According to reports, the Norwegian robotics firm AutoStore™ will pay $257.1M to the British online fulfillment company Ocado Group as part of a deal between the companies to settle all outstanding patent litigation claims. AutoStore filed a lawsuit against Ocado in 2020 alleging patent infringement.
Under the announced deal, all the patent litigation claims will be withdrawn globally and both firms can continue to use and market all their own existing products without challenge. AutoStore will pay the $257.1M to Ocado in instalments over a two-year period.
I have been interviewed many times about this topic. When asked what I thought would happen, I stated that Ocado should prevail but that anything can happen in a courtroom. I also stated that I believed there would be an eventual out-of-court settlement the longer the case dragged on.
Speaking only for me, I continue to believe that the lawsuit between Ocado and AutoStore is an example of what happens when anger and egos collide in business. Instead of stepping back and considering all options, AutoStore CEO Karl Lier, made the decision to launch what I consider to be one of the worst lawsuits in the automation industry.
AutoStore, now being led by Mats Hovland Vikse, has gained a well-deserved reputation for being a leader in the use of cube-based systems for fulfillment. AutoStore serves customers globally across different industries including fulfilling online orders for grocery retailers. I think the company has done a great job of designing, manufacturing, and selling their technology.
Ocado is a pioneer in the use of robots and advanced software to fulfill online grocery orders from what they refer to as Customer Fulfillment Centers (CFC). Founder and CEO Tim Steiner is brilliant. Tim is Ocado’s biggest cheerleader and defender. I’ve always been a fan of Ocado. In 2016, I recommended to Amazon to acquire the company.
As a consultant for Kroger in 2017, I recommended that they acquire or partner with Ocado.
Instead of a lawsuit, Ocado and AutoStore should have merged. Both companies use similar technology. Both companies serve the same industry – retail – with each specializing in fulfilling online orders for grocery retailers. Both companies also have the ability to fulfill orders for department stores, specialty retailers, and Big Box stores. Ocado and AutoStore are a great fit for each other.
In addition, Ocado AutoStore could have acquired Instacart and ended Ocado’s exclusivity agreement with Kroger. This would have allowed Ocado AutoStore to approach Instacart’s grocery partners and convert them to automated fulfillment via MFCs and CFCs. Eventually, Ocado AutoStore could have converted Instacart to an online grocery retailer selling direct to customers.
A combined Ocado – AutoStore – Instacart would be worth around $35B.
It can still happen.
