The iRobot Trade Secret Theft Case
While it’s easy to imagine that any trade secret theft case would be dripping with intrigue, the iRobot case sounds like novelist Tom Clancy could have written it.
The case involves one Jameel Ahed, a young engineer once employed by iRobot Corporation – widely known for its Roomba robotic vacuum, and to a lesser extent for its PackBot military tactical robot. After abruptly quitting his job at iRobot where he worked as an electrical engineer, Jameel started a competing company and built a machine eerily similar to the Packbot – dubbed the Negotiator. By employing a few cost cutting design features in building the Negotiator, the 28-year-old Jameel was able to undercut the PackBot’s costs and win a $279.9 million contract to supply his version of the remote-controlled drones to the U.S. Army.
But this potential David-beats-Goliath success story was not to be. Before Jameel was able to deliver his first bot, iRobot sued his company, Robotic FX, for trade secret theft and patent infringement and won, receiving as damages the rights to Jameel’s lower cost Negotiator design. The Army was forced to cancel its contract with Robotic FX and iRobot won a renegotiated $286 million agreement to deliver 3,000 robots over five years.
What could have been yet another oft-repeated and boring tale of an employee taking too much of his former employer’s information with him to a new job actually turned into a mini-drama that eventually formed the crux of the case.
The Story Unfolds
The drama begins after the Army hosts performance tests for the competing Negotiator and PackBot droids at a specially constructed obstacle course at Redstone Arsenal in Alabama. The 1-foot x 2-foot drones feature tank-like treads and two telescoping arms - one with a camera on the end and the other with a grasping claw. A signature feature of both robots is a set of front treads shaped like a pinball flipper that can rotate, allowing the robot to climb stairs or to right itself if flipped over – a feature patented by iRobot. The military is especially interested in the machines’ abilities to handle reconnaissance and bomb disposal tasks.
Following their separate runs, the two companies are scheduled to bid for the contract in a reverse auction. But already having served Jameel with a cease and desist letter month’s earlier, iRobot’s attorneys informed him the day after the performance tests that he was being sued for trade secret theft and patent infringement. And this is where the drama begins.
Hiding the Evidence
iRobot had the foresight to hire private investigators to monitor Jameel’s activities from the moment he was notified of the suit. Later testimony revealed that after he received the email from iRobot’s legal team on a Friday, he left his office with a number of CDROMs and electrical components in a box labeled “iRobot” and put them in his car. The next morning, he bought a shredder, and a hard-disk erasing program, and then, on the way to his girlfriend’s apartment, he stopped at a dumpster and emptied the box of electrical components. The private investigators that were tailing him retrieved the items he discarded.
Jameel and his girlfriend, who was also Robotic FX’s Chief Operating Officer, spent the weekend feeding CDROMs into the shredder and erasing hard drives on computers at the office and at home. The first shredder couldn’t stand up to the load and broke, so Jameel had to go buy another one.
Finding the Evidence
Aware that Jameel was destroying evidence, iRobot was unable to do anything until Monday morning when its attorneys obtained a preliminary injunction ordering Robotic FX to preserve all records and evidence. The next day, the attorneys showed up at Robotic FX offices with U.S. Marshals and began searching the premises.
The search continued at Jameel’s girlfriend’s apartment where Jameel managed to enter through a rear door minutes ahead of the authorities and stash a laptop computer under the bed. They found it anyway and discovered a message still on the screen that the hard drive had been scrubbed. They photographed it for evidence.
The Case Unravels
In a panic, Jameel phoned an executive at the company slated to manufacture his robots for the Army contract and pleaded, “What do I do?” The executive already knew there was going to be a legal challenge from iRobot. His company’s strategy was to drag the case out for years, if possible, while they delivered robots to the army and cashed million dollar checks. His advice to Jameel? “Cooperate.”
Unfortunately he was unaware that Jameel had already compromised their case badly. So badly that Judge Nancy Gerstner granted an injunction preventing the Army contract from going forward based almost exclusively on Jameel’s highly suspect behavior, and ordered the case to trial.
Having lost the Army contract, Jameel settled the suit before trial, agreeing to close his company and stay out of the robotics business for five years, and to transfer to iRobot his Negotiator designs.
Lessons Learned
The two things that stand out most in this case are:
- The young Jameel’s naiveté believing he could illegally appropriate trade secrets and violate patents with impunity is stunning.
- The value iRobot received in acquiring Jameel’s lower-cost redesign of its product is probably worth many millions of dollars and was ultimately a just resolution of the case.
Related Articles
- The Web 2.0 Service Mark Controversy
- Internet Trademark Infringement Cases
- The Flap Over Software Patents
- Trade Secrets – Fast FAQs
Resources
Bray, Hiawatha (2007). Robotics firm says rival stole designs. Retrieved Jan 24, 2009 from the Boston Globe web site: http://www.boston.com/business/technology/articles/2007/09/21/robotics_firm_says_rival_stole_designs/
GoRobotics (n.d.) iRobot to Robotic FX, “You stole our design.” Retrieved Jan 24, 2009 from the GoRobotics web site: http://www.gorobotics.net/the-news/latest-news/irobot-to-robotic-fx-you-stole-our-design
Roush, Wade (2007). Saying Ahed’s Destruction of Evidence “Profoundly Undermines” His Credibility, Judge Issues Partial Injunction Against Robotic FX—Much of Record Sealed. Retrieved Jan 24, 2009 from the Xconomy web site: http://www.xconomy.com/2007/11/02/saying-aheds-destruction-of-evidence-profoundly-undermines-his-credibility-judge-issues-narrow-injunction-against-robotic-fx-much-of-record-sealed/
Roush, Wade (2008). In Coda to Robotic FX Lawsuit, iRobot Introduces Its Own Version of Negotiator Robot. Retrieved Jan 24, 2009 from the Xconomy web site: http://www.xconomy.com/boston/2008/08/06/in-coda-to-robotic-fx-lawsuit-irobot-introduces-its-own-version-of-negotiator-robot/
Schachtman, Noah (2008). Who Stole the Plans for iRobot’s Battle Bots? Retrieved Jan 24, 2009, from the Wired Magazine web site: http://www.wired.com/techbiz/it/magazine/16-05/mf_robotthief?currentPage=all#
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Very well written article, but I wouldn’t expect anything less from the author. LOL. It ’s an interesting case though. I guess it just shows that even rocket scientists (or in this case a robotics engineer) can be as dumb as a box of hammers. It gives me a new standard by which to measure myself…