Vendors Form RFID Consortium

The group's goals are to offer an efficient patent system and to provide access to radio-frequency identification patents for manufacturers and users.

A group of 20 companies that develop RFID-based products—chips, tags, labels and readers—announced an intellectual property licensing consortium Tuesday to ease the pain that is becoming increasingly associated with both hardware and software development.

The goal of the group is twofold: to offer an efficient patent management system for those companies applying for an RFID (radio-frequency identification)-based patent; and to provide access to RFID patents for manufacturers and users.

Despite having been around for about the past 50 years with little fanfare, RFID technology has recently proliferated—and gotten a lot of media attention—with mandates from the likes of Wal-Mart Stores Inc., the Department of Defense and the Department of Homeland Security that require suppliers to tag their goods with RFID-enabled labels.

"Because of [proliferation], the number of patents and patent holders that may be necessary to RFID product has made for a complex situation," said Stan Drobac, vice president of RFID strategy and planning at Avery Dennison Corp. and the consortiums spokesman, during a conference call Tuesday with press and analysts.

"Its being referred to as a patent thicket—interlocking patents that can block participants from making products that are useful to consumers."

The group, dubbed the RFID Consortium, will base its work on the standards and specifications put out by EPCglobal, which develops standards for Electronic Product codes and RFID technology.

It will also take into account those standards put out by the ISO [International Standards Organization], a counterpart to EPCglobal.

The consortium is proposing a license agreement whereby all patents owned by members will be pooled and available to interested companies via a single license at a "fair and reasonable" price.

The license model is based on those already in place with DVD formatting and MPG-2 video decoding technology vendors that also pool patents—and hire an independent party to distribute license fees.

The RFID Consortium member roster reads like a Whos Who list in the tag and reader world: Alien Technology Corp., Applied Wireless Identification Group Inc., Avery Dennison Corp., Moore Wallace, an RR Donnelley Co., Symbol Technologies Inc., ThingMagic Inc., Tyco Fire & Security, and Zebra Technology Corp.

There is one notable exception to the consortium: Intermec Technologies.

/zimages/1/28571.gifClick here to read more about SAP AG forming an RFID alliance with Intermec.

The RFID hardware and software manufacturer has been at odds with other technology companies over its Rapid Start program, which tightly controls licensing around its 145 patents that, in many cases, address core functionality—particularly with respect to EPCglobals Gen2 standard for RFID readers.

However, Intermecs absence from the consortium will not hinder its effectiveness in terms of pooling licenses, according to ABI Research analyst Erik Michielsen.

"Regardless of how Intermecs IP issues are resolved, there are dozens of other IP holders in the market that are looking to profit from EPC Gen2 licensing," said Michielsen, in a report. "Because of the number and disparity of such patents, the industry—in the absence of a process like the one now beginning—would be heading for stagnation and quagmire."

Also missing from the consortium are silicon manufacturers the likes of Texas Instruments Inc. and Philips.

The consortiums Drobac said the group is in talks with many organizations that would have an impact on RFID—both technology providers and end users—and that not all of the companies involved in the consortium have gone public with the announcement.

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