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.”

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