Robotics, IP, Legal

Slow Progress But High Stakes in iRobot–Robotic FX Tangle

Wade Roush 10/1/07

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iRobot had evidence that Ahed had actually read e-mails circulated in 2001 concerning technical aspects of the Packbot, or whether the details covered in the e-mails were incorporated into the design of the Negotiator. They then questioned Frost about an e-mail Ahed sent to iRobot contractor Michael Ciholas on May 30, 2002—just days before Ahed resigned from the company—asking for a complete copy of the electrical schematics for the Packbot’s electronics package. Frost said Ciholas told him the e-mail had set off “alarm bells” of concern because of the “totality” of the request; Robotic FX’s attorneys suggested that the request was not unusual, and that Ahed had merely been interested in making sure that a backup copy existed.

The courtroom was sealed during most of the testimony of the next witness (Timothy Ohm, a lead mechanical engineer at iRobot) and when reporters were allowed back into the courtroom, iRobot’s attorneys were energetically examining a new witness, Don Ditzenberger, a former employee of Wonder Molded Products. The Crystal Lake, IL, injection molding company, which apparently went out of business around 2005 (judging from a site listing items auctioned off from its machine shop), assisted Robotic FX with the extrusion of plastic treads for the Negotiator robot. iRobot’s attorneys had deposed Ditzenberger Sunday night about a declaration he had written at Ahed’s request, describing Wonder’s work with Robotic FX. The iRobot attorney, who focused on Ditzenberger’s account of various materials he had recommended to Ahed for the treads, seemed to be searching for inconsistencies in Ditzenberger’s declaration. As the time allotted to the hearing drew short, iRobot’s attorney said that he would be moving to strike Ditzenberger’s declaration from the record. The judge said iRobot’s attorneys were free to argue that the declaration “was not worth the paper it was printed on” but that it would be entered into the record nonetheless.

While it was difficult (at least for a lay observer) to see how today’s testimony will affect Gertner’s eventual ruling, Frost’s testimony, combined with transcripts released on Friday, make it clear how high the stakes are, for both companies for Ahed himself. The transcripts reveal, for example, that Robotic FX has a suitor, an unnamed major defense contractor which Ahed says in interested in acquiring the small firm. The emergence of another serious, deep-pocketed competitor on the robot scene—if indeed the purchase of Robotic FX went through—could portend big challenges for iRobot going forward.

At the heart of the matter before the Massachusetts and Alabama courts, of course, lies the question of whether Robotic FX stole iRobot’s intellectual property and trade secrets. The documents released last week show how Robotic FX, which holds no patents on its own, tried to get around the IP issue by asking the U.S. government to indemnify it against patent infringement as part of the $279.9 million contract. Ahed said he was advised on this matter by “some of our friends.” It turns out that the friends work for the defense contractor interested in buying Robotic FX (and in the process presumably making Ahed, the company’s sole shareholder, a multi-millionaire).

From the iRobot point of view, the stakes are similarly high. In testimony from September 24, Frost had time to elaborate on the point he repeated today—that the U.S. military’s choice of the Negotiator over the Packbot was a “big loss” that will have longstanding repercussions for iRobot. “The issue here is one of who becomes the preferred vendor for this brand new market, and the way this works is the first to the market that is established as the robot of choice for this particular market will become the entrenched solution for this market, and the reason that is because once a particular system is chosen, there’s a lot of investment that the U.S. military does around that,” Frost testified.

“They set up their spares system around the spare system associated with the particular solution, the training that happens,” he continued. “They train their operators on how to operate the particular solution….so what tends to happen in a program like this is a solution is chosen, and that solution is the entrenched solution for many, many years to come. It is very difficult to unwind that decision and go back.”

Frost’s words readily explain why iRobot is vigorously pursuing this case. For its part, Robotic FX says it did nothing wrong, that iRobot knew what its rival was doing for several years and only filed suit when it found itself with a more serious competitor than it had previously imagined. As Robotic FX attorney Alan Barry told the court on September 20, the first day of the hearing in Boston: “The fact of the matter [is that] this plaintiff waited two years to act. They wait until Robotic FX gets the award or is on the threshold of getting the award to now seek emergency relief from you.”

Whether that relief is coming may be revealed on Wednesday; stay tuned.