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  - March 10, 2005 -  
Intermec, EPC Global, Change Course on Intellectual Property Rights  

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As we wrote about late last year in these pages, there have been some skirmishes between Intermec and other RFID vendors (notable Symbol/Matrics) and EPCglobal about intellectual property rights related to RFID technology.

An agreement had been worked out between Intermec and EPCglobal, under which Intermec was to donate 5 of its patents to the group it believed were critical to Gen2 on a royalty-free basis. It also agreed to license an additional 13 patents on a reasonable and non-discriminatory (RAND) basis to enable EPC's Gen2 UHF specification to go forward – meaning anyone could use the patented technology, and only modest royalties would be required.

Recently, However, EPCglobal's law firm has come to the opinion that none of Intermec's IP is actually necessary for Gen2 compliance. Intermec responded by withdrawing its patent agreement with EPCglobal.

As an article on the AIM Global web site says (linked to above): “Intermec had originally agreed to the policy because it believed its IP was potentially necessary for successful Gen2 implementation. However, if, as EPCglobal's law firm insists, none of Intermec's IP is essential for Gen2 compliance, there is no reason for Intermec to agree with EPC's RAND policy on these 13 patents.”

But, as always, the issue is complicated. While it may be possible to implement the critical Gen2 UHF standards without Intermec IP, those patents include technology related to use of “frequency hopping spread spectrum” in RFID system deployment, which is perhaps necessary for the technology to work well in “noisy” environments. Further, the Intermec IP in question does not apply only to the Gen2 standards, but previous standards (class 0 and 1) and RFID technology generally.

Intermec, however, says it will continue to support ISO standards development, which takes a different approach to handling IP. Further, Intermec will now be able to license its technology and patents on a case-by-case basis with specific vendors – which could have significant implications both on those vendors costs as well as which vendors Intermec will choose to work with.

So what’s the upshot? According to AIM Global: “In the short term, it clearly benefits Intermec because it removes EPC's RAND restrictions. It may also cause some hesitation on the part of customers because of potential exposure to infringement suits. It will also require more negotiating sessions between Intermec and other RFID suppliers. In the long term, however, it is unlikely to affect the eventual adoption and cost of Gen2 systems.”

A lot more to come. We view this as yet another example of how immature the entire RFID/EPC ecosystem really is, and that those aggressively pushing widespread adoption aggressively would do well to consider this reality.

What do you think of Intermec’s decision to drop its IP agreement with EPCglobal? How critical is this technology to “successful” deployment of Gen2 EPC? What does this say on the state of EPC maturity?