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Robotics firm says rival stole designs

Ill. competitor won US contract

It's hard to miss the similarities between iRobot Corp.'s military robot and one produced by a new rival when the two models are side by side. Both have track wheels that can climb over debris or rough terrain and an extendable arm that can defuse a bomb or hold a camera.

But iRobot says the similarities are more than a coincidence.

In a case complete with private detectives and accusations of downloaded documents and shredded evidence, iRobot alleged last month that Robotic FX's products were built with trade secrets stolen by the upstart company's founder, a former iRobot engineer.

Jameel Ahed, founder of Chicago-based Robotic FX, dismissed iRobot's allegations last week in a brief e-mail statement to the Globe, saying the Burlington-based company was merely feeling the heat from a new competitor for a $280 million military contract - a contract Ahed's smaller company won last Friday.

"We make a vital homeland security device and my former company has known about our growing business for at least two years," Ahed wrote. "Only now, when we are rivals for an important U.S. Government contract did they file this lawsuit. We believe we will prevail."

The case took another twist yesterday, when iRobot went to federal court in Boston, asking a federal judge to halt production at Robotic FX. Representatives from the Justice Department and the Army weighed in against such an injunction. The arguments played out behind closed doors because of national security considerations. But in a brief filed yesterday, US Attorney Michael Sullivan said halting production would jeopardize the lives of American soldiers in Iraq and Afghanistan.

"The protection that the detection robots provide for our troops easily dwarfs whatever interest the public has in a private dispute between two corporations," Sullivan wrote.

The suit, filed in Massachusetts and Alabama, offers a rare glimpse into allegations of theft in the high-tech industry. Mike Slattery, senior managing director of business intelligence and investigations at FTI Consulting Inc. in New York and a 30-year veteran of the FBI, said now-common technologies like e-mail and flash-memory drives make it easier for employees to copy trade secrets.

"Years back, it would be hard copy," said Slattery. "As competition increases in various industries and marketplaces, the risk becomes higher," Slattery said.

The Burlington company is best known today as the maker of Roomba, a robotic vacuum cleaner that has sold more than 2 million units worldwide. But the company, founded in 1990 by graduates and faculty members of the Massachusetts Institute of Technology, is a leading supplier of robots to the Pentagon. Its battery-powered, radio-controlled PackBot machines proved their worth in the aftermath of the Sept. 11 terrorist attacks, when they were sent into buildings near the collapsed World Trade Center with cameras to evaluate their structural integrity. US and allied militaries have bought more than 1,000 PackBots. In Iraq and Afghanistan, American soldiers routinely use them to scout enemy positions or disarm roadside bombs.

But Ahed's company hopes to grab a share of the market with its Negotiator robot, a device that closely resembles the PackBot. Robotic FX's chief operating officer, Kimberly Hill, said state and local police and fire departments in nearly 20 states have purchased the Negotiator since it went on sale in July 2004. The military contract was a natural extension of the business, she said. "What the government wanted was, can you meet the technical specs? Do you have the lowest price?" said Hill. "And the answer was yes and yes."

According to iRobot, the PackBot sells for $75,000 to $150,000, depending on a unit's configuration. Robotic FX would not disclose the prices of its robots.

According to documents filed with the federal court, Ahed, a 2000 biomedical engineering graduate of the University of Illinois, was employed as an intern at iRobot in 1999, then hired full time in February 2000. He had access to detailed technical information about the PackBot, and was bound by his employment contract to keep the information confidential even after he left iRobot. Ahed said in a deposition that he was already thinking about creating a company when he resigned from iRobot in June 2002. But iRobot's suit alleges that one day after his resignation, Ahed used his still-active iRobot e-mail account to send confidential iRobot files to a Robotic FX address. Ahed set up his new business in the Chicago suburb of Worth, in the same building where his father runs a dentistry practice. Robotic FX has since relocated to Alsip, Ill.

