Ocado and AutoStore settle a three-year dispute over e-commerce technology

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Online grocery and robotics company Ocado and its Norwegian rival AutoStore are in a three-year intellectual property dispute, the UK-listed retailer said Saturday.

AutoStore will pay Ocado £200m as part of a deal related to AutoStore’s e-commerce automation technology, AutoStore said in a statement without giving reasons for the payment.

AutoStore, which provides e-commerce bots to customers including Ikea, Puma and Gucci, claimed in 2020 that Ocado had violated its intellectual property, and asked the US International Trade Commission to prevent the retailer from importing British-made bots into America.

According to the agreement, all patent litigation claims filed by the companies will be withdrawn and both companies will be allowed to continue using and marketing their existing products, according to Ocado.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 – innovation, development and enabling partners to have access to world-beating technology,” said Tim Steiner, CEO of Ocado.

Mats Hovland-Fix, CEO of AutoStore, said: “We are pleased to have reached a decision that gives both companies the opportunity and freedom to market our extensive patent portfolios. This settlement resolves our differences and allows us to continue to focus on our own business goals.”

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

The UK retailer began selling its e-commerce 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 expect Ocado’s international e-commerce business could generate £1.1bn in revenue and £600m in underlying profit by 2030, compared to sales of just £66m in 2022.

The retailer this week posted a pre-tax loss of £289.5m for the six months to May 28, up 37 percent year on year, but said its technology business was profitable for the first time.

Ocado shares rose 19 percent on the news.

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

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

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