The last time I saw a Negotiator robot was in a federal courtroom in Boston, where Jameel Ahed—the founder and CEO of Robotic FX and the defendant in an intellectual-property-theft lawsuit brought by his former employer, iRobot—was driving the nimble little device around the judge’s bench via remote control. Robotic FX lost that suit last December, and as part of the settlement agreement, the Chicago, IL-based startup closed down and handed over some of its assets to iRobot—including the plans for the Negotiator, a tank-treaded device that can climb stairs and carry equipment such as video cameras and hazardous-materials sensors.

Now the controversial robot is about to be reborn, as a full-fledged iRobot product that will be available by the end of the year to police, fire departments and other agencies that need an inexpensive reconnaissance device for dangerous situations.

Even before Robotic FX went out of business, iRobot’s allegations about misappropriated trade secrets had cost the tiny startup a $280 million contract to deliver some 3,000 bomb-detecting robots to the United States Army—a contract that was later awarded to iRobot (NASDAQ: IRBT). This was always the real payoff desired by the Bedford, MA-based robot maker, which had argued in court that Ahed had stolen elements of the design of its Packbot tactical robot, including methods for making the all-important treads, upon leaving the company in 2002. But it’s an interesting footnote to the case that by selling a few hundred Negotiators—which will be priced at about $20,000 apiece—iRobot may now be able to earn back the $2.9 million it spent on the Robotic FX lawsuit, and then some.

iRobot’s version of the Negotiator “is very much the design that came over as an asset in the settlement,” says Joe Dyer, president of iRobot’s government and industrial robots division. “The difference is that we have taken the robot, which was based on our design and our mobility but was being made, frankly, in a very crude production facility, and we have professionalized the quality, reliability, and manufacturing.” Ahed and a small group of employees had assembled their version of the robot in a basement space under Ahed’s father’s dental practice; iRobot, by contrast, is building the Negotiator at its engineering and manufacturing facilities in Mysore, India, outside Bangalore. … Next Page »

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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.

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In an era of irregular warfare, where troops must contend with roadside bombs and HAZMAT teams might confront bioweapons, one long-standing vision is for warfighters and first responders to be able to deploy autonomous robots to handle terrain-clearing and reconnaissance chores while the humans wait out of harm’s way. For several years now, iRobot’s Packbot robots have gone into battle to try to find improvised explosive devices and hunt for enemy troops. But these and other bots have some shortcomings that significantly limit their effectiveness. As company co-founder and chairman Helen Greiner told me in a phone call this afternoon: “Today, robots are somewhat blind. They feel their way around, or a person’s controlling them. And we believe the more the robots can do on their own, the more applications will open up for them.”

Greiner thinks iRobot (NASDAQ:IRBT) is on the verge of creating a new generation of robots with a much higher degree of autonomy than is currently possible. To that end, this afternoon, the Burlington, MA, robotics maker is announcing a deal with Santa Barbara, CA-based Advanced Scientific Concepts under which it has obtained the exclusive rights (in exchange for future purchasing commitments) to ASC’s 3-D Flash LADAR (for Laser Detection and Ranging) technology. IRobot, which is also taking an undisclosed minority ownership stake in ASC, believes the technology will provide new navigation and mapping capabilities for future generations of robots and unmanned ground vehicles (UGVs) and pave the way for autonomous vehicles to lead convoys into dangerous territory, search contaminated buildings for casualties, or enable bomb squads to safely investigate suspicious objects. In sum, Greiner says, it’s a potentially game-changing partnership. “We get our robot mad scientists together with the laser mad scientists…I believe its going to be transformational for the robot field,” she says.

If there was any doubt before today’s announcements, 2008 is shaping up to be an all-out year for Greiner’s firm. Just in front of Christmas, the defense and consumer robotics firm won its dramatic legal battles (covered extensively by Xconomy) against Robotic FX. Even before the courtroom cases were settled, the Army had revoked Robotic FX’s contract to deploy up to 3,000 robots in the Middle East and awarded a $286 million deal to iRobot. Then, last Thursday, the company announced that the Army had accelerated the schedule for deployment of what Wade referred to as the Packbot’s little brother, the SUGV (for Small Unmanned Ground Vehicle), a 30-pound, ruggedized, semi-autonomous, camera-wielding, robot more for ground troops. That was part of a separate, $51 million contract awarded under the Army’s Future Combat Systems program that could now see the SUGVs deployed as early as 2010.

But, given today’s announcement, it seems all that was just a table-setter, at least on the military-robot side of the business (iRobot’s consumer products include the Roomba robotic vacuum cleaner and other household robots). Laser range detectors have been employed in the robotics community for years, Greiner points out. “In fact, we’ve done it for many, many years,” she says. The problem is, the systems are not especially rugged or durable, they’re susceptible to glare from the sun, and have trouble cutting through dust or fog. In short, they don’t do as well as they should in the extreme conditions in which they must typically be deployed.

What ASC brings to the table is a new approach to the problem. As Greiner puts it, “These guys have invented a new type of LADAR system.” The Flash-based, solid-state system has no moving parts, one factor in improving its ruggedness. Instead of scanning the terrain one line at a time like traditional LADAR, ASC’s system illuminates an entire scene at once with diffuse laser light, providing a full, instantaneous 3D picture of the territory around it. The flash technology, Greiner says, can “visually freeze the entire geometry.”

This afternoon, iRobot plans to demonstrate a working prototype of the system. “They’re not on robots yet,” Greiner notes. But she says the technology is proven and that the company plans to demonstrate the system for the military later this year, with delivery of the first robots incorporating the technology targeted for 2009. She says she could see the new LADARs going not only on Packbots but larger vehicles like Humvees or even tanks. Outside the military, she envisions it enabling robot-driven tractors or other large industrial robots.

“I believe it’s an enabling technology,” she says.

