Viewpoint: Peace breaks out in robotic patents war?

Following a three-year-long legal dispute over alleged patent infringement, Ocado and Norwegian robotic tech company, AutoStore, have reached an out-of-court settlement. But the robot patent war is far from being over.

While the agreement between the two companies is, in large part, confidential, it has been made public that AutoStore will pay Ocado £200m in instalments, presumably to compensate the latter for the commercial use of certain patented technologies.

Robotic patents

It has also been revealed that both companies will be sharing elements of their respective patent portfolios with each other under licence – specifically those that pre-date 2020 – but they can also continue to earn royalties by licensing them independently to third parties too. Crucially, Ocado has retained exclusive rights to its Single Space Robot, which is currently under licence to companies in the US, France and Australia.

In this case, it certainly seems that Ocado has come out on top, particularly as AutoStore initiated the dispute by bringing six patent infringement claims in 2020. Patent lawyers acting for Ocado decided to countersue in 2021, and the rest is history. However, AutoStore hasn’t come off too badly. While the outcome for AutoStore is costly, the business has effectively entered into a duopoly with one of its competitors; gaining access to useful technologies that could serve to strengthen its commercial position.

For Ocado, the out-of-court agreement will serve to underline the company’s increasing dominance as a warehouse tech innovator, while ringfencing its ‘crown jewels’ – the patented technologies that underpin its Single Space Robot. The £200m cash payment, which is payable over two years, is a significant amount – equating to about 10% of Ocado Group’s revenue in 2022. Additionally, the favourable out-of-court settlement will serve to promote the company’s expanding Ocado Solutions division.

If there is a key learning for potential litigators it should be that taking matters to court can sometimes backfire and an adversarial approach won’t necessarily deliver the best outcome. In the case of patent disputes, courts have the power to order an injunction to block the sale of any infringing goods, and require the infringer to pay compensation for lost revenue, but they can’t order the sort of mutually acceptable commercial agreement that has been reached here.

Cross-licencing

The cross-licencing agreement reached by Ocado and AutoStore is an example of a creative, cooperative arrangement that offers commercial advantages to both parties. Such agreements are not uncommon, but they rarely come to light due to the confidentiality surrounding them. As most experienced patent attorneys know, if you look deeply enough, there are often opportunities to reach a resolution that looks beyond a purely cash settlement.

Sometimes, the agreements reached represent a major commercial opportunity for the businesses involved. For example, businesses operating in different geographies could choose to settle their differences by forging a worldwide distribution agreement and boosting their respective revenue-generating potential as a result. Alternative dispute resolution is encouraged by UK courts and businesses should litigate only as a last resort. If a court hearing proves inevitable, any costs payable are likely to be reduced if the judge can see that genuine efforts have been made to resolve the matter out of court.

For robotics innovators, the risk of being infringed or facing an infringement claim is relatively high. This is because the patent landscape in this field of research and development is still evolving and attracting a steady stream of new entrants. Existing players are competing for market share. Protecting patented technologies is critical to their business model, and therefore, enforcement is more likely.

Creative

Before rushing to issue a cease and desist letter, robotic tech innovators who believe their patent portfolio has been infringed should seek advice from an IP professional who will discuss a complete range of options.

While the robot patent war is far from being over, the settlement agreed by Ocado and AutoStore could inspire more creative, commercial resolutions in the future.

Alexander Ford is Senior Associate at European intellectual property firm Withers & Rogers.