Ocado sued by rival over claims of robot patent breach

Online grocery giant Ocado is unlawfully selling its technology and robots in breach of patents owned by a rival Norwegian firm, according to court documents.

AutoStore said it is suing Ocado in the UK and US over the alleged breach, filing papers at the High Court in London and the International Trade Commission in America.

Bosses say the order is to bar Ocado and its partners from manufacturing and selling infringing products and importing them into the US – and says Ocado was even a customer of AutoStore in 2012.

Ocado Boss Tim Steiner
Ocado Boss Tim Steiner

The company is also suing for financial damages, thought to run into the hundreds of millions of pounds.

In the US filing, AutoStore points out that Ocado’s deal with US retailer Kruger to install its robotic smart platforms across 20 warehouses, saw Ocado bank 55 million dollars (£42.6 million) per site.

The company said it is seeking an order barring Ocado and its partner Tharsus Group from manufacturing and selling “infringing products and importing them” into the United States.

The filing in the High Court is calling on the courts to block sales of Ocado’s products from the UK too.

Chief executive of Autostore, Karl Johan Lier, said: “Since 1996, AutoStore has developed and pioneered technology that has revolutionised retail storage and order fulfilment, and is driving the growth of online retail.

“Our ownership of the technology at the heart of Ocado’s warehousing system is clear.

“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 explained that his system works with storage bins stacked vertically in a grid and stored in a cubic structure, with the bins retrieved by robots that travel on the top of the structure.

Around 500 installations and 18,000 robots across 30 countries are used by firms including UK supermarket Asda, US retailer Best Buy and German airline Lufthansa.

It added: “Ocado’s infringement of AutoStore’s AS/RS intellectual property – including the storage system and robots – is the foundation on which the “Ocado Smart Platform” (OSP) was built and on which Ocado’s business today is based.”

Several alleged infringements also include the “central cavity design” of the robots, the arrangement of the lifting mechanism and their in-wheel motors.

A court in Norway has already found that AutoStore is entitled to ownership of its patents covering the robots’ central cavity technology, it added.

Ocado’s technology has been sold around the world, with Marks and Spencer and Morrisons buying up services in the UK.

Prior to selling its tech services, Ocado struggled to turn a profit due to wafer-thin margins of only a few percent on its home delivery business.

Founder Tim Steiner insisted he would continue looking for outside investors to buy the technology – with the Kruger deal marking a turning point, eventually catapulting the firm into the FTSE 100.

The unprofitable grocery division was eventually bought by M&S and turned into a 50/50 joint venture, which offered online food delivery last month for the first time.

Ocado have been approached for comment.