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All the fuss over iRobot’s Packbot military robot over the past year, including the company’s successful patent-infringement and misappropriation-of-trade-secrets actions against Packbot-clone-maker Robotic FX, may have left you with the impression that the Packbot is iRobot’s key product for the defense community. In fact, the U.S. Army is just as excited, if not more enthused, about the Packbot’s little brother, called SUGV (for Small Unmanned Ground Vehicle).

As part of its Future Combat Systems program, the Army has a $51 million contract with iRobot to develop the robot, with field delivery originally expected around 2012. But SUGV testing has been going so well, according to various defense publications, that the Army has reportedly been considering accelerating the program, in the hope of getting the 30-pound, ruggedized, semi-autonomous, camera-wielding, backpackable robot into the field by 2010.

And now that’s official. IRobot announced yesterday that the Army has accelerated its testing schedule and wants the company to deliver 25 SUGV test units by April, with evaluation to begin the following month. Lighter, more agile, and more maneuverable than the Packbot, SUGV has proved popular among soldiers testing prototypes because it can venture into tight or dark spaces to search for explosives, among other talents.

IRobot said it expects the Army to decide on whether to authorize large-scale production of the SUGV by September.

“We continue to receive a tremendous amount of positive feedback from soldiers in theater that iRobot PackBot is an essential tool for ensuring mission readiness and improving situational awareness to keep soldiers out of harm’s way,” Joseph Dyer, president of iRobot’s government and industrial robots division and a retired U.S. Navy vice admiral, said in the company’s announcement. “We see this acceleration as clear evidence of the U.S. Army’s recognition of the critical role robots play in arming soldiers with the best intelligence and combat options to provide clear advantage on the battlefield.”

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This is the week that everybody in the media seems to be gazing back upon 2007, but here at Xconomy, well, we’re not that into the first half of the year. No offense intended to January, February, et al—we just weren’t around yet to cover all the people, companies, and happenings that surely made those first six months of the year a fascinating time in the New England innovation ecosystem. So, in honor of the hemi-anniversary of our June 27 launch (no need to send gifts, a few extra clicks will do), we present the Xconomy Half-Dozen-Stories-of-the-Half-Year Awards.

The “Who Knew?” Story of the Half Year:
Boston: The Hidden Hub of Music and Technology
Wade, a recent transplant from the West Coast with a healthy interest in the intersection of technology and entertainment, began to notice that the Boston-area music-tech scene is a lot more rocking than stereotype would lead you to expect. He spent weeks exploring a fascinating web of companies, all combining music, computing, and the Web, and unearthed a hidden technology cluster. The story was part of the inspiration for Xconomy’s upcoming Battle of the Tech Bands.
Runner Up:
VC Varsity (showcasing the little-known athletic prowess of the area’s private equity circuit)

Home-Team Victory of the Half Year:
iRobot v. Robotic FX
We did our journalistic best to be objective in our coverage of Burlington, MA-based iRobot’s patent-infringement and trade-secrets-violations cases against an Illinois rival and the firm’s founder (a former iRobot employee). But the whole massive shredding/tossing of evidence thing… Well, it makes an impression, doesn’t it? Evidently it did on judges in Massachusetts and Alabama, because they endorsed settlements that put Robotic FX out of business and locked founder Jameel Ahed out of the industry for the next five years.
Runner Up:
Red Sox v. Rockies

Story Tip of the Half Year:
Upheaval at MERL
Don’t want to reveal too much about how this one came in, except to say that in a town like this one, kids’ playdates are shockingly prone to becoming parental networking events.
Runners Up:
IRobot’s Dumpster Diving Detectives (the classic anonymous phone call)
The Inside Story of Eons Layoffs (the classic insider source)
Metcalfe Takes GreenFuel Reins (the semi-classic e-mail tip, but we would have had the story two days earlier if our spies at Lanes and Games had recognized the thin Bob Metcalfe look-alike they thought they were seeing as the real, and newly svelte, Metcalfe)

Comment Catfight of the Half Year:
Sermo Strikes Back
I guess when you write a story about how a bunch of people are really ticked off about something (in this case, about some bloggers exposing a security loophole for Sermo, a popular Cambridge-based social networking site for physicians) it shouldn’t be too surprising that the story itself elicits some debate. But man, those doctors can get ornery! (And by doctors, I’m including the bloggers, too. Because I’m Switzerland, okay everybody?)
Runner Up:
What’s Wrong With Energy Investing? (And what’s wrong with making the simple observation that investing in alternative energy is a necessary, but wholly insufficient way to deal with the energy problem?)

Anticlimax of the Half Year:
Carl Icahn Shakes Up Biogen Idec
The activist investor burst on the scene in August. Biogen was up for sale by October. Pundits and bloggers (ourselves included) speculated about who would buy the pioneering Cambridge biotech, but in December, with no offers on the table, Biogen took itself off the block. Of course, you know the story ain’t over…
Runner Up
Genzyme Buys Bioenvision (a once-fiery shareholder revolt fizzles at the 11th, make that 13th hour)

Google IPO Impersonation of the Half Year:
VMware
Hopkinton, MA’s EMC sold just 10 percent of its Palo Alto-based VMware subsidiary in this offering, but what an offering it was. The stock (NYSE: VMW) debuted at $50—a 72 percent premium over its offering price—and soared to a high of $125.25 within a few months (it’s now down to a mere $86 and change).
Runner Up:
Athenahealth (NASDAQ: ATHN) (The Watertown, MA-based, provider of online billing and other business services for medical practices priced at $18 and debuted at $30.)
Also Ran:
EqualLogic (NASDAQ: DELL) (The Nashua, NH-based maker of network storage ditched a planned IPO in favor of a $1.4 billion cash sale to Dell Computer—evidently the largest all-cash acquisition of a venture-backed company in history.)

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IRobot officially declared victory in its legal battles with Robotic FX this evening, as judges in Massachusetts and Alabama signed off on settlements (which we reported earlier in the day had been reached) that put Robotic FX out of business. At its discretion, the Burlington, MA-based firm can also absorb some of its former rival’s assets.

