AutoStore mulls appeal over patent row: Should you hold Ocado (OCDO)?

March 12, 2022 02:22 AM AEDT | By Priya Bhandari

AutoStore mulls appeal over patent row: Should you hold Ocado (OCDO)? — Image source: Stokkete, Shutterstock

Appeal to US court

The online grocery retailer Ocado Group Plc had earlier won a trade case against its warehouse robot maker, AutoStore. The case threatened Ocado Group’s plans to grow its robotic warehouses into the US.

Now, AutoStore has expressed its intention to appeal in a US federal court, against International Trade Commission’s (ITC) decision for the Federal Circuit. Ocado did not immediately react to its rival’s plan.

Background of the case

It all started when AutoStore sued Ocado for patent infringement in the US in October 2020, and since, then both the companies that develop automated storage and retrieval systems (ASRS) for the online shopping industry have been in a series of legal battles over intellectual property (IP) rights.

In December last year, the ITC’s Chief Administrative law judge Charles Bullock held three AutoStore patents as invalid and said that the fourth patent was not infringed by Ocado, while AutoStore abandoned its claim over a fifth patent the night before the trial.

Both the rivals are considered the biggest most contender for the opportunities of growth in the rapidly growing market for automated warehouse robots, which led to battles over the rights to the inherent technology. Both have the potential to disrupt each other’s plans. Another legal case between the two rivals is in the UK High Court and is expected to begin on 15 March 2022, which could last for four weeks.

Ocado Group said in a statement that all 33 of the patent infringement claims against the company had been confirmed either invalid or non-infringed for a second time, which indicates how misguided AutoStore’s claims have been. However, AutoStore has expressed its confidence in the litigation positions and said that it will continue to pursue them.

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Ocado’s share price performance

Ocado Group Plc (LON:OCDO) is an innovation-led business and a leader in technology and engineering solutions, with over 950 patent applications and granted patents that protect its intellectual property. The company is a constituent of the FTSE 100 Index. The market cap of the company stands at £8,888.27 million as of 11 March 2022.

Ocado’s shares were trading at GBX 1,251.00, up by 5.79%, at 8:10 AM (GMT), on 11 March 2022. Over the last one year, its share value has depreciated by -40.31.

Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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