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Ocado Faces Fresh Patent Infringement Lawsuit in U.K.

AutoStore Technology AS filed another lawsuit against Ocado Group Plc.

Ocado Faces Fresh Patent Infringement Lawsuit in U.K.
An Ocado Group Plc grocery delivery truck at a fulfillment centre in Enfield, U.K. (Photographer: Hollie Adams/Bloomberg)

AutoStore Technology AS filed another lawsuit against Ocado Group Plc, arguing that it is the inventor and rightful owner of some of the U.K. online delivery company’s patents.

The Norwegian maker of automated storage and retrievals systems is seeking ownership of the patents already secured by Ocado for its “smart platform” technology. It has filed an action in the Intellectual Property Office of the U.K.

AutoStore filed complaints in American and British courts last month claiming that Ocado was infringing its intellectual property and patents. It sought injunctions to stop Ocado and its U.K. partner, Tharsus Group, from expanding in the two countries and asked the U.S. International Trade Commission for an order preventing the importation of Ocado’s “infringing products.”

AutoStore believes that its warehouse system, in particular the system for moving and lifting robots around stacked storage bins to retrieve items, is at the base of the British online grocer’s technology.

Ocado Faces Fresh Patent Infringement Lawsuit in U.K.

In its latest action, AutoStore said Ocado “received substantial technical information and know how” on a “good faith basis” when it was a customer of AutoStore in 2012 and then filed its own patents, naming Ocado Chief Executive Officer Tim Steiner as an “inventor.” AutoStore is seeking orders that affirm it is the “true owner of the patents” and a declaration that Steiner and other Ocado managers have no right to be named as inventors.

“Ocado took advantage of being our customer and having access to AutoStore’s market-leading technology and then attempted to assert ownership over what it had learned from AutoStore by filing its own patents,” Karl Johan Lier, AutoStore CEO and president, said in a statement.

Ocado shares fell as much as 12% in London. They had doubled this year.

Technology Company

While the legal dispute continues, Ocado is pushing to expand its model into new markets. Much of the company’s value comes from its potential as a technology company and its ability to roll out automated warehousing systems and software to retailers globally. Ocado recently signed agreements with grocers Kroger Co. in the U.S., and Marks & Spencer Group Plc and Wm Morrison Supermarkets Plc in the U.K.

Any suggestion that Ocado has stolen AutoStore’s intellectual property is “absurd,” said Jessica Reid, a spokeswoman for the U.K. company.

“These inventions are ours and we will continue to defend our intellectual property by whatever means necessary,” she said. “Ocado is entirely confident in the integrity of its intellectual property portfolio and the disciplined approach we have taken to building our capabilities and the Ocado Smart Platform over the past 20 years.”

The company said last month that it has multiple patents protecting its systems and was investigating whether AutoStore had infringed its patents.

AutoStore was founded in 1996. Its technology is used in large warehouses to organize storage and prepare orders for customers in retail, health care and aviation, including Britain’s Asda Stores Ltd., Best Buy Co. in the U.S. and Deutsche Lufthansa AG in Germany.

Ocado was founded in 2000 by three former Goldman Sachs Group Inc. bankers -- Steiner, Jason Gissing and Jonathan Faiman. Only Steiner, who is CEO, remains active in the business. While it started out as an online partner of Waitrose, the upmarket grocer, its main focus and growth potential now lies in selling licenses for its technology and delivery systems.

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