“The judgments validate our strong intellectual property position and the value of our IP,” said iRobot co-founder and chairman Helen Greiner in a statement issued this evening. “We are proud to deliver our reliable field-proven robots to aid our warfighters in their dangerous missions.”

It’s been a whirlwind last five months for Burlington, MA-based iRobot (NASDAQ:IRBT). In August, the company filed two lawsuits—one in U.S. District Court in Alabama and one ultimately moved to U.S. District Court in Massachusetts—alleging that the Negotiator robot built by Robotic FX was illegally derived from its own PackBot. Since the lawsuits were filed, the company has lost an Army contract potentially worth some $280 million to Robotic FX, won a preliminary injunction preventing its rival from delivering on the deal, and then, late last week, won back the contract, which calls for iRobot to deliver up to 3,000 bomb-detection robots to troops in the Middle East. The settlements finalized today put an emphatic exclamation point at the end of the story and clear iRobot’s decks of a major financial question mark as it heads into 2008.

IRobot said in today’s statement that it will cost some $2.9 million to litigate and settle the cases. Under the terms of the Alabama settlement, Alsip, IL-based Robotic FX acknowledged it infringed on two iRobot patents in making the Negotiator and is permanently enjoined from “making, using, selling, or offering to sell any goods that in any way infringe” on those patents. Some customers that previously bought Negotiators are allowed to continue using them.

Under the Massachusetts settlement, iRobot secured victory on its claims of misappropriation of trade secrets, breach of contract, and unfair competition. Its claim of computer fraud and abuse was dismissed. Furthermore, the settlement effectively enjoins Robotic FX founder Jameel Ahed from competing with iRobot—in either its consumer or military businesses—for five years.

Here’s a link to the Alabama settlement. And here’s the link to the settlement in Massachusetts.

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[Updated 2:45 pm---see end of story.] IRobot’s two lawsuits against Robotic FX are being settled in favor of the Burlington, MA-based plaintiff, according to filings in U.S. District Courts in Massachusetts and Alabama.

Settlements filed over the last couple of hours include judgment in favor of iRobot on all counts of the Alabama suit, and on three of four counts of the Massachusetts suit. At the time of this post, the Alabama settlement has been signed by a judge, while the Massachusetts settlement is awaiting finalization by the Court.

The Alabama settlement permanently enjoins Alsip, IL-based Robotic RX from “making, using, selling, or offering to sell any goods that in any way infringe” on two iRobot patents that the firm acknowledges it infringed in making its Negotiator robot. It further refers to an exhibit specifying certain customers of Robotic FX who are not enjoined from using the Negotiator itself—presumably this refers to customers who previously purchased units—but the exhibit itself has been impounded.

The Massachusetts settlement includes judgment in favor of iRobot on its claims of misappropriation of trade secrets, breach of contract, and unfair competition. The Burlington firm’s claim of computer fraud and abuse is dismissed in the settlement, however. That settlement enjoins Robotic FX founder Jameel Ahed for five years from “directly or indirectly, as an individual proprietor, partner, stockholder…, officer, employee, director, joint venturer, lender or in any other capacity whatsoever, engaging in the business of developing, producing, marketing or selling any robotic product of the kind or type developed, produced, marketed or sold by iRobot, and publicly disclosed (including, without limitation, robotic products for use in the military, homeland security, consumer house-hold and toy markets), as of the Effective Date of the Settlement Agreement.”

In the Alabama settlement, Robotic FX stipulates that it has infringed upon two iRobot patents by making its Negotiator robot, that it “knew of the existence and scope of at least one of” the patents, and that its “infringement has been willful and objectively reckless.”

In the Massachusetts settlement, Robotic FX and Ahed stipulate that they “misappropriated certain of iRobot’s proprietary and confidential information—including trade secrets including without limitation information related to the design and manufacture of robot tracks.” The settlement also says that “Robotic FX obtained a competitive advantage over iRobot in the market for private, state, municipal agency and federal government procurement of small urban ground vehicles and man-portable tactical mobile robots, including without limitation the xBot competition, by using the misappropriated iRobot proprietary and confidential information.” The filing goes on to detail Ahed’s destruction and attempted destruction of evidence, including his now-infamous dumpster disposal of iRobot tools for manufacturing robot tracks.

We’re watching carefully as the court updates its filings, and have calls and e-mails out to both companies and their attorneys. We’ll post the settlement documents shortly, and will bring you more news as we get it.

Update 2:45 pm:
We’re still waiting on word from the Massachusetts court, but we did get a quick clarification from iRobot attorney Michael Bunis, of the Boston office of Fish & Richardson, on the nature of the two settlements. Bunis explained that a typical settlement agreement is essentially a contract between the two parties, and that to address future violations of the agreement the offended party would have to file a new lawsuit, often in front of a new judge. What iRobot has gotten in Alabama, and will get in Massachusetts if and when the judge here finalizes the agreement, is what’s called a consent decree, Bunis says—a court order that places more stringent obligations on the parties to comply. With such a decree, the court retains jurisdiction and the judge can enforce the agreement directly by holding the parties in contempt for any violations. “Once you read the terms of the documents,” Bunis says, “you’ll see that it really accomplishes everything I think we set out to accomplish.”

So here are those documents:

Alabama Stipulated Consent Judgment (now finalized)
Massachusetts Stipulated Consent Judgment (yet to be signed)

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Evidently things got a little festive over at iRobot (NASDAQ: IRBT) late Friday evening, when the company learned that it had been awarded a contract worth up to $286 million to supply so-called “xBot” bomb-detection robots to the U.S. Army. “I think there might have been a beer or two,” said Joe Dyer, president of iRobot Government and Industrial Robots, in a telephone interview this morning. And indeed, said Dyer, the contract brings with it much for the company to celebrate. “It’s important strategically and tactically for the company,” he said. Not only does it give the company some much-appreciated near-term cash flow, he said, “but more important than that is it solidifies iRobot’s position of market leadership for both design and production of robots into the larger Army infantry market.”

