Yesterday, Handal & Associates filed new patent infringement lawsuits creating a flurry of trading on the penny stock of e.Digital Corp. (EDIG). Having successfully handled their cases in the past, three additional lawsuits filed against SanDisk Corp. (SNDK), Philips Electronics N.A. Corp. and Grundig Intermedia GmbH brings the total number of lawsuits against makers and resellers of infringing products to six. It’s no surprise EDIG stock has maintained its moving average ever since the Company received a favorable ruling from the United States Patent and Trademark Office in September.
Considering its not the first time e.Digital has been involved in an infringement case, their successful past with Handal & Associates as their counsel indicates a win could send EDIG into a mini-breakout.
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EDIG Stock Chart
Market Cap: 23.44M
Close: 0.08, up 0.005 (6.67%)
Dollar Volume: $67,793
Average Trade Size: 15,484
Issued and Outstanding: 293,003,158
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Revenues for the Company were down significantly for the three months ended June 30, 2012 compared to the same period in 2011 from $2,181,815 to $132,546. The sharp decline was directly related to $2,025,000 for patent license fees booked in the period ended June 30, 2011. That said, the September acceptance by the USPTO for the supplemental declaration filed in response to an earlier rejection of one claim in the Company’s patent US 5,742,737 is great news for investors. The anticipated announcement allowed early September traders to see gains of over 140%.
The chances of the new lawsuits filed for infringing on the Company’s patents could be a huge boost for investors familiar with the history e.Digital has had in the court room.
In September 2007 and March 2008, the Company filed complaints against eight electronic product manufacturers in the U.S. District Court for the Eastern District of Texas asserting that products made by the companies infringe four of the Company’s U.S. patents covering the use of flash memory technology. By September 30, 2009 the Company had licensed and settled the litigation with seven of the manufacturers and suspended the complaint against one defendant in bankruptcy.
In November 2009 the Company filed an additional patent infringement complaint in the United States District Court for the District of Colorado against nineteen companies that manufacture devices using flash memory. By March 31, 2012 the Company had licensed and settled the litigation with twelve of the defendants, suspended the claim against one defendant, and dismissed with prejudice the remaining six defendants, thereby ending the Colorado patent litigation case.
This new filing against six companies could be the beginning of a long list that could eventually lead to some big money for e.Digital, something they are already sitting well with having reported $2.85 million in cash as of June 30, 2012 to budget quarterly operating expenses which have been averaging roughly $400,000.
About EDIG Stock
e.Digital Corporation is a holding company incorporated under the laws of Delaware that operates through a wholly-owned California subsidiary of the same name. The Company markets the eVU™ mobile entertainment system for the travel industry and licenses and enforces its Flash-R™ portfolio of patents related to the use of flash memory in portable devices.
Click here to view the SEC filings for EDIG.
Bottom Line: Like VRNG, EDIG and their patent infringement lawsuit could be a decent pay out for penny stock speculators willing to sit through the waiting period. Based on the successful legal history of these cases for the Company, it could be a two or three year wait before seeing a big bang on EDIG stock.
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