Ocado and Autostore settle three-year dispute over ecommerce technology

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Online grocery 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 £200 million as part of the deal on 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 infringed on its intellectual property, and asked the US International Trade Commission to stop the retailer from importing British-made robots into the US.

According to Ocado, under the agreement, all patent lawsuits filed by the companies will be withdrawn and both businesses will be allowed to continue using and marketing their existing products.

“I am delighted that we have worked together to resolve our differences and can now continue to focus on what we do best – innovating, growing and enabling partners to access world-beating technology,” said Tim Steiner, chief executive of Ocado.

Mats Hovland Vikse, CEO of Autostore, said: “We are delighted to have achieved a resolution that gives both companies the opportunity and freedom to commercialize our extensive patent portfolio. This agreement puts aside our differences and allows us to focus on our respective business goals.

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

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

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

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

Ocado shares soared 19 percent on the news.

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

Hovland Vikase said this year that it is lowering the upfront cost of its technology for customers in a bid to boost sales.