IRobot is already hard at work on the xBot contract, Dyer indicated. The terms call for an initial order of 101 robots—although that total could go up to 3,000 over the next five years. He said the Burlington, MA-based company will deliver the first pair on January 8. “Then we deliver five in February, and then 30 in March, and then 30 in each month following,” he added, until the initial purchase order is filled (a final delivery of four robots rounds out the purchase, the company says). The company says it already has indications from the military that more will be ordered after that.

IRobot has been pursuing the contract at the same time it’s been waging a legal battle against Robotic FX, an Alsip, IL-based company founded by a former iRobot employee; in two separate lawsuits iRobot contends that Robotic FX’s Negotiator robot is a knockoff of iRobot’s Packbot. You can find our detailed coverage of the case here, and a separate breaking news story here about this morning’s announcement that iRobot had won the contract. But to briefly explain this latest development, Robotic FX had originally won the contract in September with its bid of $279.9 million; iRobot was the next-lowest bidder. While challenging Robotic FX in court, iRobot also filed a series of protests with the Army. Ultimately, the Army did not deem Robotic FX responsible to perform the work and, Dyer said, iRobot was next in line for the award. “The ground rules were that if the first bidder was for any reason found not responsible, in this case, to execute the contract, that it would go to the next-lowest bidder and the next lowest bidder’s bid,” he said.

The company has seen much drama on the path to this point. Dyer said that around iRobot, some people refer to the Robotic FX case as like a W.E.B. Griffin novel. “It had all the aspects,” he said. “It had theft of trade secrets. It had betrayal. It had cover up—cover up of the cover-up.” It even had the U.S. government injecting itself in a civil dispute between two companies (early on, the military and the U.S. Attorney’s Office both interceded on behalf of Robotic FX, claiming in part that American troops would be endangered by any delay in fulfilling the contract), he noted. Dyer paused slightly, then said: “I’ve met an awful lot of nice lawyers since this started.”

IRobot will continue to pursue its lawsuits against Robotic FX, according to iRobot spokesperson Nancy Dussault Smith. Meanwhile, Dyer stressed the importance of the contract not only to iRobot’s near-term cash flow but, more importantly, to the company’s long-term prospects in the military market. To date, Dyer explained, most of iRobot’s PackBot military robots have been sold to special EOD (explosive, ordnance, and disposal) forces. These are the bomb specialists that focus on the improvised explosive devices, or IEDs, that have proved so deadly to U.S. troops in Iraq and Afghanistan. But that’s a relatively small market, Dyer said. The new order is to deliver bomb-detection robots to the wider Army. “The infantry is a tremendous market, and represents adoption of robots across a broad tract,” he said.

Dyer also depicted the order as a critical step toward iRobot’s farther-reaching plans. In 2004, he said, the company won a $50-plus million R&D contract to do early design and development work on what are called SUGVs, or small unmanned ground vehicles, for the Army’s Future Combat Systems program. Of the SUGV, he said, “that’s a robot that’s faster, it’s lighter, it’s linked to the networks. It will be really the robot of the infantry’s future. But it’s not yet ready to be delivered to the field, so this contract represents a sustaining bridge between today and the delivery of the small unmanned ground vehicle.”

IRobot opened trading today at $19.30, up 12 percent from yesterday’s close of $17.19; but by late morning it was back down below $18.

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In a dramatic turnaround that is sure to send holiday cheer echoing through its halls, Burlington, MA-based iRobot (NASDAQ: IRBT) has won a multi-million-dollar contract to deliver bomb detection robots to U.S. troops; the contract was originally awarded to arch-rival Robotic FX barely two months ago. The company said in an announcement released this morning that its bid of $286 million has now replaced Robotic FX’s initially successful $279.9 million bid.

Today’s announcement—although not unexpected, as news came out over the weekend that Robotic FX’s contract had been canceled—still marks a huge step in iRobot’s struggles against its Illinois-based rival. The original contract—allowing the Army to order up to 3,000 bomb detection robots for troops in the Middle East over the next five years, and including spare parts, training, and repair services—was awarded on September 14, after Robotic FX beat out iRobot in the bidding process. The two companies had both met the military’s technical requirements. But already by that time, iRobot had brought legal action against its competitor, which is run by a former iRobot employee, Jameel Ahed. IRobot contends in two lawsuits filed in August—one in U.S. District Court in Alabama and one now in U.S. District Court in Massachusetts—that the Negotiator robot built by Robotic FX is a knock-off of its own PackBot.

On October 23, presumably at least partially in light of information from the lawsuits, including the revelation that Ahed had destroyed some evidence in the case, Army contracts officer Joanne Byrd revealed her decision to set aside Robotic FX’s contract. In a letter to the Army’s Legal Services Agency, she outlined a series of steps that might then ensue. In the end, if Robotic FX was not found to be a “responsible” government contractor, Byrd said she would “award a contract to the next lowest bidder, iRobot.”

And now, that’s what seems to have happened.

We’ll post soon with more details. In the meantime, here’s the full archive of our coverage of the case, which has all the drama of high-stakes industrial espionage, complete with dumpster diving private detectives and attempts to hide evidence from U.S. Marshals.

Of course, the case is not over. The two parties are due back in Massachusetts court in January, and of course we plan to stay on top of the action.

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Less than two months after setting aside a $279.9 million contract with Illinois-based Robotic FX for delivering bomb-detection robots to U.S. troops, the U.S. Army has canceled the agreement, the Boston Globe reports. The decision apparently paves the way for the contract, which was awarded to Robotic FX in September, to go to iRobot as the next-lowest qualified bidder.

Although it still is too early to proclaim an iRobot victory—we have not yet independently verified the Globe account and just yesterday an iRobot spokesperson said there was no new information available—this latest news seems to be a pivotal development in the Burlington, MA-based company’s struggle to win the “xBot” contract. The Army’s decision might also shed light on iRobot’s legal fight against its rival. (IRobot is contending in two lawsuits—one in U.S. District Court in Massachusetts and one in U.S. District Court in Alabama—that Robotic FX’s Negotiator robot is a knock-off of iRobot’s PackBot.)

