The PackBot — iRobot's military droid — has special oblong paddles that help it flip over. The Navigator, built by Robotic FX, used a similar mechanism. *

Photo: Rainer Hosch * Jameel Ahed says he didn't really read the email. He was preoccupied with trying to solve a few electrical problems on the robots he hoped his company would sell to the US Army for as much as $300 million, one of the largest robot orders in history. So he didn't pay much attention to the fact that iRobot, his former employer and chief competitor for the Army contract, was suing him for stealing their designs. And he didn't read the attachment ordering him to preserve any evidence related to the case.

Nevertheless, a few hours later that evening, Ahed began cleaning out his suburban Chicago office. He gathered up circuit boards and electronic components and threw them into a box marked "iRobot" — maker of the cute little Roomba vacuum cleaner and sophisticated military robots. He stuffed the box into a green duffel bag, carried it outside, and put it in the trunk of a white Saturn registered to the parents of Kimberly Hill, his girlfriend and the chief operating officer of his company, Robotic FX.

Around midnight that night, August 17, 2007, Ahed and Hill drove to her apartment on Chicago's North Side. The next morning, they went out to breakfast. When they came out of the restaurant, the Saturn's trunk was ajar. Ahed made sure the duffel bag was still inside. Then they drove to a Staples, where he bought a shredder and a disc-erasing program. On the way back, Ahed stepped out of the Saturn, opened the trunk, and emptied the contents of the bag into a curbside dumpster a block from Hill's apartment.

Ahed didn't know that a private investigator was parked nearby. The PI, hired that morning, photographed the dumpster drop and recovered all of the gear. Then he reported back to his client: iRobot.

Ahed was 20 years old when he joined iRobot in May 1999, a biomedical engineering student at the University of Illinois on a summer internship. In those days, the company was just 80 or so geeks in the Boston exurbs designing toys for Hasbro and doing research for Darpa. Ahed stood out. He was hardworking, flirtatious, and outgoing. He dressed well (for an engineer, anyway) and drove a DeLorean. The only criticism anyone could level was that he had the arrogance of youth — he seemed to think he was the smartest kid in the room, that he could solve any problem. When the summer ended, iRobot gave him some robot parts to play with at school; when he graduated, they gave him a job.

The company was a classic startup — almost a cliché. Everyone hung out together. Everyone worked constantly. "We'd sleep in the office, by the front door, so the first people arriving in the morning would hit us on the head and wake us up," says Tom Frost, Ahed's former supervisor. They watched movies at Ahed's apartment and test-drove robots at Frost's parents' house on the beach in Rhode Island.

The range of projects at iRobot was staggering: an automated industrial floor cleaner for Johnson Wax (now SC Johnson), makers of Windex and Pledge; a baby doll that laughed when its feet were tickled; and Urbie, a small, rugged military robot with flippers that enabled it to climb stairs and right itself when turned upside down.

But Ahed was dissatisfied. He missed his hometown of Chicago, and he wanted to be his own boss — or at least to rise in the company a whole lot faster. Building radio antennas wasn't enough. In December 2001, he bought the domain name roboticfx.com, planning to launch his own startup.

Then Frost chose Ahed to work on the electrical team for the PackBot — a descendent of the Urbie for which the company had high hopes. Ahed made two requests. He asked for a raise and for the machine's full electrical schematics. That set off alarm bells. Ahed already had access to the PackBot's mechanical designs, which were kept on a shared server. If he got hold of the complete electricals, he'd be able to make a PackBot on his own.

Frost said no, and Ahed exploded. "I was left without the tools that I needed to do my tasks," he said later in a videotaped deposition. "That frustration took me over the top ... I told Tom if I didn't have — if I didn't get help, that I didn't want to stay." Ahed gave his two weeks' notice.

Before he left, a company staffer demanded that he sign a final confidentiality agreement. Ahed complained but signed. The next day, an email was sent at 10:18 pm from his still-active iRobot account to his new Robotic FX address detailing how the PackBot's batteries were made. Shortly thereafter, Ahed packed up and returned to Chicago.

In July 2002, a month after Ahed quit, Frost took five PackBot prototypes to Afghanistan. Near the mountainous Pakistani border, the Army's 101st Airborne sent the squat, rectangular machines to map suspected terrorist compounds and find weapons caches. Normally, flesh-and-blood scouts would risk their lives to do these jobs. Now the 101st was risking only hardware. The soldiers liked the robots so much, they wouldn't let Frost take them back home with him. Stateside, Frost and his Army liaison became popular figures on the Pentagon briefing circuit, even pitching the robots to defense secretary Donald Rumsfeld.

