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Patent Suit Roils RFID Standards Groups

RFID vendor Intermec is suing rival Matrics for patent infringement, in a case that could impact which emerging protocols are deployed with the technology.

The Everett, Wash.-based Intermec, owned by UNOVA, said Matrics' products infringe on four patents awarded before Matrics was founded.

Both Intermec and Matrics, a Rockville, Md. company, make radio frequency identification (RFID) tags and readers that automatically send and receive low-frequency signals containing small amounts of data. RFID systems can be used to track goods and machinery as they move from one location to the next. Unlike barcodes, RFID automatic data collection typically does not require line of sight or manual scanning.

One of the Intermec patents in litigation covers a method of identifying from which of several tags a particular data stream is coming; one covers synchronizing a chip by the frequency of its base station modulation; one covers a method of communicating with RF transponders; and a fourth covers producing the radio frequency circuit and memory in a thin flexible package.

The lawsuit comes just as a new RFID standard is being developed. EPCglobal, a not-for-profit standards organization, is developing a universal electronic product code system and a global network to enable real-time, automatic identification of items in the supply chain. For the past few months, the Hardware Action Group, a working group within EPCglobal, has been considering two competing proposals for a new protocol, UHF Generation 2.

One Gen-2 proposal comes from the Unify Group, a consortium led by Intermec and Royal Philips Electronics. The competing proposal was put forth by the Freedom Group, let by chipmaker Alien Technologies and Matrics.

The Class 1 Generation 2 technology, also called C1G2 or Gen-2, would let RFID tags and readers working in the UHF frequency range interoperate. UHF is the frequency most commonly used for case- and pallet-level tracking. Major purchasers such as Wal-Mart and the U.S. Department of Defense have asked their suppliers to begin using RFID by January 1, 2005.

But two different protocols, Class 0 and Class 1, are now in use, while Matrics has added proprietary enhancements to its chips to offer read/write functionality, dubbing them Class 0+. The protocols are incompatible, so that a reader using Class 0 technology can't read a chip made with Class 1 technology, for example. Gen-2 will be backwards compatible with both Class 0 and Class 1, so that a Gen-2 reader will be able to read both kinds of chips and a Gen-2 chip can be read by both of the older readers.

EPCglobal's "hardware action group" plans to deliver a last-call working draft of the standard by the end of June. They may choose one or the other of the proposals or merge elements of the two. A spokesperson for the group said that both proposals meet all the end-user requirements in the RFP and that all members of the group have declared whether they have intellectual property that's part of the proposal.

According to Intermec, Matrics' Class 0, 0+ and Class 1 implementations all infringe at least one of these patents. Matrics executives did not respond to requests for comment.

Mike Wills, vice president and general manager for Intermec's RFID line of business, denied that the lawsuit was influenced by the standards deliberations. "If we didn't have a standards organization like EPCglobal, we would still most likely be going forward with this action, because of our belief that there is infringement with our core patents," he said. "It just so happens to also find its way into some of the fundamental standards of passive RFID applications."

Intermec instituted a formal licensing program in the beginning of 2003. "Even before the proclamations from Wal-Mart and the Department of Defense, we saw the fact that we needed to assemble a formal licensing program," Wills said. Intermec has about a dozen licensees so far, and Wills expects that number to double in the next few months. He wouldn't comment on whether the company has any more suits in progress.

Intermec has developed a series of IP license portfolios to suit different kinds of companies so they don't have to sort through the patents. "Wherever they decide to practice, we have a portfolio available that fits their business model. If they want to assemble tags, or just manufacture readers, we have a portfolio for them," he said. "We want to make this simple."

Donny V. Lee, chairman & CEO of Applied Wireless Identifications Group (AWID), an RFID component and sub-system supplier based in Monsey, N.Y., said that incorporating companies' IP into a standard isn't necessarily a bad thing. In fact, he said, sometimes it's better, because the IP owner would likely be willing to donate some of the IP at no cost and license the rest at favorable terms. "When you're in the group, it's easier to work it out." AWID is a member group proposing the Unity spec, a group which includes Intermec, but Lee emphasized he was speaking only for his own company.

Lee was nonchalant about the patent issue, saying it's almost impossible for a standards group to incorporate IP with no strings attached. "If someone spent millions and millions to develop it," he said, "you can't exactly say they have to put it in the public domain."