On October 23, Army contracts officer Joanne Byrd revealed her decision to set aside the contract to Illinois-based Robotic FX in a letter to the Army’s Legal Services Agency. She said in the letter that she would conduct a new assessment of Robotic FX to determine whether it was a “responsible” government contractor.

If she did not deem Robotic FX responsible, Byrd wrote, she would next refer the matter to the Small Business Administration’s Government Contracting Area Office, which would need to determine whether to issue a Certificate of Competency affirming that Robotic FX is responsible to perform the contract. “If the SBA declines to issue a COC,” Byrd wrote, “then I will award a contract to the next lowest bidder, iRobot.”

You can read the full text of that letter here.

It’s not clear how far along the Army and SBA are in that whole process. “The Robotic FX contract is no longer in existence,” Byrd told the Globe, citing “peripheral complications” as the reason behind the decision. However, no other details were provided.

We tried to reach iRobot officials for an update, but so far have received no word back. In the meantime, you can find all our coverage of the case here.

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I don’t know if the cold medicine was getting to me or what, but venture capitalist Michael Greeley was sounding awfully like a socialist for a minute there last night at the Xconomy Forum.

Greeley—a general partner at IDG Ventures, president of the New England Venture Capital Association, and an Xconomist—was moderating a spirited discussion on the future of innovation in New England. He had lit a fire under the tushes assembled in the MIT Media Lab’s Bartos Theatre by offering prizes for the most provocative question and for the most lively question. (The latter is a bit of an inside joke; I’ll explain in a bit.)

Taking the prize for most provocative—a Roomba generously donated by iRobot 
co-founder and chairman Helen Greiner, who was one of the panelists joining Greeley on stage—was a question from Cambridge Innovation Center cofounder Tim Rowe directed at each of the speakers. Noting that Tito Jackson, Industry Director of Information Technology at the Massachusetts Office of Business Development, was in the audience, Rowe asked, roughly: If you were the governor of Massachusetts, what you would do to spark innovation and address the fact that there aren’t more billion-dollar companies being formed in Massachusetts? (The billion-dollar-company issue was a central focus of last night’s discussion.)

Here’s where Greeley went momentarily pink on us, suggesting that the state should offer free housing for all graduates of Harvard, MIT, and the like. “It’s a tragedy that we educate these people and they leave,” he added. Of course, Greeley also said that as governor he’d take the capital gains tax to 0 percent, which was much more in line with what I’d expect from a VC, if a bit of an expansion of gubernatorial power.

Media Lab Director Frank Moss, another of last night’s panelists (and another Xconomist), went in the opposite direction on this question, though to similarly provocative effect. “I don’t think that the opportunities we have in front of us are going to be much influenced by government policy,” Moss said. What Moss advocated instead was, among other things, for the venture community to forge a new relationship with academia, getting involved with budding inventors and entrepreneurs by supporting them in some fashion while they are still students. With government and industry funding for basic research falling, Moss said, … Next Page »

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Never let it be said that Xconomy doesn’t look out for its readers. Yesterday you asked us to look into an intriguing posting on a government website about what looked to be a new $200 million contract for iRobot—marked with a date suspiciously close to when the Army set aside the $279.9 million “xBot” contract that had been awarded to rival Robotic FX in September. Today, we have the skinny.

A spokesperson for Burlington, MA-based iRobot (NASDAQ: IRBT), Nancy Dussault Smith, says that the new contract is totally unrelated to the xBot contract, and to the ongoing legal battle between iRobot and Robotic FX. (For the latest on that case, check out this and this.) What’s more, Smith was quick to point out, the new $200 million contract has not been issued yet.

Indeed, what the government posted is actually a noticed of its intent to issue a contract worth up to $200 million for spare parts, repair services, training, replacement systems, and so forth relating to iRobot technology that’s already being used in Iraq and Afghanistan. But that contract will not be issued until an existing contract hits its ceiling of roughly $64 million, Smith says. Some $19 million is left on that contract, which was originally awarded in June, 2006.

IRobot opened up 5.4 percent today, at $15.52, perhaps on chatter about the new contract.

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The chances of a Pilgrims-and-Indians-style Thanksgiving detente between iRobot and Robotic FX, if they ever existed, are looking pretty slim today.

The latest point of contention is a request from Robotic FX that Judge Nancy Gertner of U.S. District Court in Boston change her November 2 injunction against Robotic FX. The injunction effectively prevents the Illinois firm from delivering on a $279.9 million contract to supply its “Negotiator” robots to the U.S. military, at least in their present form, because, Judge Gertner found, the devices’ design likely violates iRobot trade secrets.

But in a motion dated November 19 (Monday), Robotic FX argues that the injunction (parts of which are sealed) is not specific enough because it “reaches far beyond” the trade secrets identified in Judge Gertner’s accompanying memorandum (itself partially sealed), and because “it refers to testimony at the hearing to define iRobot’s trade secret.” (Robotic FX has long argued that iRobot has failed to identify with enough specificity the trade secrets it alleges Robotic FX violated, so at least on its face this seems to be a variation on that theme.)

In Monday’s motion, Robotic FX attorney Patricia Kane Schmidt of Bell, Boyd & Lloyd in Chicago refers to her proposed amended version of the injunction (you guessed it, sealed again), which she says addresses the specificity issues, as well as a proposed amended version of the redacted version of the order (rhymes with “reeled”). Kane’s beef with the current redacted order is that it “provides insufficient information regarding the trade secret it enjoins,” and so “Robotic FX respectfully requests that the Redacted Order be amended to provide additional information to the public without disclosing the underlying trade secret.” I can’t quite wrap my head around the difference between providing information about the trade secret and disclosing the trade secret, but I’m always fond of more information.