By the summer of 2003, iRobot had orders for a few dozen PackBots at around $60,000 each. And that looked to be just a warm-up. Advanced robots are the heart of the Army's $200 billion Future Combat Systems modernization project. By 2030, 15 brigades are to be reinforced by more than 1,200 little robot buddies.

The firm's civilian business was taking off, too. In 2002, engineers applied what they'd learned building the SC Johnson floor-cleaner to a disc-shaped bot they called the Roomba. The quirky $200 robovac became the must-have gadget that holiday season, eventually selling more than 2.5 million units. On November 9, 2005, iRobot went public and emerged with a market capitalization of more than $620 million. The PackBot rang the Nasdaq's opening bell.

A private detective photographed Jameel Ahed unloading iRobot-related equipment from his car.

Photo: Courtesy of Xconomy Ahed, meanwhile, was working out of a small office and basement workshop attached to his father's dental practice. He was intent on creating a lighter, cheaper, easier-to-operate version of his former employer's machines. And he was smart about it. He used inexpensive commercial processors instead of robot-specific chips. He designed custom fixtures so he could injection-mold thermoplastic rubber parts — much lighter than the PackBot's aluminum components. By 2004, Ahed had a bare-bones prototype he called the Negotiator. It weighed just 20 pounds and cost less than $30,000 — half what iRobot was charging for a comparable early version of the PackBot.

The Negotiator's driving system also beat the PackBot's, which at the time used two hockey-puck-like discs mounted on a console — a nonintuitive and complicated setup. Early models of the Negotiator worked with a simple joystick. Later, Ahed incorporated an ingenious puppet controller, similar to what doctors use to teleoperate surgical machines. Pinch your fingers and the Negotiator's claw pinches, too. (The latest PackBot works with joysticks or a PlayStation-style D-pad.)

Ahed debuted the Negotiator at a trade show in April 2004. He made his first sale three months later, and a few months after that he sold six Negotiators to the Illinois State Police for about $20,000 each. Then, in September 2005, an iRobot sales rep saw a Negotiator at a police conference in Miami. Like the PackBot, it was about 2 feet long and a foot wide, and it, too, had tanklike treads with ovoid flippers. He couldn't get his cell phone out fast enough. "You've got to look at this, quick," he told Frost. "This thing looks a hell of a lot like ours."

Eventually, iRobot managed to buy a Negotiator through a third party. Frost and his team were struck by how closely the wheels and treads resembled the PackBot's. "It was upsetting," Frost says. "He worked for me. We'd been to each other's homes. Gotten our asses kicked in softball together." In February 2007, iRobot's lawyers sent a cease-and-desist letter to Ahed, demanding that he stop making and marketing the Negotiator.

Five months later, in July, the Army announced its biggest ground robot contract ever. The so-called xBot deal would be worth up to $300 million and cover as many as 3,000 units — a surge. Robots were already a familiar sight on battlefields. In 2004, the Defense Department had 162 robots in Iraq and Afghanistan; in 2007 there were more than 5,000, from a variety of vendors. Most of the bots in the field were tiny — really just souped-up, radio-controlled toy trucks with cameras attached. But the Army wanted to deploy robots tough enough for combat conditions. And with the number of IEDs spiking, they wanted the machines yesterday. The first 101 would be due six months after the contract was awarded.

Overseeing the contract was a Marine colonel named Ed Ward at the Robotic Systems Joint Project Office in Redstone Arsenal, Alabama. A former helicopter pilot and business consultant, Ward was famous for establishing a cheap, reliable repair shop for bomb-handling robots in Iraq in just a few weeks. He wanted to bring that same kind of economy and speed to the robots themselves, and he thought $120,000 a pop for the upgraded, fully loaded PackBot was a lot to pay. "Look, if I see something strange down the road and I want to take a look at it, I don't need all the bells and whistles," Ward says. "I just need mobility and a good camera."

Rather than go through a months-long bidding process, the JPO announced a drive-off, a sort of robot ropes course, to be held in August. And to bring prices down, the Army would then hold a reverse auction, encouraging sellers to underbid each other.

