Shares in online grocery delivery firm Ocado (OCDO), which has been among the best-performing stocks year-to-date, dropped 4.5% to £25.96 on Friday marking two successive days of losses after Norwegian company AutoStore accused it of infringing technology rights.

In its response, Ocado said it ‘has not received any papers in relation to these claims’ and that until yesterday it knew nothing about them. It also reassured investors it had ‘multiple patents protecting the use of our systems in grocery, which it would ‘vigorously protect’ while it investigated the claims.

AutoStore, based in Nedre Vats, Norway, is a robot technology company which says it ‘invented and continues to pioneer cube storage automation, the densest order-fulfilment solution in existence’.

Yesterday afternoon the firm released a statement claiming the automated storage and retrieval system used in Ocado’s Smart Platform unlawfully infringed its patented technology. The news sent Ocado shares down 5% initially.

AutoStore said it had filed complaints in courts in the US and the UK and would seek to bar Ocado and its partners ‘from manufacturing and selling infringing products and importing them into the United States’, as well as seeking financial damages.

‘Our ownership of the technology at the heart of Ocado’s warehousing system is clear. We will not tolerate Ocado’s continued infringement of our intellectual property rights in its effort to boost its growth and attempt to transform itself into a global technology company’, said AutoStore chief executive Karl Johan Lier

The firm claimed that a court in Norway had already found it was entitled to ‘ownership of its patents covering the robots’ central cavity technology’, and accused it Ocado of ‘selling that technology – as well as other AutoStore-owned technology – as its own’.

Analyst Clive Black of Shore Capital, a noted bear of the UK online delivery firm, commented: ‘Time will tell how this all pans out, which could possibly be extended, and no doubt it will be a boon for the respective lawyers. What we did feel interesting about this particular story, however, is that Ocado’s shares actually reacted negatively to the news.’

READ MORE ABOUT OCADO HERE

Issue Date: 02 Oct 2020