IRobot, it would seem, may be less fond of the idea. In a separate filing, dated yesterday (November 20), Schmidt writes that Robotic FX’s counsel conferred twice with iRobot’s counsel—once last Thursday and once yesterday—to discuss Robotic FX’s latest motion. Both times they evidently failed to reach any agreement, although Schmidt doesn’t specify the point or points of contention.

Our calls and e-mails to attorneys for both sides were not immediately returned.

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There was another small flurry of filings late last week in Alabama and Massachusetts courts, where Burlington, MA’s iRobot (NASDAQ: IRBT) is bringing two different suits against Illinois-based Robotic FX. Most were focused on procedural matters, but a more substantive one was made on Thursday in U.S. District Court in Alabama. It’s a brief filed by Robotic FX attorneys to oppose iRobot’s recent motion for sanctions against the firm for founder Jameel Ahed’s destruction of evidence relating to the case. In it, Robotic FX tries to strike a balance between acknowledging that Ahed’s bad behavior could merit sanctions and arguing that his actions aren’t bad enough to warrant a default judgment against Robotic FX before the case even goes to trial.

“Robotic FX does not dispute that information potentially relevant to the present action may have been destroyed,” writes Robotic FX attorney Luther M. Dorr, Jr. of Maynard, Cooper & Gale in Birmingham, AL. Moreover, he says, “Robotic FX acknowledges that Mr. Ahed’s actions were improper and concedes that reasonable sanctions may be appropriate under the circumstances.” But citing, among other things, the 29-year-old Ahed’s youth and the pressures he was under while scrambling to win a $279.9 million government contract and facing the iRobot lawsuits, Dorr writes that “extreme sanctions” are not warranted. In particular, he argues that Robotic FX does not deserve “the ultimate sanction,” a default ruling in the case for iRobot.

Like a trade secrets and confidential information case in Massachusetts (where trial is slated to begin by next April 7), iRobot’s Alabama case—a patent infringement suit—alleges, essentially, that Robotic FX’s Negotiator robot is a knock-off of iRobot’s PackBot. On November 5, iRobot attorneys filed a motion in the Alabama case seeking sanctions against its rival based on Ahed’s destruction of evidence after the lawsuits were filed—much of which Ahed and Robotic FX have admitted. Such sanctions, iRobot wrote, could run from financial penalties to a default judgment against Robotic FX.

That default judgment is what Robotic FX now seems most focused on avoiding. Dorr devotes a large portion of his brief to a 1987 case in Florida, Telectron Inc. v. Overhead Door Corp., that iRobot cited in its request for sanctions as involving destruction of evidence that was “highly analogous” to Ahed’s actions in this case. Dorr outlines what he argues are several key differences between the iRobot case and the Florida case, in which both monetary sanctions and a default judgment were issued against Overhead Door.

We haven’t studied the particulars, and can’t bear the thought of diving into another case. But according to Dorr’s brief, the Florida case involved systematic destruction of corporate sales and pricing records and correspondence over the course of almost two years, where the “primary wrongdoer” was an in-house attorney. By contrast, Dorr argues, “Jameel Ahed is a 29 year-old engineer with no legal training and no substantive litigation experience prior to the present action,” and his “destruction of materials took place over a period of approximately 48 hours.”

What’s more, the records destroyed in Telectron were central to the legal action. IRobot, Dorr argues, has other means available to it to prove its case, including a copy of Robotic FX’s Negotiator robot purchased in December 2006 and records that were seized from the Illinois company.

Dorr also counters one of the central contentions in iRobot’s motion for sanctions—that Ahed violated the Alabama court’s temporary restraining order and destroyed evidence after the TRO was issued and served. By way of background, both sides seem to agree that most (if not all) of Ahed’s known destruction of evidence occurred over the weekend of August 18: the 18th was the day iRobot detectives observed Ahed throwing dozens of items into a dumpster. The TRO was not issued until Monday, August 20, and was served the next day.

Ahed ultimately admitted that, in addition to throwing out most of the items the detectives found in the dumpster (he suggests at least one item was planted), he had also shredded some 100 data CDs and erased several computer hard drives by the time U.S. Marshals arrived on August 21 to serve the TRO and conduct several searches. After first searching Robotic FX’s offices and Ahed’s parents’ home, they moved to the Chicago apartment of Kimberly Hill, Ahed’s girlfriend and Robotic FX’s Chief Operating Officer. In requesting sanctions against Robotic FX, iRobot has focused on a laptop—one of the computers whose hard drive Ahed erased—that Ahed hid under a bed when he reached Hill’s apartment ahead of the marshals. According to a report from the forensics examiner who found the laptop, the computer was warm when he found it, and the completion message from the disk-scrubbing program was displayed on the screen when he lifted the lid.

Dorr concedes that Ahed hid the laptop. But he says iRobot has not shown than the TRO was violated. “There is no evidence that any information on the laptop was destroyed after the entry of the Court’s TRO,” he writes. Robotic FX, he adds, “respectfully submits that iRobot has not demonstrated that Robotic FX has violated this Court’s TRO and sanctions should not be imposed or enhanced on that basis alone.”

Dorr concludes: “An entry of default in this action is an extreme penalty that should not be imposed where other sanctions could properly redress the wrongdoing. Indeed, iRobot’s ability to proceed with its claim of patent infringement against Robotic FX has not been prejudiced by Mr. Ahed’s actions. This Court should fashion a lesser remedy and allow this action to proceed to resolution on the merits.”

A hearing on iRobot’s motion for sanctions is set for Friday, December 7, before U.S. District Judge U. W. Clemon. (Clemon is the judge who issued the TRO in the first place, though not the judge assigned to hear the patent-infringement suit.)

You can read Robotic FX’s entire brief here.

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Having won a partial injunction against Robotic FX in a Massachusetts court, attorneys for iRobot last week turned their attention to the firm’s separate Alabama lawsuit against its rival. In a motion filed on Wednesday, iRobot asked that Robotic FX be held in contempt and sanctioned for founder Jameel Ahed’s destruction of evidence after the Alabama court had issued a temporary restraining order prohibiting Robotic FX “from failing to preserve all evidence, information, data and documents” concerning the patents, technology, and allegations at issue in the case. Such sanctions, iRobot attorneys said, could run from financial penalties to a summary judgment against Robotic FX.

