For months, two of the biggest players in RFID have launched lawsuits at each other claiming patent infringement. Yesterday, Intermec Technologies Corp. and Symbol Technologies Inc. issued a joint statement announcing they've reached an agreement to resolve their ongoing RFID dispute.
The squabbling dates back to June 2004 when Intermec filed suit against Matrics Corp., now owned by Symbol, claiming RFID patent infringement. Relations between the two companies became outright nasty earlier this year when Symbol counter sued, charging Intermec with infringement of its 802.11 patents. The battle continued this past July when the U.S. International Trade Commission began investigating allegations that Symbol violated U.S. trade practices by importing handheld mobile computing devices and components that infringe on Intermec patents.
The cease-fire announced today pertains only to RFID, however, company officials noted that all other litigation for other technology categories ranging from Wi-Fi, laser, MEMS, software management and Internet-based communication will be put on hold for a 90-day period. The goal, say officials, is to resolve those disputes as well.
"In our view it was impractical to sort everything out in one negotiation," said Peter Lieb, Symbol's senior vice president and general counsel in an interview with Managing Automation. "There are a lot of patents ... we need to sit down and discuss them all to come up with a fair compromise."
According to Intermec President Tom Miller, the company is onboard to resolve all outstanding litigation. "These are comprehensive and complex IP portfolios. Both [companies] are committed to a process that focuses on resolving all IP issues," he said, in an e-mail interview.
Lieb said the settlement is comprised of a cross-licensing agreement. While terms of the deal were not disclosed, Intermec disclosed that Symbol is now an authorized licensee of portions of Intermec's 145-plus RFID patents under the company's Rapid Start Licensing Program. The program, which concluded August 31, provided incentives, such as reduced origination fees as well as terms and rates that reportedly will not be repeated.
Symbol is also part of a 20-company consortium RFID industry patent licensing consortium that is working on a structured approach for holders of essential RFID patents to receive fair compensation for their intellectual property (IP) at a reasonable cost to the end-user. Intermec is not currently a member, a patent-pooling approach is essential to the evolution of RFID, members contend.
"In any situation where there's a technology that has a lot of patents, the only way a market can really get started is if there is a sensible, scalable approach to licensing," said Kevin Ashton, vice president of ThingMagic, a maker of RFID readers which is a member of the RFID consortium.
It's okay that not every RFID vendor is participating, Ashton noted, but the lack of uniformity could inhibit market growth. For example, as a result of the Intermec/Symbol agreement, "more and more patent holders will look at this and see it as an appropriate time to declare IP and ask for royalties. If the RFID market doesn't have a mechanism to deal with that, it will collapse."
Still, industry analysts see the Intermec/Symbol truce as a step in the right direction.
"It removes the specter of IP litigation slowing down the adoption of next generation technology," said Dennis Gaughan, research director at AMR Research. "It's good for the industry for these companies to get over their squabbles and move on to solving customer problems ... this goes a long way to resolving one of the barriers to broader RFID adoption."
That's one of the primary reasons behind Symbol's decision to settle the dispute, company officials said. "When we sell product to a customer they can feel comfortable it is backed by the strongest portfolio of IP and licensing available," said Lieb. "They can focus on the merit of the products as opposed to the risk of someone saying [the company] can't make the product anymore."