RFID vendors create patent consortium

A group of 20 RFID vendors on August 9 announced the formation of a "patent pool" consortium intended to simplify and streamline users' access to RFID intellectual property.

Some 10 leading RFID companies have been identified as founders, according to ABI Research. They include Alien Technology, Symbol Technologies, Avery Dennison, Thingmagic, Moore Wallace, AWID and Zebra Technologies. The new body is said to be modeled on the successful structures and practices of existing industry groups that license MPEG and DVD technology usage.

Notable by its absence — so far — is Intermec Technologies, which has been at loggerheads with end-users and other industry players over its insistence on tightly controlling licensing of a number of important core patents it holds.

What does the new group mean for the industry?

"Regardless of how Intermec's IP issues are resolved," says Erik Michielsen, ABI Research's director of RFID and ubiquitous technologies, "there are dozens of other IP holders in the market that are looking to profit from EPC Gen2 licensing. They spent large amounts of money on R&D and they want to be rewarded for that investment. Because of the number and disparity of such patents, the industry — in the absence of a process like the one now beginning — would be heading for stagnation and quagmire."

The new group, says Michielsen, provides a clear migration path for scalable, long-term EPC Gen2, and should extinguish users' concerns about RFID intellectual property.

"RFID is about integrated solutions," he adds. "It's not about stand-alone companies taking ownership of the whole marketplace. Companies need to build cooperative solutions to move this market forward, and this is yet another example of how companies are working together to create more sustainable and scalable RFID solutions."

However, a couple of questions remain. One is the role of silicon manufacturers such as Texas Instruments and Philips, critical to the industry, and as yet not represented in the list of charter consortium members. While the whole membership list has not yet been released, ABI Research believes that it is important for the group's credibility that silicon vendors show support publicly.

Another question is raised by Intermec's absence from the group, and it calls to mind the Kyoto Protocol negotiations. The United States is by far the world's largest generator of greenhouse gases, and some commentators suggested that its refusal to sign renders the treaty effectively null and void. Would the absence of Intermec's 140-odd critical patents from the consortium's license plans significantly reduce their clout?

"With or without Intermec," concludes Michielsen, "the number of patent negotiations will be reduced from potentially hundreds down to a handful. If need be, companies can still address Intermec licensing on a one-to-one basis. The market will still move forward more quickly."

For more information on the consortium, contact Beth Schechner at ABI Research, 516-624-2542 or pr@abiresearch.com.

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