Derry robotics firm parent mired in international patent fight
As IPO is launched, AutoStore Systems of Norway involved in suit-for-suit battle with industry rival
AutoStore Systems Inc., a Derry company that sells logistical robotic systems for warehouses and whose Norwegian parent is launching a $1.8 billion initial public offering in Oslo on Monday, is engaged in worldwide patent infringement litigation that has found its way into a federal court in New Hampshire.
“The robot wars,” as they are dubbed in the technology press, is now being fought through two suits filed in U.S. District Court in Concord, both filed by Ocado Innovation, a United Kingdom firm that claims AutoStore stole its patented technology.
AutoStore says that it developed its technology on its own, and in another litigation claims it is Ocado that is doing the copying. Litigation is also ongoing in London, Germany, Virginia and before the U.S. International Trade Commission.
AutoStore, founded in 1996, says it has 20,000 robots in 650 installations in more than 40 countries at facilities owned by such companies as UPS, Volkswagen, Gucci, Crocs, Johnson & Johnson, Pfizer and Thermo Fischer Scientific
Although AutoStore has number of U.S. customers, its U.S. headquarters in Derry were opened in January 2018 – a 20,000-square-foot facility used to store equipment and spare parts, house customer, training and sales support and a demonstration grid.
Calls and emails to the company to provide an update and a comment on the litigation were not returned by deadline.
At the time, AutoStore was owned by a Swedish private equity firm, with the equipment made in Poland, and had three large sales partners, Bastian Solutions (a unit of Toyota), Dematic and Swisslog, which handles most of the sales installation and support.
It was later sold to another private equity firm, Thomas H Lee Partners, in April 40 percent of the firm was sold yet again to Softbank, which paid $2.8 billion and is selling off an estimated $1.83 billion of its holdings in an IPO scheduled in November.
The company reported that it expects the stock to be traded $3.20 to $3.68 a share. If so, that would mean the total value of the company could exceed $12 billion, indicating the growth of warehousing and online shopping during the pandemic.
Battle over technology
But the launch is occurring in choppy legal waters over the very technology that makes AutoStore so valuable.
In its suit, Ocado, which works primarily in the grocery industry – Kroeger is one of its customers – characterizes AutoStore’s legacy red-line system as outdated and says the robots had difficulty passing things to each other in the most efficient manner. Ocado claims to have developed a solution with its “hive” technology. Ocado proposed they work together. AutoStore traveled to one of Ocado’s automated warehouses in the United Kingdom and later expressed interest but then abruptly cut off discussions, according to the suit.
Then, in late 2020, AutoStore came out with its black line robotic grid system and a software product called Router, seeming to be making a bid for the grocery market. Ocado claims that AutoStore’s system is similar to its hive technology. AutoStore thought the technologies were similar too and filed a patent infringement claim against Ocado in UK high court before the U.S. International Trade Commission at the end of 2020.
In January, Ocado struck back in New Hampshire, claiming it was AutoStore that is infringing on its patents. It also filed an antitrust complaint in the Eastern District of Virginia in February and a complaint in the district courts of Mannheim and Munich in Germany in March.
According to one account in Charged, a UK retail news website, Ocado lost one legal skirmish in London. But on Aug 13 in New Hampshire, Judge Joseph Laplante denied AutoStore’s motion to dismiss the complaint as “one of many offensives in a multi-front legal battle between commercial competitors.”
Laplante was not convinced that Ocado’s patent was just “a patent-ineligible, abstract idea” and that although “allegations of direct pre-suit knowledge of the patents-in-suit are wanting, it has plead other circumstantial proof of knowledge that is sufficient to support both induced and willful infringement claims.”
AutoStore answered the complaint two weeks later, saying it invented its robot system in 2010 and it was available commercially as 2012, and it countersued, asking the judge to rule that Ocado’s patent was invalid.
“AutoStore developed its pioneering technology independently, without relying on or even knowledge of Ocado’s patented technology,” says the counterclaim.
Ocado’s latest suit targets a different patent, having mainly to do with the robot and grid setup. In that suit, Ocado alleges that AutoStore’s IPO motivated the theft of its intellectual property.
“Under pressure to produce profit — and having passed up the opportunity to work in partnership with Ocado — AutoStore deliberately decided to copy Ocado’s Cubic AS/RS technology and pass it off as AutoStore’s own, particularly to target online grocery merchants.”
As of deadline, AutoStore has not responded to the latest suit in court.