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8/10/2005
07:28 AM
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RFID Stakeholders Propose Patent Licensing Consortium

Ten leading radio-frequency identification vendors are teaming up to form a consortium to simplify the process of licensing patents essential to the manufacture and operation of RFID chips, tags, and readers.

LONDON — The attempt by a group of RFID vendors to form a "patent pool" consortium intended to simplify and streamline users' access to RFID intellectual property was welcomed by analysts.

For instance, ABI Research analyst Erik Michielsen said the initiative “provides a clear migration path for scalable, long-term EPC Gen2, and should extinguish users' concerns about RFID intellectual property.”

The ten founders of the patent licensing consortium include Alien Technology, Symbol Technologies, Avery Dennison, ThingMagic, Moore Wallace, AWID and Zebra Technologies.

The founders have called on other companies involved in RFID or individuals holding essential patents to join the proposed consortium.

The new body is modeled on the successful structures and practices of existing industry groups that license MPEG and DVD technology usage. It will license patents essential to the manufacture and operation of RFID chips, tags or labels and readers, and all essential IP owned by members would be made available via a single license on fair, reasonable and non-discriminatory terms.

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.

"Regardless of how Intermec's IP issues are resolved," says Michielsen, "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.

One of the outstanding issues, he stresses, 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.

In a research note on the initiative, ABI said: “It is important for the group's credibility that silicon vendors show support publicly.”

"With or without Intermec 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," said Michielsen.

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