EPCglobal Ratifies Next-Generation RFID Standard

The Gen 2 spec is royalty-free, but will customers need to pay royalties for RFID products based on the standard?

Several months later than originally planned, EPCglobal Inc. ratified its Generation 2 RFID standard, a move thats expected to usher in a new wave of products for meeting RFID mandates in the second half of 2005. But although use of the standard itself is royalty-free, controversy is stirring over whether customers will need to pay royalties to Intermec Technologies Corp. for some products based on the specification.

Meanwhile, by the end of January 2005, EPCglobal group plans to approach the ISO (Industry Standards Organization) —the other RFID industry standards keeper—about stepping toward standards convergence, according to Michael Meranda, president of EPCglobal U.S.

Customers interested in meeting mandates from Wal-Mart, Target Corp. and the U.S. Department of Defense will be able to comply using either Gen 2 or existing Class 0 and Class 1 RFID readers, tags and scanners, Meranda said in an interview with eWEEK.com. "But were encouraging people to move to Gen 2 when it becomes available," he said.

/zimages/4/28571.gifWal-Mart is relaxing its RFID compliance deadline for its top 100 suppliers. Click here to read more.

Gen 2 readers and scanners will provide twice the performance of first-generation Class 0 and Class 1 RFID products, based on "speed of a read, accuracy of a read, and distance over which a tag can be read," he said.

"TI [Texas Instruments Inc.] has announced plans to support Gen 2 with RFID chips, and they wont be standing alone in the wings for very long," Meranda said.

Users will be able to migrate from first-generation RFID products to Gen 2 by swapping out chips and software, he said.

For its part, TI expects to begin sampling the next-generation chips in the second quarter of 2005, and to step to volume production in the third quarter, said Bill Allen, TIs director of marketing communications.

"Class 0 and Class 1 were development specs," Allen said. "But companies want to utilize a globally acceptable product, [with] support for multiple [UHF] frequencies. Gen 2 takes RFID to the next step."

EPCglobal initially targeted early fall for ratification of the Gen 2 spec. Why the delay? Meranda pointed to two factors.

"We wanted to make sure that our technical steering committee and business steering committee were well-aligned in meeting users requirements from end-to-end," he said.

"We were also able to find out through our lawyers that the standard could be offered royalty-free."

According to Meranda, Intermecs legal counsel has determined over the past few months that intellectual property patented by Intermec is not essential for implementing the Gen 2 standard. But on the other hand, some vendors will choose to implement Gen 2 in ways that violate Intermecs patents, and they will need to negotiate royalty payments with Intermec, Meranda said.

Also last week, Intermec issued a written statement congratulating EPCglobal on passage of the Gen 2 spec. However, Tom Miller, Intermecs president, said in the statement that "the claim of a royalty-free product does not mean UHF RFID products will be royalty-free.

"We believe companies who offer UHF RFID products will still require a license to use Intermec intellectual property," he said.

"Gen 2 products can be built without the use of Intermecs patents. But they wont meet users needs for readers that perform well," an Intermec spokesperson told eWEEK.com.

"If you want unlimited read/write and support for multiple [UHF] frequencies, youll need to use [patented technologies from] Intermec," she said.

/zimages/4/28571.gifClick here to read more about the controversy over RFID patent fees.

RFID customers such as the U.S. Department of Defense are currently supporting RFID standards from both EPCglobal and the ISO. So are many product suppliers and IT vendors.

EPCglobals Meranda said that, for some time now, EPCglobal has wanted to help bring the two standards together by making EPCglobal part of the ISO standards process.

"Weve been committed to that," he said. "So our plan is to take our ratified standard and begin the process with [the ISO] by the end of next month. But their process is fairly long. It can be up to a couple of years. In the mean time, we need to look at how well stay in sync, so that therell only be one RFID standard."

One point currently at issue is how to use an eight-bit code on RFID tags. For Gen 2 to be approved by the ISO, the code might need to be used for an ISO AFI (application family identifier). The current Gen 2 standard, in contrast, allows the code to be used for either AFI or some other method of identifying the source of data on an RFID tag, according to Meranda.

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