Ocado and AutoStore settle three-year row over ecommerce tech

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Online grocer and robotics company Ocado and its Norwegian rival AutoStore have settled a three-year intellectual property dispute, the UK-listed retailer said on Saturday.

AutoStore will pay Ocado £200mn as part of the deal over AutoStore’s ecommerce automation technology, Ocado said in a statement without giving a reason for the payment. 

AutoStore, which provides ecommerce robotics to customers including Ikea, Puma and Gucci, claimed in 2020 that Ocado had infringed its intellectual property, and asked the US International Trade Commission to prevent the retailer from importing British-made robots to America.

Under the agreement, all the patent litigation claims the companies filed will be withdrawn and both businesses will be allowed to continue to use and market their existing products, according to Ocado. 

“I am pleased that we have worked together to resolve our differences and can now continue to focus on what we do best — innovating, developing and enabling partners to access world beating technology,” said Tim Steiner, Ocado’s chief executive. 

Mats Hovland Vikse, CEO of AutoStore, said: “We are glad to have achieved a resolution that gives both companies opportunity and freedom to commercialise our extensive patent portfolios. This settlement resolves our differences and allows us to continue focusing on our respective business goals.”

Ocado, which is one of the most shorted stocks on the London market, is best known for its online retail business in the UK. But the company has staked its future on selling its robotic warehouses to traditional supermarkets. 

The UK retailer started selling its ecommerce technology to other retailers in 2013 and now counts Kroger in the US and Groupe Casino in France among its clients. 

According to estimates compiled by Bloomberg, analysts forecast that Ocado’s international ecommerce business could generate £1.1bn of revenue and £600mn of underlying earnings by 2030, compared with sales of just £66mn in 2022.

The retailer this week recorded a pre-tax loss of £289.5mn for the six months to May 28, up 37 per cent year on year, but said that its technology business had been profitable for the first time. 

Ocado shares rose 19 per cent on the news.

AutoStore, which is part owned by SoftBank, has struggled since its stock market debut in October 2021, losing more than 40 per cent of its value by the end of 2022.

Hovland Vikse said this year that it was reducing the upfront cost of its technology for customers in a bid to expand sales.