For iRobot, this was a crucial opportunity, a chance to get a bigger, more lucrative foothold in the military market. At first glance, the company seemed to have every advantage over the competition. The xBot specs called for a robot weighing 50 pounds or less that could hurdle obstacles and scope out potential bombs. The PackBot was just a few pounds over and could already do all that.

But when iRobot's people started digging into the details of the contract, they were spooked. "Our initial reaction was, whaaaat?" Frost says. The request for proposals didn't mention reliability, even though the machines were destined for Iraq and Afghanistan. The reverse auction didn't make sense to them, either. "It's not unusual for a commodity like road salt, where price is the only discriminant," says Joe Dyer, a retired vice admiral who now oversees iRobot's government business. "But a tightly integrated technology? If there's a precedent, I'm unaware of it."

iRobot's Tom Frost felt betrayed by his ex-colleague: "He worked for me. We'd been to each other's homes."

Photo: Rainer Hosch The company plowed ahead, eventually entering two machines — a modified PackBot and a model tailored for the Future Combat Systems program. There were so many modifications to be made, like switching to off-the-shelf encoders, gears, and cameras, that engineers began working around-the-clock shifts. In August, Frost and his crew flew to Huntsville, Alabama, home of the JPO and the site of the drive-off. They tipped the beds over in one of their hotel rooms and converted the place into a makeshift repair shop.

Race day began with a weigh-in and a quick inspection. Soldiers confiscated the engineers' cell phones and cameras to make sure that they couldn't contact (or even see) any of the other competitors. They led the PackBot crew into the 104-degree Alabama summer heat and onto the test track, an old firing range ringed with hills.

Each robot was allowed 90 minutes to complete the course. The PackBot followed a zigzagging series of green flags against grassy fields — a challenge for electronic eyes — and identified mock IEDs in trash piles along the way. It barreled across sandpits, gravel, and rock. Sitting in 6 inches of water, the robot lifted a 5-pound simulated pipe bomb and spun it around, showing how well its arm could move. It then drove up a ramp and into the back of a tractor-trailer, where it picked out coat hangers, bowling pins, and rocket launchers amid the shadows. Finally, the PackBot had to show how fast it could sprint — and how slow it could creep along. "That was the worst part," says PackBot driver John Souliere. "As the clock is ticking down, we're watching it go as slowly as it can." But the bot made it with 12 minutes to spare. Frost and his team returned to Boston exhausted and triumphant.

And the Negotiator? Ahed and his representatives rebuffed requests for comment (about this and every other aspect of this story). In fact, no one will describe the Negotiator's performance on the record: Army officials won't even reveal how many teams competed in the xBot trial. But emails recovered from one of Ahed's hard drives say that the Negotiator lost power before it finished the course. Ahed apparently swapped out the battery and asked for a retest. He got it, and the Negotiator completed the course.

A few days later, an official told Frost's crew that they'd have to run the course again. One of the tests relied too much on knowledge of military gear, he said. That was odd — how much wartime experience do you need to distinguish a rocket launcher from a bowling pin? Frost piled his team back on the plane, but bad weather grounded them in DC. They rented a car and sped down to Alabama. The shape and sequence of the test course had been slightly rearranged. This time, the PackBot finished with 40 minutes left on the clock.

Meanwhile, as Frost's team was packing to return to Alabama for this second audition, iRobot's lawyers emailed Ahed to notify him of their lawsuits filed in Alabama and Massachusetts for patent and trade secret theft. The following morning, a Saturday, the private investigators snapped the pictures of Ahed's dumpster run.

Ahed spent the rest of that weekend scrubbing files from his hard drives and destroying the CD-ROMs he had collected from the office. Many of them contained information about early Negotiator designs. He fed so many CDs into the shredder, it finally gave out. He bought a second one.

On Monday, August 20, a district court judge in Alabama issued a temporary restraining order against Robotic FX, demanding that it preserve "all evidence, information, data, and documents." The next day, iRobot's lawyers showed up at Robotic FX's office, US marshals in tow.

They searched the office, then Ahed's parents' house, and finally headed to Hill's apartment in Chicago. Ahed and Hill got there first, barely, and went in through the back door. Hill let the marshals in the front while Ahed ran to the bedroom. His laptop was there, its screen displaying a message that the hard drive had been wiped clean. He unplugged it, put it in a case, and slid the case underneath the bed. Then he went to the living room, where the marshals were asking Hill where the computers were. She didn't mention the laptop. They found it anyway.

