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Update on the Round Rock Patent-Infringement Lawsuit
Little progress has been made in the courts, but some RFID providers and end users are taking steps to deal with the issue so they can deploy EPC technology.
Jun 17, 2013—
As we reported last year, a patent-licensing company called Round Rock Research is suing end users of RFID technology, including American Apparel, Dole Food, Fruit of the Loom, Hanesbrands, JCPenney, Macy's, PepsiCo, Gap, VF Corp. and Walmart, for infringing on 10 U.S. patents relating to the use of ultrahigh-frequency RFID. On Apr. 5 of this year, the attorneys for Round Rock and all the companies being sued submitted a Joint Status Report to the U.S. District Court for the District of Delaware.
The status report reveals little new information. The judge suspended the legal proceedings pending a reexamination by the U.S. Patent and Trademark Office (USPTO) of 10 patents held by Round Rock and requested a status report every six months. The USPTO has finished reviewing four of the 10 patents and declared them valid. This does not mean anyone infringed those patents. It simply means there was no "prior art"—no existing invention—that would render those patents invalid.
The status report says, "In view of the continued reexamination proceedings for the remaining six patents-in-suit, the parties do not request lifting the stay at this time. Round Rock reserves its right, however, to request lifting the stay upon further completion of the reexamination proceedings." The next status report is due Oct. 4, though it is not clear when the USPTO will complete its review of the remaining six patents.
Meanwhile, leading providers of RFID technology are taking steps to address the issue. Checkpoint Systems has signed an agreement with Round Rock to license the patents. The terms of the agreement have not been disclosed, but sources say if a company purchases hardware and software through Checkpoint, Round Rock Research will not sue them for patent infringement. IBM is covered under the terms of a previous settlement with Round Rock.
In the short term, the deal gives Checkpoint a competitive edge with retailers seeking to take advantage of item-level RFID. According to one observer, within three months the other major companies focused on selling RFID systems to retailers will be forced to settle.
Checkpoint's decision to settle with Round Rock could pressure other companies to do likewise, but Avery Dennison, Impinj, Motorola and several other RFID providers have teamed up to fight the Round Rock lawsuit. The companies declined to discuss their legal strategy, but a patent consultant says it's likely they are aggressively researching prior art to try to invalidate the patents. "I'm sure they have some very smart people working on this," the consultant says. "And they have the advantage that they know the technology inside and out, so if there is prior art, they will likely find it."
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