Axon Sues FTC Over Vievu Acquisition and Divestiture Dispute
Friday, January 03, 2020 | Comments

Axon filed a lawsuit against the US Federal Trade Commission (FTC) in the United States District Court for the District of Arizona in Phoenix. In its 29-page complaint, Axon asked the court to declare the FTC's structure and administrative procedures unconstitutional, and to adjudicate the legality of Axon’s Vievu acquisition in a federal court.

At dispute is the FTC's use of an internal administrative proceeding that Axon alleges violates its constitutional rights to due process and equal protection of law. In August 2018, Axon disclosed an FTC investigation into its 2018 acquisition of public-safety camera provider Vievu.

In a statement, Axon described Vievu as “a small, failing company acquired for only $7 million in cash and stock plus up to $6 million in potential earn-outs along with a holster supply agreement.”

The complaint alleges that the FTC Dec. 23 demanded that Axon divest the assets acquired in the Vievu acquisition and surrender its independently created intellectual property (IP) as part of a "blank check" to create a competing spin-off or else face an FTC proceeding.

“In other words, the FTC is seeking to deprive Axon of its intellectual property without due process, an unprecedented strong-arm position that should send a chilling message to the nation's technology-based industries,” Axon said.

In addition to demonstrating the FTC's alleged violation of Articles II and III of the U.S. Constitution, Axon's complaint alleges that the market for body cameras and digital evidence has remained competitive, with 10 competitors winning at least 55 sizable agency deals since the acquisition.

"No one should ever face the prospect of a government that can demand to seize your most precious assets without the ability to defend yourself in a fair and impartial court of law," said Rick Smith, CEO and founder of Axon. "If the FTC believes it has a strong case against us, it should prove it in federal court before a neutral judge. Our action today seeks to ensure that will happen."

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