Like the case in Massachusetts (a full trial of which is slated to begin no later than April 7, 2008), iRobot’s case against Robotic FX in Alabama charges, essentially, that Robotic FX’s Negotiator robot is a knock-off of iRobot’s PackBot. But where the Massachusetts case focuses on trade secrets and confidential information that iRobot says Ahed obtained while working at the Burlington, MA-based firm and used in building the Negotiator, the Alabama case focuses on two iRobot patents the company says the Negotiator infringes upon.

IRobot sought and won the temporary restraining order on August 20 after detectives it had hired observed Ahed taking a large duffle bag from Robotic FX’s headquarters on the night of August 17 (the day the lawsuits were filed) and tossing dozens of items from the bag into a dumpster on August 18. On the 21st, U.S. Marshals, accompanied by iRobot attorneys and forensic specialists, served Robotic FX with the restraining order and searched the company headquarters, Ahed’s home, and the home of Kimberly Hill, Ahed’s girlfriend and Robotic FX’s Chief Operating Officer. Ahed would ultimately admit that, in addition to leaving some of the items detectives found in the dumpster (he suggests at least one item might have been planted), he had also shredded some 100 data CDs and erased a number of hard drives from Robotic FX and personal computers by the time the Marshals arrived. But last week’s request for sanctions focuses on a laptop that Ahed hid under a bed—with a disk-wiping program still running—when he and Hill reached her apartment (the last of the three sites searched) ahead of the marshals.

iRobot’s argument for sanctions, in a nutshell (from a brief supporting the motion): “Mr. Ahed, after being served with this Court’s TRO, therefore, attempted to continue his course of action by hiding his destruction of evidence—an action which would have itself effectively destroyed the evidence of his spoliation conduct. The TRO was entered to maintain and preserve evidence. Mr. Ahed’s efforts to conceal his destruction of evidence violated both the spirit and terms of the TRO.”

In the brief, iRobot attorneys request that the judge award monetary sanctions “for at least the costs and fees incurred to perform the significant legal and investigative costs that iRobot was compelled to undertake as a consequence of Robotic FX’s willful destruction of evidence.” What’s more, they add: “Mr. Ahed’s course of conduct warrants imposition of additional sanctions including at a minimum imposition of adverse inferences regarding iRobot’s claims and even extending to an issuance of a default judgment against Robotic FX.”

In other words, they are saying that the judge could declare an iRobot victory because of Ahed’s actions. But … Next Page »

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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.

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UPDATED (Nov. 2, 2007, 8:45 pm): In a federal district court ruling issued tonight, Burlington, MA-based iRobot has won a limited victory over Robotic FX, the Illinois-based maker of the Negotiator bomb-detection robot. The company secured a partial injunction that an iRobot attorney says effectively prevents Robotic FX from delivering on a $279.9 million contract to build Negotiators for the U.S. Defense Department, at least in their present form.

Saying that her ruling “is unlikely to satisfy either party,” Judge Nancy Gertner of U.S. District Court in Boston found that some contested aspects of the Negotiator’s design likely violated iRobot trade secrets, but that others did not. To decide the matter conclusively, and expeditiously, she said that a full trial must begin no later than April 7, 2008.

In order to avoid disclosure of trade secrets, Gertner sealed some specifics of her ruling. She did say, however, that her finding hinged on the Negotiator’s tracks. In four days of hearings on the proposed injunction in late September and early October, Robotic FX founder Jameel Ahed testified that he had developed the entire Negotiator, including its tracks, independently. But in making her ruling, Gertner said that Ahed’s admission that he had destroyed evidence in the case “profoundly undermines” his credibility.

IRobot attorney Michael Bunis, of the Boston office of Fish & Richardson, generally praised Gertner’s ruling, despite her feeling neither side would like it. “She found 100 percent that the materials used and the process behind the development of the track were trade secrets, and she absolutely did not credit the defendant’s testimony that he independently developed the tracks,” says Bunis.

“I think we would be happier if she granted the injunction with respect to all of the evidence we put on of trade secrets, and we still think that all of the things were trade secrets,” he says. But, he adds, “given the scope of the injunction we’re pleased, because it effectively stops them from selling the product.”

Robotic FX attorney Patricia Kane Schmidt of Bell, Boyd & Lloyd in Chicago, said she was still digesting the ruling and declined to comment for the time being.

Overall, Gertner found in her 30-page public ruling that iRobot was likely enough to prevail in a full trial over the trade-secret allegations that the company was entitled to an injunction. Otherwise, she said, iRobot would suffer “irreparable harm” and Robotic FX would have a “substantial first-mover advantage” over iRobot in competition for future robotics contracts. “Allowing the Negotiator to be sold would cause the plaintiff to irrevocably lose market share to which it is entitled,” Gertner wrote.

In her ruling, Gertner said that the Negotiator’s tank-like tracks seemed to have been based on technology that Robotic FX founder and CEO Jameel Ahed illegally appropriated from the design of iRobot’s own Packbot robot when he was an employee there prior to June 2002. She enjoined Robotic FX from selling any product that embodies those secrets—meaning, in effect, that the company cannot deliver the Negotiator to the Army, or sell it anywhere else, in its current form.

Gertner found that other aspects of the Negotiator’s design likely did not infringe on iRobot’s trade secrets. Though the specifics of this part of the ruling were also sealed, Bunis said that they involved the robot’s mechanical features.

Judge Gertner had damning words for Ahed, who admitted that he had destroyed or discarded physical evidence and electronic data relating to the case. “His spoilation [sic] of evidence, along with other acts in which Ahed engaged just before he left iRobot, gives rise to a strong inference of consciousness of guilt,” Gertner wrote.

