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Intermec on the RFID/Wi-Fi Intersection

Intermec, an RFID patent holder at the center of many legal battles, recently took time from its tug-of-war with Symbol Technologies to discuss the future of Wi-Fi. Unlike its competitors in radio tagging and location, Intermec doesn't expect Wi-Fi to become a prominent player.

Throughout our interview with Dan Parks, Intermec’s director of wireless product marketing, and Dan Bodnar, the company's director of product marketing, Wi-Fi was seen as just another data-collection method -- and one more often used for simply transmitting data collected by passive RFID tags.

Most manufacturing floors and retailers using RFID for inventory and product tracking have already migrated their internal networks to Wi-Fi, according to Parks, who adds: "I don’t see it playing a bigger role."

Wi-Fi Transmits RFID Data

Everett, Wash.-based Intermec views Wi-Fi as a transmission technology. Although RFID is used in capturing the data from a tag on a palette or an individual item, Intermec sells Wi-Fi-based readers which send that data back to a customer’s network. The readers are either handheld, stationed at a doorway, or mounted on a forklift, says Parks.

The company sees the future of radio tagging as passive rather than active, and says that Wi-Fi will be used in tags only in expensive, high-ticket items such as pharmaceuticals and clothing.

Competitors such as Ekahau, Pango Networks and others directly employ 802.11-based networks for monitoring smart tags with Wi-Fi chips inside to perform real-time location tracking.

Intermec believes that market is not growing.

One area where Wi-Fi and RFID seem to have similarities is in future interoperability. Bodnar says Intermec is hoping the RFID industry, now split, will come together behind one standard, as the nascent Wi-Fi market did years ago. But that's as far as Intermec sees the two working together.

The Patented Next Generation

While the RFID community has operated under one standard – EPC Generation 1 -- a new standard was ratified in December 2004.

The EPC Generation 2 standard takes a more global stance, enabling radio tags to support data requirements of European markets. Parks expects RFID products based on the new standard to appear later in 2005.

Despite EPCglobal's assurance that the Generation 2 RFID standard is royalty-free, Intermec is offering a "Rapid Start Licensing Program" for vendors that are worried they might infringe on Intermec’s more than 145 RFID patents.

While Intermec contributed five patents to the royalty-free RFID standard, vendors will have to pay for anything beyond basic functionality.

The licensing program, begun June 1 and set to end Aug. 31, is designed both to accelerate the adoption of RFID and to "clearly indicate which manufacturers and vendors are licensed to use Intermec's patented RFID technologies," according to Intermec. Once the offer expires, patent licensing will be available "at higher rates than available through Rapid Start," said Intermec.

Zebra Technologies, an RFID printer company, and hardware maker SAMSys have opted for the licensing arrangement. Terms of the licensing compact are not known. The offer reduces the standard five percent royalty rate for chipmakers to two percent, according to Chris Kelly, Intermec’s RFID business development director, as quoted in Managing Automation.

"Vendors have not yet been acutely affected by Intermec's patent position, because Intermec has been trying to negotiate an agreeable settlement for the industry," says Jeff Woods of Gartner Research. "At the conclusion of this program, if there are substantial nonparticipating vendors, expect Intermec to more aggressively enforce its patents."

Intermec’s use of Wi-Fi has become central to a series of lawsuits filed by rival Symbol, as well as some from Intermec, with both sides claiming violation of various patents. Intermec was first, in June of 2004, suing Matrics, a company later acquired by Symbol. In March of this year, Intermec specifically struck at Symbol over wireless patents, and then in late April, Symbol countersued Intermec, alleging that Intermec infringed on patents covering technology used to decode barcodes. A hearing is set (for the first of five lawsuits) for September 7 in Wilmington, Delaware.

In late June, Symbol announced that it would cut 700 employees and close some facilities after seeing less-than-expected revenue.

Last week, Intermec’s chief financial officer quit. The company is a division of Unova, Inc. .