Prospects for the rapid adoption of RFID technology received a couple of big boosts in just a six-week period this summer. First, in August, 20 companies announced that they were forming an intellectual property (IP) licensing consortium that will simplify the process of licensing RFID-related intellectual property and managing RFID patents. Then, in early September, Intermec Technologies and Symbol Technologies agreed to settle their RFID intellectual property dispute. In the long run, RFID end users can expect to benefit from both developments. Dismantling patent and licensing barriers promises to speed up the RFID adoption process, increase competition, and assuage concerns about potentially disruptive lawsuits and costly patent disputes.
Under the agreement reached by Intermec and Symbol, Intermec will file for dismissal of its RFID lawsuit against Symbol. In addition, Symbol has joined Intermec's Rapid Start RFID IP licensing program, which gives Symbol access to a number of Intermec RFID patent portfolios, including RFID tags and fixed and portable readers. Symbol also is providing Intermec with access to its RFID IP by exercising the cross-licensing provisions of the Rapid Start program.
As for the patent pooling consortium, the group is modeled after existing associations in the electronic industry that license DVD and MPEG technology. Once it's up and running (probably early next year), the group will license patents that are essential to the commercially viable operation and manufacture of RFID chips, tags and labels, and readers. The licensing approach should relieve patent holders of the burden of managing hundreds of different licensing agreements with individual licensees.
Of the 20 companies involved, only eight have formally announced their affiliation with the group. They are Alien Technology; Applied Wireless Identification Group; Avery Dennison; Moore Wallace; Symbol Technologies; ThingMagic Inc.; Tyco Fire & Security; and Zebra Technologies.Noticeably absent from the group is Intermec, one of the largest owners of RFID intellectual property. Intermec says that because of the large amount of IP it holds, joining the consortium could trigger antitrust and other legal problems.
Under the proposed licensing arrangement, all essential RFID patents owned by members of the consortium will be made available to interested companies via a single license on fair, reasonable and non-discriminatory terms. The group has hired MPEG LA to administer a patent licensing arrangement for RFID technology and to determine which patents are viable for the industry, and in turn, how much revenue will be received by each patent holder.