[Top][All Lists]
[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
[DMCA-Activists] SW Patent Static over RFID
From: |
Seth Johnson |
Subject: |
[DMCA-Activists] SW Patent Static over RFID |
Date: |
Mon, 13 Sep 2004 20:03:28 -0400 |
-------- Original Message --------
Subject: [IP] Static over RFID
Date: Mon, 13 Sep 2004 19:37:41 -0400
From: David Farber <address@hidden>
To: Ip <address@hidden>
Begin forwarded message:
From: Dewayne Hendricks <address@hidden>
Date: September 13, 2004 8:48:36 AM EDT
To: Dewayne-Net Technology List <address@hidden>
Subject: [Dewayne-Net] Static over RFID
Reply-To: address@hidden
Static over RFID
By Alorie Gilbert
Staff Writer, CNET News.com
<http://news.com.com/2100-1008-5357189.html>
Story last modified September 13, 2004, 4:00 AM PDT
A key patent holder's demand for royalties has triggered
concerns that promising RFID technology could become embroiled in
an intellectual property battle.
What's new:
Intermec, which holds significant RFID patents, has demanded
royalties from companies using a new interoperability protocol,
raising fears that other firms could follow suit.
Bottom line:
RFID supporters fear that the technology could become embroiled
in an intellectual property battle, driving up prices and
slowing implementations, if other patent holders come forward to
demand royalties.
The royalty flap stems from a new protocol, the Electronic
Product Code Generation 2 standard, designed to improve the
compatibility of radio-frequency identification (RFID) equipment
from different suppliers and iron out a number of other
technical kinks.
The protocol is likely to contain certain patented technology
from RFID equipment maker Intermec Technologies. The Everett,
Wash., company recently demanded royalties for the use of the
patents, and is suing Matrics, a rival, for allegedly infringing
on some of them. The patent infringement suit, filed in June, is
pending. No schedule has been set for the trial.
The patent claim comes on the eve of a new protocol's debut.
EPC Global, the organization that helped create the protocol,
expects to finalize it at an Oct. 5 meeting. Now, some RFID
backers fear other patent holders could come forward and demand
royalties, slowing RFID's progress.
Major companies, including Albertsons, Procter & Gamble,
Wal-Mart Stores and German retailer Metro, have already begun to
set up RFID systems and are eagerly awaiting the release of the
new protocol to advance their projects. They expect RFID, a
wireless tracking technology that may someday replace bar codes,
to help them reduce theft, shave labor costs and handle
inventory more efficiently.
Observers say Intermecs move was an abrupt departure from an
ultra-cooperative standards building effort, in which many
participants had agreed to donate key intellectual property. The
company holds the bulk of the most significant RFID patents.
Suing Matrics in the heat of setting the Generation 2 standard
was not conducive to bringing all sides together, said Daniel
Engels, a researcher at Massachusetts Institute of Technology.
It was a major concern and a major distraction to the process.
Engels is research director of MITs Auto-ID Lab, an RFID
research center that led early development of the technology and
envisioned a royalty-free standard. The university handed off
the standards baton last year to EPC Global, an arm of the
Uniform Code Council, keeper of the bar code.
EPC Global is now leading the effort to devise standards and
commercialize the technology, which works by placing special
microchips--RFID tags--on merchandise. The tags signal their
location across a network of RFID readers placed on shipping
docks, in warehouses and stores, allowing retailers and
manufacturers to monitor products on their paths from factory to
store shelf, and possibly beyond.
Lingua non franca The Generation 2 standard should resolve
some lingering glitches in the system and is critical to
advancing the technology beyond the trial stage, experts say.
The main problem is hardware interoperability. Today, a
hodgepodge of competing protocols governs wireless communication
between RFID tags and readers. Adhering to a common protocol
will enable any compliant RFID reader to recognize any compliant
tag, regardless of who makes them.
Some makers of RFID readers, such as ThingMagic in Cambridge,
Mass., have tackled the compatibility problem by designing
readers that can be programmed to work with all kinds of tags.
The only drawback is that users need to upgrade their readers'
software whenever a new type of tag is introduced.
