iRobot Prevails in Robotic FX Lawsuits, Jameel Ahed is Robo-Toast, But the Whole Mess Costs $2.9 Million

Robotic FX is history.

iRobot has finally prevailed in its lawsuits against Robotic FX, with federal judges in both Alabama and Massachusetts finding that Robotic FX violated iRobot patents and misappropriated trade secrets, respectively. Robotic FX is shutting down, iRobot is acquiring its remaining assets, and Jameel Ahed has to take a 5-year timeout from competing against iRobot. Of course, the whole mess cost iRobot some $2.9 million in legal costs (Robotic FX CEO Jameel Ahed, we presume, is fairly well off given his taste for DeLoreans but we doubt he has tens of millions lying around.) Although it just might be possible that some of the technology developed by Ahed could improve iRobot's products. Ahed is an engineering genius, after all, just a sneaky one. iRobot did not say whether the $2.9 million would impact fourth quarter earnings guidance, but regardless, I see this as a significant net positive because it relatively permanently ends a competitive threat, and we can all now move on to trying to gauge Roomba and Scooba sales!

Here is the press release:
iRobot Prevails in Lawsuits Against Robotic FX
Friday December 21, 6:19 pm ET
Company Settles All Disputes with Former Employee
BURLINGTON, Mass.--(BUSINESS WIRE)--iRobot Corp. (Nasdaq:IRBT - News) today announced that federal courts in Massachusetts and Alabama have entered judgments in favor of iRobot and all disputes with former employee Jameel Ahed and his company, Robotic FX, Inc., have been settled. In August, iRobot filed two lawsuits against Ahed and Robotic FX: the Alabama action was for patent infringement, and the Massachusetts action was for trade secret misappropriation.
In the patent infringement suit against Robotic FX for its Negotiator robot, the U.S. District Court for the District of Northern Alabama entered a judgment that Robotic FX knowingly infringed on both asserted patents. Similarly, the U.S. District Court for the District of Massachusetts ruled that Ahed and Robotic FX misappropriated iRobot’s proprietary and confidential information, violated fair trade practices and destroyed evidence. The Massachusetts court also made permanent an injunction that had been preliminarily ordered last month against the sale of products using certain iRobot trade secrets, including the Robotic FX Negotiator product.
“The judgments validate our strong intellectual property position and the value of our IP,” said Helen Greiner, chairman of iRobot. “We are proud to deliver our reliable field-proven robots to aid our warfighters in their dangerous missions.”
In a related settlement, Robotic FX will be dissolved and certain residual assets retained by iRobot at iRobot’s election. Ahed is prohibited from participating in competitive activities in the robotics industry for five years.
iRobot’s cumulative litigation and settlement-related expenditures associated with this dispute are expected to total approximately $2.9 million.