Ocado is being sued for patent infringement on its trademark automated robotic picking systems which have been the sole driver of its rise to prominence.
AutoStore, a Norwegian retail technology firm, has demanded that Ocado stops making and selling the technology after filing legal papers with high courts in the US and London.
It comes just days after Ocado briefly became the most valuable supermarket in the UK, with analysts citing the very same technology as the driving force behind its stock price rally.
Should AutoStore win the case not only would Ocado be forced to pay hundreds of millions in damages, but it would have to scrap deals to supply 54 automated systems to seven of the world’s largest supermarkets on which it has largely staked its future.
“Since 1996, AutoStore has developed and pioneered technology that has revolutionised retail storage and order fulfillment, and is driving the growth of online retail,” AutoStore’s chief executive Karl Johan Lier said.
“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.”
Ocado said it was investigating the claims, adding that it had not received any papers in relation to the case from AutoStore.
It said in a statement: “We are not aware of any infringement of any valid AutoStore rights and of course we will investigate any claims once we receive further details.
“We have multiple patents protecting the use of our systems in grocery and we are investigating whether AutoStore has, or intends to infringe those patents. We will always vigorously protect our intellectual property.”
Ocado’s shares have fallen by more than seven per cent since AutoStore filed legal papers.