Ocado Innovation, Ltd. v. AutoStore AS

• Decision Date: 13 August 2021
• Docket Number: Civil No. 21-cv-41-JL
• Citation: 561 F.Supp.3d 36
• Parties: OCADO INNOVATION, LTD., et al., v. AUTOSTORE AS, et al.
• Court: U.S. District Court — District of New Hampshire

561 F.Supp.3d 36

OCADO INNOVATION, LTD., et al.,

v.AUTOSTORE AS, et al.

Civil No. 21-cv-41-JL

United States District Court, D. New Hampshire.

Signed August 13, 2021

Alexander N. Gross, Dustin Guzior, Garrard Russ Beeney, Helen Andrews, Laurie Stempler, Marc De Leeuw, Mark Charles Bennett, Morgan Schusterman, Stephen J. Elliott, Sullivan & Cromwell LLP, New York, NY, Laura Kabler Oswell, Sullivan & Cromwell LLP, Palo Alto, CA, Henry Clay Quillen, Whatley Kallas LLP, Portsmouth, NH, for Ocado Innovation Ltd., Ocado Solutions Ltd.

Robert R. Lucic, Bryanna Kleber Devonshire, Sheehan Phinney Bass & Green PA, Manchester, NH, Ali-Reza Boloori, Joshua Popik Glucoft, Kirkland & Ellis LLP, Los Angeles, CA, Emily Scott, Gregg Locascio, Kirkland & Ellis LLP, Washington, DC, Joseph Loy, Nathaniel Louis DeLucia, Kirkland & Ellis LLP, New York, NY, for AutoStore AS, AutoStore System Inc.

MEMORANDUM ORDER

Joseph N. Laplante, United States District Judge

As one of many offensives in a multi-front legal battle between commercial competitors, Defendants AutoStore AS and AutoStore System, Inc. (collectively, "AutoStore") have moved to dismiss parts of Plaintiffs Ocado Innovation Ltd. and Ocado Solutions Ltd.’s (collectively, "Ocado") patent infringement lawsuit. The motion turns on whether one of Ocado's patents-in-suit claims patent-eligible subject matter and whether Ocado has plead sufficient underlying facts to support claims of direct, induced, and willful infringement.

This court has subject-matter jurisdiction under 28 U.S.C. §§ 1331 (federal question) and 1338(a) (patents). After careful consideration of the parties’ submissions and thoughtful presentations at oral argument, the court denies the motion. Read as a whole and in light of the detailed specification, the court is not convinced that the claims in Ocado's ’404 Patent are directed to a patent-ineligible, abstract idea. Yet even if they were, there is a genuine factual dispute as to whether the claimed combination of elements in the patent is routine or conventional and thus lacks an inventive concept. The court therefore rejects AutoStore's pleadings-stage invalidity challenge. As for AutoStore's other dismissal arguments, while Ocado's allegations of direct pre-suit knowledge of the patents-in-suit are wanting, it has plead other circumstantial proof of knowledge that is sufficient to support both induced and willful infringement claims. Ocado has also plead conduct by AutoStore that, if accepted as true and viewed in Ocado's favor, is sufficient to satisfy the other elements of providing direct, willful, and induced infringement claims.

I. Applicable legal standard

To defeat a Rule 12(b)(6) motion to dismiss, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015).¹ This standard "demands that a party do more than suggest in conclusory terms the existence of questions of fact about the elements of a claim." A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 81 (1st Cir. 2013). In ruling on such a motion, the court accepts as true all well-pleaded facts set forth in the complaint and draws all reasonable inferences in the Plaintiff's favor. See Martino v. Forward Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010). The court may also consider judicially noticed documents, matters of public record, and documents introduced by the plaintiff in its objection to the motion to dismiss or concessions in that objection, without converting the 12(b)(6) motion into a motion for summary judgment. See Breiding v. Eversource Energy, 939 F.3d 47, 49 (1st Cir. 2019) ; Greene v. Rhode Island, 398 F.3d 45, 49 (1st Cir. 2005).

II. Background

The court recites the relevant factual background from Ocado's Second Amended Complaint (doc. no. 35) and materials referenced and incorporated therein.

