the ATF beginning in the 1970's.
False Advertising of NASDAQ Listing
Stinger Systems has claimed on its website but later removed it in November that it is "a publicly traded company on the NASDAQ." In fact, Stinger Systems has never been listed by NASDAQ. Stinger Systems' claims are false, misleading and misrepresent Stinger Systems stock listing registration in violation of federal law.
False Patent Marking
Stinger Systems claims in its website and press releases that its four-dart system is patented and that the two patents they claim to have purchased from James F. McNulty, Jr. protect its Stinger four-dart projectile stun gun. In fact, the McNulty patents do not appear to cover any aspect of Stinger Systems stun gun but rather cover unrelated prisoner restraint devices and an attachment accessory for an older Tasertron device. The Patent False Marking Statute (35 U.S.C. Section 292) makes it an offense to use in advertising the word "patent" in connection with any unpatented product for the purpose of deceiving the public. Furthermore, in a press release of November 17, 2004, Stinger Systems announced it "has received a patent pending by the United States Patent office for its ground-breaking QuadraShock™ technology." This statement is further misleading in that it attempts to convey or establish merit of their submission when, in fact, the U.S. Patent and Trademark Office does not issue a "patent pending" but rather only issues a file number to acknowledge receipt of a patent application. Issuance of a patent application number in no way reflects the likelihood of patentability or claim of novelty.
False Advertising of Corporate History
Stinger Systems makes the statement on its website that it was founded in March 2000 as Electronic Defense Technology, LLC. However, in its Pink Sheet Information Statement filed on November 9, 2004, Stinger Systems states that it was organized under the laws of the State of Nevada under the name United Consulting Corporation on July 2, 1996 and that it changed its name to Stinger Systems, Inc. on September 27, 2004. Stinger Systems' claims are false and misleading and misrepresent Stinger Systems corporate history and stun gun expertise in violation of federal law.
False Advertising as to Accuracy, Effectiveness, Power and Range
Stinger Systems has falsely advertised that its Stinger product is more accurate, more effective, has more power and has a greater range than the TASER X26 device. These statements are blatantly false and misleading. In fact, Stinger employees informed a TASER International representative that the fictitious Stinger device is not even at a prototype stage and that the videos shown on the Stinger System website were staged with probes being placed on the test subjects for maximum effect and not actually being fired from the Stinger device itself. Stinger Systems has no measured or tested effective range contrary to its false advertising claims. Independent test results on existing devices have found that TASER device gas powered projectiles were more accurate than explosive propellant fired projectiles which are similar to those being advertised by Stinger Systems. Test data also show that the TASER devices are more effective in achieving incapacitation and have a higher power rating than the low power systems such as the Ultron II circuit that Stinger Systems claims to be using in its non-existent Stinger product. Stinger Systems does not have comparative test data to substantiate any of its false advertising claims as to accuracy, effectiveness or range in violation of United States 15 U.S.C. Section 1501, et. seq. The Federal Trade Commission has been notified.
"We are concerned that Stinger Systems would engage in such reckless, blatant and malicious false comparative advertising concerning the TASER product, misrepresenting their corporate history, falsely claiming NASDAQ listing, ATF certification and ISO 9001 certification, and using false patent marking all in violation of federal law," said Rick Smith, CEO of TASER International. "We are very concerned that these illegal acts by Stinger Systems have damaged our company, the law enforcement community and Stinger System shareholders who had bid the company's valuation from virtually zero to a peak over $200 million based upon this misleading information. We have notified NASDAQ, the United States Securities and Exchange Commission, the United States Bureau of Alcohol, Tobacco and Firearms, the Federal Trade Commission and the Quality Management Institute of these illegal acts," concluded Smith.
About TASER International, Inc.
TASER International, Inc. provides advanced non-lethal devices for use in the law enforcement, military, private security and personal defense markets. TASER devices use proprietary technology to safely incapacitate dangerous, combative or high-risk subjects who pose a risk to law enforcement officers, innocent citizens or themselves. TASER technology saves lives every day, and the use of TASER devices dramatically reduces injury rates for police officers and suspects and reduces litigation costs. TASER technology is currently in testing or deployment at over 6,000 law enforcement and correctional agencies in the U.S. and abroad. For more information on TASER life-saving technology, please call TASER International at (480) 444-4000 or visit our website at www.TASER.com.