AutoStore loses ASRS patent fight against Ocado

This image is figure 1 in the Ocado patent #US9796080. | Image credit: USPTO

AutoStore lost its patent infringement lawsuit against British online supermarket group Ocado Group. Both companies develop automated storage and retrieval systems (ASRS) that operate on similar principles. AutoStore, a Norwegian company, filed the lawsuit with the  International Trade Commission (ITC).

U.S. ITC Judge Charles Bullock said three AutoStore patents are invalid, while Ocado doesn’t infringe upon a fourth. AutoStore abandoned its claim over a fifth patent the night before the trial. Judge Bullock found no violation of AutoStore patent rights by Ocado. AutoStore plans to challenge the decision before the full commission, which will review the findings and issue a final verdict in April 2022.

“Today’s decision has no impact on AutoStore’s ability to sell its product in the U.S. or globally,” AutoStore said in a statement.

Judge Bullock also rejected AutoStore’s request to ban Ocado, and its partners, from making and selling the products involved and from importing them into the U.S. “We have consistently stated that Ocado does not infringe any valid AutoStore IP, and we are pleased that the judge has now agreed with us,” an Ocado spokesperson said.

Ocado said it will continue to pursue its claims against AutoStore for patent infringement in Europe and the U.S.

Bad blood

This story began when AutoStore sued Ocado for patent infringement in the U.S. in October 2020. In the early months of 2021, Ocado counter sued AutoStore to protect its intellectual property in the United States, the United Kingdom and Germany. The impasse was likely initiated by AutoStore when Ocado signed a distribution agreement with US grocer Kroger.

AutoStore filed a petition to review claims 1–23 of Ocado’s U.S. Patent No. 9,796,080 (“the ‘080 patent”) in U.S court in October 2020 (IPR2021-00798). The ‘080 Ocado patent was filed on June 12, 2014 and granted on October 17, 2017. The ‘080 patent describes a system for managing shipment containers, the system comprising of a storage-and-retrieval system made up of a structural framework defining a grid of storage locations configured for receiving a plurality of containers.

AutoStore lost its request for inter partes review against Ocado.  An inter partes review is a new trial proceeding conducted at the U.S. Patent Board to review the patentability of one or more claims in a patent only on a ground that could be raised under §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications.

ASRS systems from AutoStore (left) and Ocado.

About the companies

Ocado has become one of the largest grocery providers in the world with a market cap of $16 billion at press time.

AutoStore went public with an IPO on the Oslo Stock Exchange on October 20, 2021. It is one of the leading ASRS providers on the market with a current market cap of $15 billion. So there is a lot at stake here for both companies. AutoStore customers include retail chains Asda in the UK, Best Buy in the U.S., and Lufthansa in Germany.

AutoStore earned $84.7 million in revenue in the third quarter of 2021. Its revenue is up 95% from $43.4 million in Q3 of 2020. AutoStore began 2021 with an outlook goal of $300 million in revenue by the end of the year. So far, it’s brought in $234.4 million, putting it on track to reach its goal by the end of the year. In its earnings report, AutoStore reported $140 million in order intakes for Q3, bringing its order intakes for the year to $422.5 million.

Now that AutoStore is a public company, it is required to list any lawsuit costs for its shareholders. The company released a document that states that AutoStore envisages lawsuit expenses between $15 and $20 million.

The ASRS systems from both companies operate on similar storage and retrieval principles. Items are stored in bins stacked in a grid and retrieved by mobile robots from above the stack. It is unclear where the differentiation is between the solutions.

The Robot Report will continue to follow this story as it develops.