Officials for iRobot say they learned about the Robotic FX Negotiator robot in September 2005, more than a year after Robotic FX began selling the Negotiator to law enforcement agencies. "As we took a look, we were significantly concerned," said Joseph Dyer, president of iRobot's government and industrial robot business unit. The Massachusetts company took action Feb. 7, sending a letter to Robotic FX to demand that the company stop using iRobot trade secrets. Through his attorney, Ahed replied to iRobot that he was in compliance with the confidentiality agreement he'd signed and hadn't violated iRobot's intellectual property rights.

In August, iRobot filed a lawsuit in Massachusetts state court, alleging breach of contract and use of a computer to commit fraud and misappropriation of trade secrets. The company also filed a patent infringement lawsuit in federal court in Birmingham, Ala., because the US Army's robot procurement arm is located in Huntsville, 87 miles away. At the request of Robotic FX attorneys, the Massachusetts state lawsuit has been moved to a federal court in Boston.

Parties to a lawsuit are required to preserve all evidence in the case. An iRobot attorney contacted Robotic FX attorney Patricia Kane Schmidt by e-mail and FedEx on the day the suits were filed, urging her to warn her clients not to destroy evidence.

But documents filed by iRobot say that on the evening of Aug. 17, Ahed, watched by private detectives from Kroll Inc. hired by iRobot, emerged from the Robotic FX offices and loaded several boxes into the trunk of a white Saturn sedan belonging to Hill, the company's chief operating officer. The next day, Ahed discarded the items in a dumpster in Chicago, not far from Hill's apartment.

Kroll operatives who witnessed Ahed's actions retrieved the discarded materials, which included electronics components inside a box marked "iRobot," as well as the empty carton for a new paper shredder. "Most particularly we found a tool that is a confidential piece of technology used by iRobot," said iRobot attorney Ruffin Cordell. "It appeared that somebody had gotten hold of a replica." Cordell declined to identify the tool, but said it had been designed by iRobot engineers for use in assembling PackBots.

On the strength of this evidence, iRobot got a temporary restraining order against Robotic FX the following Monday, ordering the company not to destroy any documents or data files. The US District Court in Birmingham also authorized US marshals to search Robotics FX's offices and the homes of Ahed and Hill. These searches were carried out Aug. 21. The raid at Hill's apartment turned up a laptop computer belonging to Ahed and hidden under Hill's bed. The computer was running an eraser program that had wiped the hard-drive clean by the time the laptop was discovered, according to iRobot court filings.

Apart from Ahed's e-mailed statement, Robotics FX has declined to comment on the case. But according to a deposition given by Hill on Aug. 27 and obtained by the Globe, she and Ahed destroyed backup copies of their company's own data files, not files belonging to iRobot. Hill said that they were aware of being watched on the evening of Aug. 17 and believed that iRobot operatives might attempt to steal Robotic FX secrets, to improve iRobot's chances of winning the military contract, code-named X-bot by the Army. "Jameel and I became concerned that iRobot was getting desperate in this X-bot solicitation," Hill said, "and we became concerned that they were going to try to break into our building and steal some of our data to put us out of business."

According to Hill's deposition, Ahed collected CD-ROM disks that they then carried to Hill's apartment. The next day, Aug. 18, Ahed purchased a paper shredder at a local Staples office supply store. He used the shredder to destroy some disks, but it broke. Ahed later purchased a second shredder at an Office Max to finish the job.

Ahed answered few questions during his own deposition, the same day as Hill's. On the advice of his attorney, he repeatedly invoked the Fifth Amendment right against self-incrimination. But in a second deposition taken on Wednesday, he confirmed Hill's account of events and acknowledged unplugging the laptop and hiding it under Hill's bed when US marshals arrived to search the apartment.

The federal court in Alabama had ordered Hill's deposition sealed, along with the first deposition by Ahed. The Globe obtained them when they were erroneously published on PACER, a public database of federal court filings.

Hiawatha Bray can be reached at bray@globe.com.

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