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Haggling Over RFID Intellectual-Property Rights

Rival groups take sides on whether vendors should be compensated for their contributions to next-generation RFID standards.

A consensus was reached last week by vendors supporting two rival second-generation radio-frequency identification UHF Electronic Product Code standard protocols. Representatives from EPCglobal Inc.'s Hardware Action Group, dubbed Global, and from one dubbed the Freedom group, converged in Chicago earlier this month for two daylong meetings designed to hash out their differences and reach a compromise. A teleconference was held last week, with negotiations ending on a positive note when all parties agreed to collaborate on EPCglobal Gen 2 engineering standards.

The group backing the Global proposal, represented by Intermec Technologies, Philips Semiconductor, Zebra Technologies, and approximately 10 other vendors, and the group backing the Freedom proposal, represented by Alien Technology, Matrics, and others, put their intellectual-property concerns aside for now to focus on engineering protocols and standards.

"We are fast approaching a last call working draft within EPCglobal for Gen 2 standards," says Daniel Engels, the director of research for the Auto-ID Labs at MIT, and a member of the Technical Steering Committee under EPCglobal, a working group attempting to create global standards to track and trace goods. "The major tag manufactures have agreed on a path forward and are close to reaching consensus on the standards. It doesn't mean it will be reached, but it looks inevitable we will have a new Gen 2 protocol in short order."

While Engels declined to provide specifics, Gen 2 standards are expected by October. That should be good news for suppliers attempting to meet 2005 retailer mandates based on EPCglobal standards. But a source close to the negotiations is not as optimistic as Engels, and says incomplete and immature standards could result from releasing them too early.

Potentially complicating matters further is whether both groups will agree on compensation for intellectual-property rights. Just a month prior, few participating in shaping the Gen 2 EPCglobal standards were optimistic the two could bridge the chasm. Compensation for IP still remains the deepest ravine separating the two camps.

Those backing the Global say they believe companies contributing IP to the specification should be compensated. Those backing the Freedom proposal say they would contribute their IP and forgo their royalty fees, in order to encourage quicker RFID-user adoption.

Earlier this month, Intermec Technologies Corp. stirred the pot when the division of UNOVA Inc. filed a patent infringement lawsuit against Matrics at the Federal District Court in Delaware. The complaint relates to Intermec's RFID patents and alleges Matrics' RFID products and systems have infringed on intellectual property owned by Intermec, which is suing for royalties. It isn't clear if reaching a consensus on IP rights within the EPCglobal standards would affect the lawsuit.

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