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CEO Interview: New Intermec Licensing Brings Closure

RFID Update spoke with president and CEO Tom Miller today about Intermec's hopes and expectations for what is called the RFID Rapid Start Licensing Program.
May 10, 2005This article was originally published by RFID Update.

May 10, 2005—Last week Everett, Washington-based Intermec announced a new program aimed at making the licensing of its patent portfolio temporarily simpler and more affordable. RFID Update spoke with President Tom Miller today about Intermec's hopes and expectations for what is called the RFID Rapid Start Licensing Program.

Miller noted one of the primary goals of the program is to eradicate the industry's confusion surrounding Intermec intellectual property. "The confusion is what's killed it," said Miller, referring to the concern among would-be end users that by purchasing RFID they might expose themselves to lawsuits from Intermec. On the contrary, noted Miller. The new program is really targeted at hardware manufacturers, and he expects that after August 31st (the closing date of the program's availability), it will be clear to end users and vendors alike which companies chose to license from Intermec and which did not. At that point, "there will closure to this process."

In formulating "Rapid Start", Intermec has tried to make it clear to vendors that the program's appealing features are available only for a limited time. "We are taking our IP, making it available, and giving companies an incentive to sign up." After the program ends, those incentives go away. Companies will be limited to the RAND declaration, which includes about 15 patents with rates of 5% on tags and chips and 7.5% on readers, with no incentives for cross-licensing, and a $1 million up front payment. "Essentially," says Miller, "they will get less but pay more." Furthermore, under the new program, Intermec's entire portfolio of 140+ patents related to RFID are divided up and offered under four groupings according to their associated technology: chips; tags and smart labels; fixed readers and printers; and mobile and forklift solutions. After the program, the licensing of each individual patent will have to be negotiated, thereby causing an incremental cost structure.

When asked whether the recent legal wranglings with Symbol played a role in the timing or development of the program, Miller said no. It does not target Symbol, Miller said, though the company is certainly not excluded. "If Symbol were to apply to the program, if they wanted to sign up, we'd sign them up." He doubted they would, however.

Intermec's Rapid Start program is an effort by the company to stimulate industry progress while protecting its own IP. Miller commented a number of times that his vision is for key RFID suppliers to sign up for the program under equal terms -- "on a level playing field" -- and to then move forward and create a competitive marketplace that will benefit everyone. But his tone remains resolute with respect to his company's IP. "At the end of the day, this intellectual property is our asset. We paid for it, we developed it, we own it."

More about the new program here
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