High-profile stun gun maker Taser (NASDAQ:TASR) delivered a sting to a potential rival today by filing a lawsuit against Stinger Systems alleging false advertising and unlawful patent marking. What with Taser's recent meteoric rise, it's no surprise the fight is on to keep would-be competitors at bay.
Taser alleges that Stinger Systems has falsely represented itself as certified through the Bureau of Alcohol, Tobacco, and Firearms, when in fact weapons are only regulated by that body and not certified at all. It also took issue with Stinger's claim to be ISO 9001 Certified through Quality Management Institute, stating that was not the case. (Read the press release here: It's pretty juicy stuff.)
It's well known that Taser, a Motley Fool Rule Breakers pick, is a stock that's been on the run this year. Not least of its strong points is its strength in the law enforcement market, where there's a great need for nonlethal devices. Indeed, it doesn't have any meaningful competition as of yet, a pretty remarkable selling point.
In a recent interview with our own Rule Breaking David Gardner, Taser's co-founder and President Tom Smith talked about his company's lack of real competition thus far. He also mentioned the 12 patents that Taser currently has to protect its technology, with 17 more applications pending, as well as the inevitability of upstarts trying to cash in on Taser's market.
That's what today's story is all about, though. Taser's defending its first-mover advantage and attempting to keep its dominance of the space for as long as possible. Sure, the situation with Stinger Systems sounds a bit like something out of the scandal sheets. (Again, the press announcement is interesting reading.) However, judging by the intense amount of investor interest in Taser, it's obvious that more situations like this will likely arise.
Regardless of whether you think Taser's a stock gearing up for shocking growth or that it's overvalued and about to deliver a shock to those investors who bought in, one thing is clear. It's going to have to defend the space it dominates. Investors would expect no less.
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Alyce Lomax does not own shares of any of the companies mentioned.
