Monday, November 05, 2007

iRobot Wins Injunction Against Robotic FX!!!

UDPATED 11/5: iRobot has issued a press release on the injunction.
“We are pleased with the court’s decision,” said Colin Angle, chief executive officer of iRobot. “We stand ready to deliver our field-proven iRobot PackBots to aid our warfighters in their dangerous missions.”
Original Post from 11/2:
iRobot Corp. has won a slam-dunk injunction against Robotic FX from Judge Nancy Gertner, who issued a 30-page ruling that harshly criticized Robotic FX CEO Jameel Ahed's destruction of evidence in the case and ruled that iRobot was likely to succeed in its case based on the apparent misappropriations of trade secrets regarding iRobot's tank-track design on the PackBot.

Xconomy has the story. Here is the 30-page decision. It's a tour-de-force.

An iRobot lawyer is quoted saying that this will prevent Robotic FX from delivering on the 4,000 robot, $280 million Army contract that was recently set aside pending a reevaluation of whether Robotic FX is a responsible contractor. While Robotic FX would seem likely to appeal, I can't imagine an appellate court judge overturning this injunction and aiding someone who destroyed mounds of evidence.

This is HUGE for iRobot!!!

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Anonymous said...

Ahhh... So, any predictions on how this will move the stock? It's up nearly 4% in after hours trading....

Dillo said...

Awesome news. This should kick things back up where they belong on Monday. Monday will be a spike upwards, but I think the real breakout will be on the disposition of the contract itself.

Dave Furtado said...

Justice has prevailed, I see no reason why the Army will continue the contract with FX, and now grant the contract to IRBT.

I see no reason for a 10-12% appreciation in the Stock Price on Monday.

A big shout out to THORN and SIMPSON for all their hard work in keeping us informed.

I might sell 20 or so shares of all the stock I have been accumulated in the last couple of weeks and buy myself a roomba 560 and looj.

Where is my best deal for these products now, thorn? your buyers guide?

thorn_stevens said...

I think we're getting ready for a great run over the next 10 weeks. Think about it -- A bump up on Monday on the injunction ($20s, anyone?), the almost certain awarding of the contract to iRobot to follow with upward revised revenue, more talk of strong Roomba sales leading into Christmas...I think we could be in the upper 20s by the next earnings report.

Dave, the buyers' guides on this blog -- links are on the top right of the page -- Roomba, Scooba, Looj -- all have coupon code and other deals where you can save 15-50%, or get free shipping, and sometimes both. (I troll all the vendors every day.)

Anonymous said...

I knew thief would lose! He can't go anywhere now with that reputation, all public.. read that 30 pages.. wow what a criminal. 30 points by end of week!

Anonymous said...

Ten bucks says the Army will cancel the contract altogether given that they're going to have to wait at least six months for the legal resolution.

Anonymous said...

Here's why this injunction isn't a slam-dunk.

Anonymous said...

That article is way off base.

Here's a recent tidbit to refute it. Guess what was used to find the latest proof of Iran's meddling:

Note the PackBot to the right of the Iranian rocket.

thorn_stevens said...

Looks like the shorts want to stoke some doubt heading into what should be a bloodbath for them on Monday. Anonymous #1: That article is more than a year old, and has been refuted by many other articles and the more than DOUBLING of the purchases of PackBots since then. You should even read the comments where EOD techs on the ground in Iraq had praise for the PackBot (the previous generation, mind you, not the xBot competition robot).

ANONYMOUS #2: If the Army cancels the competition and the contract and starts over, iRobot stands a good chance of winning and having a HIGHER contract award because they won't have to be competing against somebody who appears to have stolen their trade secrets.

Anonymous said...

RE: The army pulling the contract entirely...

I'm not really sure they could claim during the hearings that there was a pressing need for these robots (to save lives) and then later claim that "Nah! We can wait six months if we really want to." It would be a PR nightmare for them, and would further add to the embarrassment they must already be experiencing.

Relating to the awarding of the contract to the next lowest bidder, I hope that iRobot doesn't screw that up. While they certainly would like to have not bid down as low as they did (absent RoboticFX as a bidder), the fact is that they DID say they could do the contract at their final bid amount... and that was recently backed up by Helen G who said they wouldn't bid on projects that didn't make sense financially.

It is my hope that they will accept the bid at there last bid amount, and both iRobot and the Army should consider themselves lucky. Or, perhaps better for iRobot, some consessions from the Army on the conditions of the contract might be made because of the "irregular" way in which such a low bid was arrived at.

I REALLY don't want this to go back out to bid, because if it does we are back at square one, and a company like Foster-Miller might be able to put together a more compelling bid, knowing now what the original winning contract looked like.

FWIW, I don't think the Army really wants to put it out to bid again, because of the time involved for that process given the exigent needs for the troops expressed earlier.

thorn_stevens said...

