Mar 31, 2023
Ocado Shares Jump After It Beats Norwegian Robot Rival in London Court
(Bloomberg) -- Ocado Group Plc shares gained after the automated warehouse maker won a key UK ruling against Norwegian rival AutoStore Holdings Ltd. in a long-running global dispute over patent infringements.
A London judge invalidated the two remaining patents at the heart of the disagreement, Ocado said Thursday. The pair have been locked in a global legal fight for years over Ocado’s warehouse system where robots move thousands of customer orders as they glide around a chessboard-like grid.
Ocado shares rose as much as 7.9% Friday while AutoStore fell as much as 11%. The Norwegian company, which filed the infringement case, said it disagrees with the judgment and the ruling has no impact on its business or operations.
The decision is an important victory for Ocado, which argued that its approach to robot designs couldn’t be considered an infringement of AutoStore’s inventions. The Norwegian company’s lawyers argued that its technology was the foundation of Ocado’s system and that Ocado’s robots infringe its patents.
A European appeal board upheld one of the patents in issue as valid just a few weeks ago, AutoStore said.
While there are about 20 players worldwide that handle fulfillment of online grocery orders, the cube-shaped automation systems of Ocado and AutoStore are seen as potential winners because they save a lot of space, analysts say.
The two companies have been quarreling over patents in various jurisdictions since 2016 but the battle heated up just before Ocado signed an agreement for its Smart Platform with Kroger Co., one of the biggest US supermarket chains.
Earlier this week Ocado Chief Executive Officer Tim Steiner commented on Kroger slowing the development of its robotic warehouses, saying the retailer wants to make sure its existing facilities “work as well as they can before they roll out loads.”
Kroger said Wednesday it’s expanding a grocery delivery business in Austin, Texas in its alliance with Ocado.
The patent-infringement cases have been a concern for Ocado as investors feared it could affect the expansion of the licensing business.
The fight is set to drag on. Ocado’s own infringement claims against AutoStore will continue in Germany and the US.
--With assistance from Deirdre Hipwell.
(Updates with shares in third graph, CEO quote in eighth)
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