AutoStore must think again as Ocado wins robotics patent trial
Instead of pursuing a legal challenge against Ocado Group, robotics firm AutoStore should invest time and effort into fixing its supply chain and business model issues.
That’s the view of Brittain Ladd, a former Amazon exec and supply chain consultant.
Ocado Group recently won a patent infringement lawsuit filed by AutoStore in the International Trade Commission (ITC).
AutoStore had filed the lawsuit last year in both the United States and the United Kingdom, claiming Ocado’s grocery picking robots infringed on its automated designs.
The ITC's Chief Administrative Law Judge held three of the four AutoStore patents were invalid while the fourth one was not infringed by Ocado. A fifth patent was abandoned by AutoStore the night before the trial.
The judge also rejected AutoStore's request for barring Ocado and its partners from making and selling the products involved, and from importing them into the United States.
AutoStore is set to challenge the decision before the full commission, which will review the findings and issue a final verdict in April 2022.
Ocado, meanwhile, is continuing to pursue its claims against AutoStore for infringement of its own patents in both the United States and Europe.
In a LinkedIn post, Ladd labels the lawsuit “arguably one of the weakest legal battles ever to be waged by a company”, and adds: “Note to AutoStore: You picked a fight with the wrong company. Ocado doesn't back down.”
He goes on to strongly advise Karl Lier, CEO and President at AutoStore, along with SoftBank Group Corp., and Thomas H. Lee Partners, the owners of the company, to “invest their time and effort into fixing AutoStore's supply chain issues that have resulted in lead times of nearly 14 months according to sources at AutoStore.”
Other issues also need to be addressed. “For example, AutoStore relies on multiple system integrators to sell and install its system. In my opinion, the model is flawed, and it doesn't provide customers with the best experience.”
The company should vertically integrate and acquire a system integrator to ensure the best installation process, and also manage all sales internally, Ladd argues. Owning the process end-to-end would reduce costs and complexity, improve the customer experience, and generate substantial additional value for AutoStore.
Don’t look back
As for Ocado Group, it should accelerate its growth and not look back.
“I support Ocado's investment in Zoom. However, I believe Ocado should give serious consideration to acquiring a robotics company to complement its suite of products. My vote is that it should acquire Berkshire Grey or Locus Robotics,” Ladd comments.
He adds: “I also encourage Ocado to acquire a rapid grocery delivery company with Flink and Gorillas the leading contenders. Note to Ocado: Rapid grocery delivery will soon turn into real-time retail delivery for nearly all retail products.”
The UK-based company should also become more aggressive in growing its business by encouraging M&A activity with Kroger.
“Kroger merging with Target, for example, would generate extensive growth opportunities for Ocado. A new CFC design to replenish groceries to Kroger’s stores should be explored,” Ladd writes.
“Think BIG, Ocado.”