And with that, iRobot figured the competition to supply the Army's unmanned surge was over. Sure, the xBot contract was supposed to go to the lowest bidder, in theory. But the iRobot team was certain the military wouldn't give the contract to a "gentleman of such questionable deportment," as Dyer told me. For that matter, how was Ahed going to make 3,000 robots anyway? "We were very, very suspect of our competitor's ability to produce both quantity and quality," Dyer says. "So we decided, we're not going to underbid a six-person company working out of Dad's dental shop." iRobot made what it considered a reasonable offer: $286 million. Ahed entered what he must have thought was an opening counterbid: $285 million. iRobot didn't bother to respond.

On September 14, 2007, the Army awarded the five-year xBot contract to Ahed for $279.9 million (Ahed knocked off the extra $5.1 million to sweeten the deal).

iRobot went into battle mode. The company filed official protests with the Army and petitioned the Massachusetts judge for a preliminary injunction to put the brakes on the xBot contract.

The Army fought back. Ward argued that there were too many bombs going off in Iraq to stop things now. "The number one cause of Soldier and Marine casualties are IEDs, and this system allows the Soldier and Marine to complete their mission while keeping them out of harm's way," he wrote to the Massachusetts court. "Without the xBot, the combat units will suffer additional casualties."

On September 24, Ahed took the stand in US district court in Boston. He admitted to sweeping his office for old discs and circuit boards — because he no longer wanted "to have any iRobot memorabilia" lying around. Oh, and also because of his concern that he was being followed: "I was afraid someone was going to come and take them."

Military brass didn't buy it. On October 23, Joanne Byrd, a contracting officer with the Army, concluded that there were "questions regarding the award" and that a "reassessment" of Robotic FX was necessary. The bid was officially frozen.

The next week, judge Nancy Gertner granted iRobot a preliminary injunction and ordered the suit to go to trial. She mostly ignored the question of whether the Negotiator's tracks were rip-offs of the PackBot's, focusing instead on Ahed's "highly suspect" behavior. In mid-December, the Army canceled the Robotic FX contract and handed the deal to iRobot for $286 million.

And that, it seemed, was that. The robot thief got his due. Soldiers would have their machines. iRobot got the contract. "This had more twists and turns than a John Grisham novel," Dyer says. "But now it's done."

Except the story has one more potboiler twist. Yes, Jameel Ahed almost stopped his former bosses from getting an important military contract, and he probably used some of their designs to do it. He certainly tried to destroy evidence to that effect. But why he thought he could get away with it has an explanation that was barely mentioned in court.

Ward had been a Negotiator fan since June 2006, smitten by its easy-to-use controller, its sharp-eyed camera, and, of course, its minuscule price tag. "It changed the whole perspective on what robots could cost. This was dramatically different, an order of magnitude different, from what we had seen," one military official says. "It had the potential of changing the whole landscape of robotics." The JPO ordered several of the machines just to play around with, though it wouldn't agree to a later request from Robotic FX that the government protect the company from future patent lawsuits.

In meetings with robot makers, military officials liked to bring up the Negotiator — and its price. "They absolutely used it as a club against us," a former iRobot employee says. When the xBot competition came along, that club turned into a sledgehammer. The xBot specs essentially asked for a smaller, lighter, stripped-down PackBot — in other words, a Negotiator. The reverse auction put a premium on low cost. It was as if the specs had been written for Ahed.

Yet to iRobot, Ahed didn't seem like much of a threat. The company had swatted away knockoffs before. And how could Ahed hope to fill the Pentagon's robot needs from his father's basement? Some iRobot employees hung pictures of the Negotiator around the office as objects of ridicule.

What iRobot didn't know was that Ahed had a partner. In court, Ahed admitted that a large defense contractor had "helped us with some components" and a bit of cash. In truth, the relationship between the two companies — not to mention their relationship with the military — went much deeper.

In return for an interview with an executive of that defense contractor, I agreed not to name him or the company. I can say that the firm is big enough to make robots in quantity — something iRobot had only barely figured out how to do after years of supplying the government. The executive wanted the infantry robotics contract badly; delivering robots to soldiers was an opportunity for decades of steady cash. "We needed that product," he tells me. The company didn't have a robot that could run the Alabama course.

