IRobot Stock Holds Weekend Gains Made on News of Preliminary Injunction Win
Shares of Burlington, MA-based iRobot (NASDAQ: IRBT) are up this morning on last week’s news that the company had won a partial preliminary injunction against Robotic FX. The ruling is likely to prevent the Illinois firm from selling the Negotiator robot, which iRobot alleges in lawsuits in Alabama and Massachusetts is based largely on its PackBot.
As we wrote on Friday, the injunction ruling was issued that evening by U.S. District Court of Massachusetts Judge Nancy Gertner after the stock market closed. IRobot closed Friday at $16.84, down $0.26. On September 13, it had hit a high for the year of $24.23. The next day, after hours, the military awarded a $279.9 million contract to Robotic FX to deliver its Negotiator for bomb-detection duty in the Middle East. The following Monday, September 17, iRobot’s stock fell off a cliff, losing nearly 6 points, or 23 percent of its value, to $18.27. It has since tumbled further.
Today is looking to be a different story. The stock opened up $2.06 (12-plus percent) from last week’s close and so far seems to be holding on to the gain.
IRobot issued a press release early this morning noting that it is ready to take over the Army contract so that bomb-detection robots will not be delayed in reaching troops. “We are pleased with the court’s decision,” said iRobot CEO Colin Angle in the release. “We stand ready to deliver our field-proven iRobot PackBots to aid our warfighters in their dangerous missions.”
The exact terms of Gertner’s ruling are under seal because trade secrets are involved. However, on Friday iRobot attorney Michael Bunis told us that the injunction was based on the tracks of the robot and the process by which they are made. Gertner found that other, undisclosed mechanical aspects of the Negotiator did not violate iRobot’s trade secrets because they were disclosed in iRobot patents—an argument recently made by Robotic FX’s attorneys.
You can find background on the whole iRobot-Robotic FX case here. And the injunction ruling is here.