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Robot wars - Ocado sued by AutoStore over patent infringement

10/01/2020 | 12:37pm EST
FILE PHOTO: An Ocado delivery van is driven along a road in Hackney, London, Britain

British online supermarket group Ocado was hit with a lawsuit by robotics company AutoStore on Thursday for allegedly infringing patents, prompting it to retaliate that it would investigate whether the Norwegian firm infringed Ocado patents.

Ocado - which this week became the most valuable retailer on Britain's stock market - has only a 1.7% share of Britain's grocery market. However, its state-of-the-art technology for robotically operated warehouses has spawned partnership deals with supermarket chains around the world, underpinning a stock market valuation of over 20 billion pounds.

AutoStore said it had filed patent infringement lawsuits in the United States and the United Kingdom. AutoStore said Ocado has been its customer since 2012.

AutoStore argues that its storage system and robots are the foundation on which the "Ocado Smart Platform" (OSP) technology was built and on which Ocado's business today is based, and seeks financial damages.

"Our ownership of the technology at the heart of Ocado's warehousing system is clear," said AutoStore CEO and President Karl Johan Lier in a statement.

"We will not tolerate Ocado's continued infringement of our intellectual property rights in its effort to boost its growth and attempt to transform itself into a global technology company," he added.

AutoStore, founded in 1996, is also seeking to bar Ocado and its partners from making and selling the products involved, and from importing them into the United States.

Ocado, whose shares have more than doubled so far in 2020 as the company benefited from a boom in online grocery shopping during the pandemic, were down 5% at 1349 GMT. It said AutoStore's statement was the first it had heard of the new claim.

"We are not aware of any infringement of any valid AutoStore rights and of course we will investigate any claims once we receive further details," it said.

But Ocado also turned the tables on AutoStore. The UK company said it had its own patents protecting the use of its systems and would investigate whether AutoStore has, or intends to infringe those.

"We will always vigorously protect our intellectual property," it said.

On Tuesday Ocado overtook Tesco as Britain's most valuable retailer by market capitalization.

Ocado, founded in 2000 by three former Goldman Sachs bankers, including CEO Tim Steiner, struggled for years to make a profit but has been transformed by partnership deals with supermarket groups including Kroger in the United States, Marks & Spencer and Morrisons in Britain, Casino in France and Aeon in Japan.

Ocado's deal with Kroger, inked in 2018, will see at least 20 automated warehouses built in the United States, with the first due to open in early 2021. The deal was seen as key in Kroger taking on Amazon.

(Reporting by Vanessa O'Connell in New York and James Davey in London; editing by Keith Weir and Susan Fenton)

By James Davey and Vanessa O'Connell

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
OCADO GROUP PLC 2.11% 2229 Delayed Quote.70.84%
TESCO PLC 1.16% 227.2 Delayed Quote.-12.03%
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