And in the end, Ahed’s credibility was at the crux of the ruling. “Where Ahed’s testimony was critical…the court finds him not to be a credible witness, and accordingly finds that the plaintiff has demonstrated a reasonable likelihood of success on the merits,” Gertner wrote.

Gertner said the precise terms of her injunction would be contained in a separate, sealed order. She told both parties to submit a proposed schedule for discovery in a full trial by November 15. She scheduled a pre-trial conference for March 26, 2008, and said that a full trial must begin no later than April 7, 2008.

To read the complete, 30-page ruling, click here.

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First, a warning. If you are looking for closure—an answer to the question of whether iRobot will get its requested preliminary injunction against Robotic FX—you’re out of luck. Although witness testimony ended on October 3, and ostensibly the filing period for further arguments was over the following week (or so), Judge Nancy Gertner of U.S. District Court in Boston has not yet ruled on the injunction question. So, read on at your peril.

What has happened today is that another filing has been entered into the court record, extending the now long-drawn-out battle over the injunction. This time the filing comes from Robotic FX, and (get ready) it’s a letter to the court in response to a letter to the court from iRobot back on October 10, which was written in response to a request from the court back on October 3 (the day testimony closed). The letter largely covers old ground, but it held a nugget of new information, for us, at least—Robotic FX’s argument that some of the material iRobot is claiming as confidential information or a trade secret is publicly disclosed in iRobot’s own patents.

If you’ve read this far, you know the basic story: iRobot is suing Robotic FX, alleging, essentially, that Robotic FX’s Negotiator robot is a knock-off of its PackBot (full backgrounder here). While waiting for its lawsuits to play out, iRobot wants a preliminary injunction against Robotic FX to stop it from producing the Negotiator.

The gist of today’s letter, to Gertner from Robotic FX attorney Patricia Kane Schmidt, of Bell, Boyd & Lloyd in Chicago, is that the injunction iRobot seeks is far too broad. Basically, Schmidt argues that if an injunction were to be granted, it should only apply to aspects of the Negotiator that are based on “iRobot’s protectable trade secrets and confidential information.” IRobot, she argues, essentially wants to enjoin “the entire Negotiator product.” What’s more, says Schmidt, “iRobot has failed to identify any protectable trade secrets or confidential information.”

That last argument is not new. IRobot has previously responded that it has laid out clear evidence of misappropriation of trade secrets—and that in any case, at the preliminary injunction stage it is only “required to present enough facts to show a likelihood of success” on the merits of its claims.

In short, the basic point has already been made and countered—several times. What’s new to us is Robotic FX’s discussion of specific features of the PackBot that iRobot alleges were copied in the Negotiator. These include the chassis design, the track, and a group of five other features found in one prototype version of the PackBot.

Schmidt’s letter argues that none of these features involves trade secrets or confidential information. She contends that the elastomer material used in the PackBot’s tracks and the method of manufacturing it are publicly known. She says that three of the five prototype PackBot features in question “are merely applications of common engineering knowledge.” The other two, as well as the chassis design, are not trade secrets but “publicly disclosed in iRobot’s patents,” according to the letter.

We were a bit confused about that last argument, which at first blush seemed to be saying, “this might be patent infringement, but it’s not misappropriation of confidential information or trade secrets.” However, we were able to get through to Schmidt, who made it clear that Robotic FX is not admitting any kind of patent infringement. Rather, she explained that if information is disclosed within a patent filing—but isn’t itself the subject of the patent—then that information becomes publicly available and cannot be claimed as a trade secret or confidential information. She says that in the letter she was “merely illustrating for the court that iRobot disclosed certain of its alleged trade secrets in issued patents.”

Schmidt’s letter concludes by arguing that “iRobot’s proposed preliminary injunction is improper,” and that it should be denied. You can read her entire letter here.

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In the latest episode of the iRobot-Robotic FX drama, the Government Accountability Office has dismissed iRobot’s protest of the $279.9 million military contract awarded last month to its rival. The GAO says the protest no longer applies in light of the Army’s decision earlier this week to set aside the contract as it reassesses Robotic FX’s suitability to perform the work.

The most recent news came in a filing by the U.S. Attorney’s office that was posted online after hours yesterday (we love these after-hours filings, especially on Fridays, because we don’t have social lives here at Xconomy). “We will not consider a protest where the issue presented has no practical consequences with regard to an existing federal government procurement, and thus is of purely academic interest,” read the GAO’s short decision.

U.S. Attorney Anita Johnson filed the GAO’s decision along with related documents in U.S. District Court in Boston, where iRobot, of Burlington, MA, is seeking a preliminary injunction to prevent Robotic FX from manufacturing its Negotiator robot, which iRobot contends is a knock-off of its own PackBot. Both the Negotiator and the PackBot qualified in the Army competition to produce bomb detection robots, but Robotic FX underbid iRobot.

We have a lot of background here. And the most recent previous developments, including the Army’s decision to set aside the Robotic FX contract, are covered here.

You might ask whether iRobot really cares about the preliminary injunction now, with the Robotic FX contract set aside. But rest assured, it does. Sources close to the investigation tell us that there are two major issues here. One is that the Army reassessment could still find for Robotic FX, and the contract could be reinstated. The other is that the only thing set aside is the military contract. IRobot, which among other things alleges trade secret misappropriation by Robotic FX and its founder, Jameel Ahed, wants to stop Robotic FX from producing Negotiator robots for any purpose.

A ruling by U.S. District Court Judge Nancy Gertner on the preliminary injunction issue is considered imminent. We’ll stay on it, and hope that the next move is announced during working hours.

In the meantime, you can read the U.S. Attorney’s latest filing here—and the GAO’s decision here.

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Shares of Burlingon, MA-based iRobot (NASDAQ: IRBT) jumped out of the gate today, seemingly buoyed by yesterday’s after-trading news that the U.S. Army had set aside the $279.9 million contract of its rival, Robotic FX, and might award the contract to iRobot. After closing yesterday at $15.46, shares hit a high this morning of $18.50 and were trading at $17.95, up over 16 percent in mid-morning trading.

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