The standard is supposed to work better across international
borders, addressing the fact that the ultra-high-frequency
spectrum on which RFID operates varies in range from country to
country. It's also designed to be less vulnerable to signal
interference and to support larger-scale projects that involve
tagging millions of everyday objects, such as razors and
sweaters.
But Engles and others fear that a standard that calls for the
collection of royalties by one player will invite other RFID
patent holders to demand fees, which could drive up prices and
sap budding demand. In such a scenario, soaring license fees
could cause RFID equipment makers, including Alien Technologies,
Matrics, Texas Instruments and Philips Semiconductor, to pass
the extra costs along to customers.
Executives at Intermec defend the royalty program, saying most
popular technology--including cell phones, laptops and bar
codes--were brought to market through the licensing of
intellectual property among suppliers. "You can't pick up a
product today that doesn't have some sort of cross-licensing
that takes place," Intermec President Tom Miller said. "It's how
you make innovation happen."
Additionally, Intermec has donated technology covered by five
of its RFID patents on a royalty-free basis--more than any other
participant in the standards-building effort, Miller said.
So far, few RFID equipment suppliers or buyers are panicking
over the prospect of royalties. A spokesman for razor maker
Gillette said his company expects the cost of royalties to be
negligible--unlikely to drive up prices of RFID tags and
readers. Gillette, a supplier to Wal-Mart that's participating
in the retailer's RFID implementation, has "no concerns" about
other patent holders making royalty claims, spokesman Paul Fox
said.
Likewise, an EPC Global executive cast Intermec's patent
declaration as a normal part of any standards building process
and nothing that should hinder the technology's development. The
group is also exploring a workaround as an alternative to the
patented technology, which would let suppliers dodge royalties,
said Sue Hutchinson, EPC Global product manager.
Even an executive at Texas Instruments, whose bottom line is at
stake, said the prospect of paying royalties is not a big
concern at the moment. However, the electronics giant has much
deeper pockets and more change to spare than smaller players,
such as venture-backed Alien Technology, which declined to
comment for this story.
"I don't think it's unusual, and I don't think it's going to
be catastrophic," Texas Instruments spokesman Bill Allen said of
the patent claims. "This is just a process that industries go
through."
Sticker shock Nevertheless, Intermec's royalty program, which
levies 5 percent to 7.5 percent fees on various RFID hardware
components, highlights a difficult balancing act for RFID patent
holders--something Intermec's own Miller calls a "conundrum."
One the one hand, patent holders want to profit from their
development work. On the other, they don't want to sap the
demand for the technology with excessive fees.
A pile-on by other patent holders could double the costs of
RFID tags and related equipment, according to MIT's Engels.
About 30 other companies and individuals, including Lucent
Technologies and Micron Technology, hold important RFID patents,
though some expire soon, he said.
Although it's a worst-case scenario, a doubling of price would
be a major blow to the industry, which has been marching toward
a 5 cent tag as a prerequisite for introducing more advanced
RFID features, such as those to combat shoplifting and
counterfeiting. Those features require the tagging of millions
of individual items rather today's more common practice of
placing tags on shipping cases, which requires far fewer tags.
Today, tags sell for 20 cents to 45 cents each, depending on the
volume of the order.
"We're seeing a downward trend in prices, and that's one of
things driving adoption," said Jeff Richards, president and
chief executive of R4 Global Solutions, an RFID consulting firm
in San Francisco. "Anything that adds cost into the equation
could impact that progress."
Yet even the royalty-wary say Intermec and others are unlikely
to do anything to compromise the growth of a budding industry
that's set to line their own coffers. To be sure, a lot of cash
is at stake. U.S. retailers will ratchet up spending on RFID
equipment from $91.5 million last year to nearly $1.3 billion in
2008, according to market research firm IDC. Outlays on RFID
hardware alone are projected to total $875 million in 2007.
"Everyone wants to see this technology move forward," Richards
said. "I don't think you're going to see a major revolt in which
everyone takes their toys home."
Archives at: <http://Wireless.Com/Dewayne-Net>
Weblog at: <http://weblog.warpspeed.com>
-------------------------------------
Archives at:
http://www.interesting-people.org/archives/interesting-people/
[Prev in Thread] |
Current Thread |
[Next in Thread] |
- [DMCA-Activists] SW Patent Static over RFID,
Seth Johnson <=