Plaintiff Ocado Solutions Ltd. is a United Kingdom entity and wholly owned subsidiary of Ocado Group plc.² Ocado Solutions conducts Ocado's global business, including selling the "Ocado Smart Platform" technology to merchants.³ Plaintiff Ocado Innovation Ltd. is also a United Kingdom entity and wholly owned subsidiary of Ocado Group plc.⁴ Ocado Innovation is the assignee of the Asserted Patents in this lawsuit and has exclusively licensed those patents to Ocado Solutions.⁵

Ocado has developed a "cubic automated storage and retrieval system" called "the Hive" that forms a part of the Ocado Smart Platform or "OSP."⁶ Ocado touts the OSP and Hive as an "end-to-end solution for grocery order placement, fulfillment, and delivery."⁷ In connection with Ocado's development of the OSP, Ocado applied for, and the United States Patent and Trademark Office issued, the four Asserted Patents here. Those Asserted Patents are U.S. Patent Nos. 9,796,080 (’080 Patent), 10,901,404 (’404 Patent), 10,913,602 (’602 Patent), and 10,961,051 (’051 Patent).

The ’602 Patent, issued on February 9, 2021 and titled "Apparatus for Retrieving Units from a Storage System," describes an apparatus for lifting and moving containers within the storage system.⁸ The storage system is comprised of parallel rails or tracks forming a grid pattern, a plurality of stacks of containers located beneath the rails or tracks, and a "multiplicity" of load handling devices.⁹ Each load handling device includes a wheel assembly, a container-receiving space, a lifting device, and an external housing.¹⁰

The ’051 Patent, issued on March 30, 2021 and titled "Apparatus for Retrieving Units from a Storage System," is related to the ’602 Patent and describes a more compact load handling device, or robot, that can be used with traditional cantilever robots or pre-existing cubic automated storage and retrieval systems.¹¹ The patent describes the apparatus as two load handling devices, one of which includes a crane device comprised of a cantilever arm and a gripper plate.¹²

The ’404 Patent, issued on January 26, 2021 and titled "Methods, Systems and Apparatus for Controlling Movements of Transporting Devices" describes a system and method for controlling the movement of the devices – what Ocado refers to as robots – on the storage grid.¹³ The system contains several modules, or "units," including a "movement optimisation¹⁴ unit," a "reservation unit," and a "clearance unit." Independent Claim 1 of the ’404 Patent teaches:

1. A system for controlling movement of transporting devices arranged to transport containers, the containers being stored in stacks arranged in a facility, the facility having pathways arranged in a grid-like structure above the stacks, the transporting devices being configured to operate on the grid-like structure, the system comprising:

a movement optimisation unit configured to determine a route of a transporting device from one location on a grid-like structure to another location on the grid-like structure for each transporting device;

a reservation unit configured to reserve a path on the grid-like structure for each transporting device based on the determined route, wherein the path reserved for each transporting device is provided such that no two transporting devices have locations on the grid-like structure which would cause transporting devices to overlap at a same time; and

a clearance unit configured to provide a clearance instruction for each transporting device to traverse a portion of the reserved path,

wherein the clearance instruction is provided for execution by a control unit on each transporting device at a future start time.¹⁵

Claims 6 and 9 of the ’404 Patent – which "depend from" and therefore include all of the elements of Claim 1 – describe the system according to Claim 1, but add a configuration for the clearance unit to "grant or withhold providing clearance for a transporting device to traverse a portion of the reserved path in response to a status report received from each transporting device" (Claim 6) and add configurations for the clearance unit and movement optimisation unit "to dynamically re-plan a route of at least one transporting device" (Claim 9).¹⁶

The ’080 Patent, issued on October 24, 2017 and titled "Systems and Methods for Order Processing" discloses systems and methods that optimize the picking, storing, and delivering of customer orders.¹⁷ Specifically, the ’080 Patent "claims a system and method for storing delivery bins within" the cubic automated storage and retrieval system storage grid using existing "infrastructure to store customer deliveries in nested bin-container combinations and empty bin-container combinations" without the need for a separate order handling and sortation system.¹⁸

Exemplary Claim 23 of the ’080 Patent provides:

A system for managing storage and retrieval of containers, comprising:

a storage and retrieval system including:

a structural framework defining a grid of storage locations for receiving a plurality of containers;

a plurality of robotic load handlers each configured to access any one of the storage locations in the grid of the structural framework; and

a controller configured to control at least one robotic handler in transporting at least one of the plurality of containers to/from any one of the storage locations in the grid, wherein the plurality of containers includes storage containers configured to store products to be ordered, delivery containers configured to store products at least partially fulfilling an order, and combined containers including at least one delivery container nested within a storage container.¹⁹

Thus, in high-level terms, and without adopting any construction of the claims of the patents-in-suit, the Asserted Patents work together as follows. The Hive is essentially an automated warehouse consisting of cubic grids that store product (the ’602 and ’051 Patents ), automated transporting devices (referred to as "robots") that traverse the grids, retrieve product from storage bins, and deliver product...