Meanwhile, Ward, the Army robot expert, continued to talk up the Negotiator. "He kept asking us whether we had taken a look at this robot, that it was a damn good piece of kit," the executive says. Ward denies that he asked any executive to team up with Ahed. That would have been against the rules, and anyway he didn't have to. "Eventually, you figure out for yourself where things lie," the executive says. In mid-June, he flew out to meet with Ahed. A month later, when the xBot contract was formally announced, he went back for a personal demo in Ahed's basement workshop.

At first, the executive was horrified at this "dungeon." Then he gave the robot a try. Ahed laid a quarter on a table. The executive put his hand into the puppet controller, pinched his fingers, picked up the coin with the Negotiator's claw, and dropped the quarter into his shirt pocket. No other robot on the market was this easy to handle or this agile. "A first-time user — picking up a goddamn quarter!" the executive shouts. "That's when I knew: I wanted that robot."

He proposed a deal. Ahed would move out of the basement and into a facility befitting a big-time military supplier. If he won the xBot competition, the executive's firm would buy Robotic FX and use its own, larger assembly lines to crank out robots by the hundreds. And iRobot wouldn't be able to underbid, because the Negotiator was so cheap to make. It would be a triple win: The government got bomb spotters cheap enough to outfit the whole infantry, Ahed got rich, and the defense company got a giant new market. Ahed agreed. How could he not?

Their arrangement might seem a little underhanded. But in the world of defense contracting, it was business as usual — and depending on your perspective, kind of admirable. Pentagon officials often write requirements for military gear with a particular company in mind. (iRobot itself likely benefited from such tuned specs in earlier contracts.) If anything, the rigid performance thresholds and reverse-auction format of the xBot deal made it fairer than many Pentagon awards. "This is a case of trying to get the best product for the best price," says Scott Amey, general counsel for the Project on Government Oversight, a nonprofit, nongovernmental organization that regularly investigates suspicious Pentagon deals. "Tell me what's wrong here."

Of course, there is the not insignificant matter of the Negotiator's treads — the ones that look so much like the PackBot's. The executive and Ahed knew iRobot would come after them for patent infringement. But they had a plan. One line of their defense went like this: Because iRobot had developed the PackBot in part with money from the US military, its design could arguably be considered public property. At the very least, debating such a claim could tie up a lawsuit in court for years. "We were prepared to spend hundreds of thousands to defend ourselves," the executive says. And while the lawyers squabbled, the Army was ready to push ahead. "This [is] a business issue between two companies and the government [is] not intending to become involved," Ward emailed the two robot makers.

It almost worked. "Jameel thought it was over. He thought he could get this $300 million contract and there was nothing anyone else could do about it. He thought his dreams were about to come true," the executive says of Ahed. "He was very naive about what the other players in the market would do."

When Ahed got the email from iRobot's attorneys announcing the lawsuit, it couldn't have been a surprise — he had received the cease-and-desist letter months earlier. He and his partner discussed a media strategy in which Ahed would be portrayed as "the aggrieved party ... in a David vs. Goliath situation," according to one recovered email.

Yet when marshals showed up at Ahed's door, he called the executive in a frenzy. "What should I do?" he shrieked. The man answered: Cooperate, no matter what. Tell them absolutely everything. Of course, Ahed responded. Of course. But he had already destroyed evidence, giving iRobot the ammunition it needed to undermine Ahed's credibility and get the deal scuttled.

iRobot has delivered the first few dozen machines to Alabama, and the company expects to fulfill its initial obligation of 101 robots this month. In all, under the terms of the contract, iRobot could provide up to 3,000 infantry robots over the next five years. Ward, the xBot manager, has retired from the military. The executive who hooked up with Ahed is still looking for a robot to crack the infantry market.

In December, iRobot settled with Ahed. Under the terms of the agreement, he is barred from "competitive activities" in the robotics industry for five years and his venture was officially dissolved. Its Web site now reads: "Robotic FX is no longer in business. Certain residual assets are now owned by iRobot Corporation, the leader in small unmanned ground robots." In other words, iRobot can now use some of Ahed's Negotiator designs. And the thousands of robots that are supposed to accompany America's future ground forces will almost certainly be built by iRobot.

Contributing editor Noah Shachtman wrote about network-centric warfare in issue 15.12.

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