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 organisation that helped create the protocol, expects to finalise 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 labour costs and handle inventory more efficiently.
Observers say Intermec's 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 the Massachusetts Institute of Technology. -It was a major concern and a major distraction to the process."
Engels is research director of MIT's Auto-ID Lab, an RFID research centre 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 commercialise 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 recognise any compliant tag, regardless of who makes them.
4%
1%
Yet more technology ruined by patents...
Yay for all the pro-patent schmucks!