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The retail industry takes off


Last week Amazon took a huge leap into the traditional retail sector by buying organic food chain Whole Foods Market. This £10.7 billion takeover has demonstrated Amazon’s evolving market strategy, from an online bookstore some 22 years ago to general online retail and more recently into bricks and mortar outlets. The company has grown to become the fourth most valuable public company in the world.

A multi-level fulfillment centre in a hive-like design - part of Amazon's recent drone technology related patentsEqually impressive is Amazon’s growing patent portfolio. Last year Amazon increased its number of patents by 1622, an increase of 46% compared to 2015, according to IFI. Amazon appears to have a particular interest in filing patents relating to drone delivery systems, networks and infrastructures. One such patent, granted on 5 April 2016, describes an airborne fulfillment centre (AFC) and use of unmanned aerial vehicles (UAV). The patent defines a computer implemented method for receiving an order for an item from a user and instructing an UAV located in the AFC to engage the item, depart from the AFC and navigate to a delivery location and disengage the item at the delivery location. More recently, the USPTO published an application on 22 June 2017 describing a multi-level fulfillment center designed to accommodate landing and takeoff of unmanned aerial vehicles, possibly in an urban setting. One the figures from the patent application shows a hive-like structure.

It would seem that the combination of Amazon’s heavy patent filings in the drone delivery market and its purchase of grocers have not gone unnoticed in the retail industry. Tesco, apparently keen not to be left behind, has recently partnered with Starship Technologies which has developed land-based drone delivery systems and has its own patent portfolio related to drone technology.

Amazon is expanding its R&D facilities in Cambridge, UK where research into drone delivery systems is taking place. Recent successful testing has been reported, involving a drone delivery of a bag of popcorn and a TV streaming stick to a customer’s garden. However, only customers with huge gardens who wanted items weighing less than 2.6kg were allowed to participate.

Given the heavy patent activity in this area, other companies may be keen to find means of operating in the landscape or filing patents of their own, in order to avoid falling behind in the technology race.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

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