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SCDigest editorial staff

Intermec announced late last week that it was launching a temporary program to license 145 of its RFID-related patents on what it considers “attractive rates.” The move is designed to help jump start an RFID market that is perceived to be clouded in part by the intellectual property claims Intermec has made.

Intermec’s program, which it says will run between June 1 and Aug. 31, 2005, allows other RFID vendors to license Intermec’s RFID patents, which it has broken into four families of related technology. Costs for the licensing are said to include a nominal initial fee and royalty fees of 2.5 to 7.5 percent, percentages that could be lowered for companies who cross-license their IP back to Intermec. The company claims these rates are “more favorable than traditional automatic data collection industry licensing programs.”

The move comes as an outgrowth of Intermec’s suit against Symbol Technologies/Matrics alleging RFID patent infringement, Symbol’s counter suit alleging infringement of various wireless patents, and confusion over whether EPC Global’s EPC Gen 2 standard is free of intellectual property issues. Intermec disputed EPC Global’s claim, and stated its intent to enforce its patents in this area.

Some believe these legal issues have been a barrier to vendor technology development, and made end users reluctant to purchase technology that may be subject to these disputes, even though Intermec has stated it would not sue end users over purchase of disputed technologies.

Intermec’s press release quotes Gartner analyst Jeff Woods as saying: “Gartner advises our user clients to factor royalties for Generation 2 RFID equipment and tags into their business cases even though they will not directly pay them.” Efforts to avoid the royalties have only served to distract users and delay experimentation with the technology. Every step that the vendors and standards community can take toward clarification and simplification of intellectual property issues around RFID will accelerate rollouts of this important technology.”

Will Intermec’s program have any effect on RFID progress and market adoption? Do you believe these issues are a factor in slowing the pace of deployment? Let us know your thoughts.