For manufacturers that want their products to contain features beyond the minimum, they'll have to negotiate a licensing agreement with Intermec. "We will structure licensing agreements that are tailored to individual company needs, which will allow them to differentiate their products," says Mike Wills, VP and general manager for RFID at Intermec. "Instead of a level playing field where everyone is treated the same," it gives licensees a competitive advantage, he says.
EPCglobal's position on the new Gen 2 specifications is that equipment should be based on royalty-free standards. Companies could manufacture tags and readers that conform to Gen 2 specifications without its intellectual property, Intermec says, but the equipment wouldn't meet the performance requirements of businesses such as consumer-goods companies and retailers. More than a dozen companies have licensed RFID intellectual property from Intermec, Wills says.
Intellectual-property licensing will no doubt augment Intermec's annual revenue, but its business model is firmly entrenched in being a provider of everything from services to equipment to intellectual property, Wills says. "Is it possible that our royalty income from [intellectual property] will surpass our product and service sales?" he says. "Possibly. That's a nice problem to have.