Jun 30, 2017The U.S. International Trade Commission (ITC) has ruled in favor of Kapsch TrafficCom North America (Kapsch), STAR Systems International Ltd. (SSI) and other companies with regard to a legal action brought against them by Neology, a Poway, Calif-based subsidiary of SMARTRAC. According to Kapsch and SSI, the judge has ruled that patents brought to trial by Neology are invalid.
Neology has sought to prevent Kapsch (a Vienna, Austria-based provider of intelligent transportation systems in the fields of tolling, traffic management, smart urban mobility, traffic safety and security), SSI (a Hong Kong-based provider of RFID hardware, tag and professional services) and other firms from importing certain electronic tolling products that utilize the ISO/IEC 18000-6C ("6C Standard") communications protocol. The ISO/IEC 18000 international standard describes a set of radio frequency identification technologies, each employing a unique frequency range. Part 6 of the standard covers parameters for air-interface communications in the range of 860 MHz to 960 MHz.
In 2014, Neology filed a lawsuit in a U.S. District Court against Kapsch for what it deemed infringement of its patents, demanding that Kapsch cease manufacturing, using, selling, importing or exporting any infringing RFID products, including systems, subsystems, readers and tags. Kapsch challenged Neology's patents at the U.S. Patent Office, resulting in ongoing litigation that has taken three years to resolve. In 2015, SSI issued a statement opposing Neology's legal claims, noting, "ISO 18000-6C is used within a variety of industries, including retail, transport, logistics, and government, with billions of RFID tags deployed and in use since the standard was released in 2006. No company or other organization has a valid claim of ownership on ISO 18000-6C, or any significant portions thereof."
In January 2016, the ITC ordered that an investigation be instituted against a number of importers of RFID hardware into the United States, including Kapsch and SSI, based on Section 337 of the US Tariff Act of 1930. Neology accused the companies of importing RFID equipment that infringed upon certain Neology patents. SSI and Kapsch rejected the notion, asserting that 6C is an open standard that has been in use since 2005 by numerous industries and organizations, including the U.S. Department of Defense and numerous retail organizations. The recent ITC ruling supports this stance.
"Kapsch will continue to advocate for open-communication and RFID standards," said Chris Murray, Kapsch TrafficCom North America's president and CEO, in a prepared statement. "This is to the good of the consumers and the entire economy as it facilitates national electronic tolling interoperability."
"This is a huge win for the 6C industry as a whole," said Stephen Lockhart, SSI's CTO, in a separate prepared statement. "Invalidating these patents is a strong signal to the market that 6C is truly an open standard protocol."
According to Kapsch, open-standard communication protocols are vital to meeting the goals of 2012's U.S. Moving Ahead for Progress in the 21st Century Act (MAP 21), which mandated a national agreement regarding tolling technologies and business practices in order to allow for interoperability in terms of national electronic tolling. In 2013, Kapsch published its Open Standard Time Division Multiplexing (TDM) specification, which enabled free access to developers looking to implement the spec. E-ZPass Group, the largest interoperable tolling network in the United States, is among those employing the TDM protocol.
Kapsch has maintained that any protocol utilized throughout the industry, such as ISO/IEC 18000-6C, should remain open. "Kapsch is a firm believer in open standards to facilitate national electronic tolling interoperability," Murray said in Kapsch's prepared statement, "and determined that ensuring a truly open ISO 18000-6C standard is critical if it is to play a role in achieving the MAP 21 goals."
"This was a long, difficult and distracting fight for SSI. However, we truly believe in the openness of the ISO 18000 6C standard and that it is worth standing up for," said Bob Karr, SSI's managing director, in STAR Systems' prepared statement. "With this favorable decision," Karr added, "all of us at STAR Systems International are looking forward to putting this behind us and continuing to focus our resources and efforts toward [providing] readers, transponders and professional services to the worldwide tolling and vehicle identification markets."
As a result of this decision, the 6C Standard remains open for use by anyone in the RFID and tolling sectors. Neology, however, may opt to appeal this decision to the ITC.
