iRobot v. Robotic FX, Redux
Mine-detecting robots, Delorean-driving trade-secret-swiping engineers, dumpster-diving detectives. Ring any bells? When last we wrote about the iRobot-Robotic FX case, just before Christmas, Burlington, MA-based iRobot (NASDAQ: IRBT) was riding off into the sunset with a $286 million Army contract, a bunch of assets handed over by its vanquished Alsip, IL-based rival, and a promise that the firm’s founder, Jameel Ahed, wouldn’t set foot in the industry for five years.
We had been following the twists and turns of the case—and believe me, there were many—ever since last August, when iRobot filed suit against Robotic FX in two separate courts charging, essentially, that the Illinois firm’s Negotiator robot was a knock-off of iRobot’s PackBot and that Ahed—a former iRobot employee—had stolen key elements of the military robot’s design. To be perfectly honest, by the time the cases were settled in iRobot’s favor by consent decree, Bob, Wade, and I were all ready for a break from the espionage and legal wrangling—and the thousands of pages of court filings we had to pore through to piece together a story about which, understandably, few sources were willing to talk on the record.
But just because we had our fill of the story doesn’t mean it’s not still a page-turner. And for those of you looking to turn a more manageable number of pages than we did, the latest issue of Wired has a recap that’s well worth a gander. (And I’m not just saying that because its writer, Noah Shachtman, graciously credits the daily reporters who covered the story at the time, including Bob and Wade.)
Many of the details are familiar (and I’m not just saying that because in his gracious mention of Xconomy Shachtman included the guys but not me), but entertaining nonetheless. Shachtman recounts, for example, how Ahed was going head-to-head with his former employer in the “xBot” competition—the prize for which was the biggest-ever Army robot contract—while at the same time shredding evidence and playing laptop hide-and-seeks with the U.S. marshals sent to help enforce a temporary restraining order. (Despite the pending litigation, the Army would go on to initially award the contract to Robotic FX, which had bid just $6.1 million less than iRobot in the reverse-auction phase of the xBot process.)
Shachtman also sheds new light on a couple of the questions that nagged at us throughout the case: Why the Army was putting so many of its eggs in such a small, sketchy-seeming basket (Robotic FX was really just a handful of people working out of a basement under Ahed’s dad’s dental practice), and why Ahed thought he’d get away with appropriating iRobot designs and trashing evidence.
Shachtman explains that some military officials, including Ed Ward, the Marine colonel who oversaw the xBot competition, had long been fans of the Negotiator—particularly because it cost only a fraction of what iRobot was charging for the PackBot. He writes: “In meetings with robot makers, military officials liked to bring up the Negotiator—and its price. ‘They absolutely used it as a club against us,’ a former iRobot employee says. When the xBot competition came along, that club turned into a sledgehammer. The xBot specs essentially asked for a smaller, lighter, stripped-down PackBot—in other words, a Negotiator. The reverse auction put a premium on low cost. It was as if the specs had been written for Ahed.”
And Shachtman was able to track down (though not name) the defense contractor that had promised to buy Robotic FX and manufacture the thousands of robots it would take to fulfill the xBot contract if Ahed’s firm won it. (The firm teamed up with Robotic FX after what from Shachtman’s description sounds like were some less-than-subtle hints from Ward.) Though the contractor knew that iRobot would accuse Robotic FX of patent infringement, “We were prepared to spend hundreds of thousands to defend ourselves,” an executive for the firm told Shachtman.
As the dust was settling, iRobot said it spent some $2.9 million to litigate and settle its cases against Robotic FX. So in the end, it seems, smaller price tags lost all around.