The Army's actions in all of this are what I don't understand. I understand why a 20-something robothead might want to make millions copying someone else's design. I don't understand why the Army would go along with it -- even AFTER they heard of the destruction of evidence. Ditto for the U.S. Attorney.

Anonymous said...

You guys all need to take a course in government contracting. Even if you are required to go to "open bid" and you REALLY REALLY want product X from company Y, you carefully craft the requirements document, usually with the help of someone who works for company Y and is intimately familiar with product X, such that NO other product has the same specs or features. The contract writer then gets what they really want by attrition.

Sure Packbots fit the requirements of the xBot project but if the Army REALLY REALLY wanted them, they wouldn't have bothered with a competition. They would have simply spec'ed out what Packbot has that no other offering has. It's not that complicated.

The reality is that the Army wants something with a more disposable price tag. I can confirm this because I talk to Remotec operators here in the states and they rarely put the thing in harms way because it's $200K. Cops don't have money. The Army has a budget too albeit a large one. The Army wants a robot that they can afford to equip every squad with and afford to break and throw away. Packbot, as cool as it is, is too expensive. Same thing for the Talon. Negotiator, which IMHO looks like a piece of crap, has a base price of about a fourth that of Packbot and Talon.

Anonymous said...

I don't understand why the Army would go along with it -- even AFTER they heard of the destruction of evidence. Ditto for the U.S. Attorney.

...unless the unnamed defense contractor was Haliburton (or some other contractor with its appendages deep in the administration).


Anonymous said...

>The reality is that the Army wants
>something with a more disposable price

The reason the Negotiator is so much more inexpensive is due to the fact that he has almost no investment in the old "trial and error" engineering that goes into a system such as this. The blood, sweat, and years of working on a system such as this have to be repaid somehow.

Anonymous said...

"The reason the Negotiator is so much more inexpensive is due to the fact that he has almost no investment in the old "trial and error" engineering that goes into a system such as this. The blood, sweat, and years of working on a system such as this have to be repaid somehow."

Bullshit! blood, sweat and years of working that went into the track design?!? please... they had both robots dissected and that was all they could come up with.

Anonymous said...

>Bullshit! blood, sweat and years of
>working that went into the track
>design?!? please... they had both robots
>dissected and that was all they could
>come up with.

You're an idiot.

Working in a company like iRobot, you pick up a hellova lot more than just the track design. There are tons of little gotchas that can take a week or two or three to sort out that, once understood can be avoided the second time around. Why do you think ole Jameel wanted the entire stack schematic and bom - and he had the gaul to ask for it just a few days before he left.

Anyone that has ever built anything from scratch know this. It's this type of knowledge that also helped him greatly, along with the trade secrets he stole. Sometimes, what appears to be the simplest thing turns out to be far more difficult to design than you would believe.

Anonymous said...

Well, this comment chain is feisty!

My two cents:
- I am thrilled that IRBT has a great chance to get the $286M (or $279M - whatever that last bid was that IRBT made!) contract.
- I am also actually quite thrilled it is at the lower price. Because I am a long term investor not a day trader! The lower price will ensure IRBT maximizes efficiency in making these military robots. This does two things: 1) it will open up additional markets because the current price per unit is extremely high ($200,000 or so). A lower price will make the product more patable to law enforcement, etc. 2) it creates a larger barrier to entry since IRBT will get economies of scale from producing 3,000 more Packbots on top of the already produced 1,200.

I am way long in this stock and I believe that IRBT has turned the corner. OK, I am an eternal optimist but really believe this time, the corner is turned.

To Infinity and Beyond!


Anonymous said...

"Anyone that has ever built anything from scratch know this. It's this type of knowledge that also helped him greatly, along with the trade secrets he stole."

where does it say that Ahed worked on the project to design the arm? A whole lot of work must have gone into that and I am pretty sure all of that happened post-iRobot. I don't see why the entire robot that competed in the trial is being lumped into the idea that he stole iRobot's years of engineering... blood and sweat and all. The competition was based largely on the arm's capability so I don't see how RFx winning was based on them undercutting iRobot and "ripping them off."

thorn_stevens said...

You are "pretty sure" how exactly? Do you know Jameel personally? And where does it say that the competition was primarily about the arm? I'd say use your own eyes and common sense. The negotiator looks like a packbot, the guy worked on packbots and came up with "his" design about a year after leaving irobot and taking plenty of "memorabilia" with him. Do you really think he shredded 100cd's of data for nothing?

Anonymous said...

Thorn, I thought these were explosive detection robots. I used common sense to assume that the arm was an integral part in their performance. Also, I have not read anywhere any mention of a connection with Ahed, the arm design and iRobot. I have also not seen anything on iRobot's website move as smoothly as the Negotiator's arm.