Jun 28, 2004Some of the 300 manufacturers attending a meeting of Wal-Mart suppliers just outside of Bentonville, Ark., earlier this month, said privately that they would fulfill the retailer’s tagging requirements but had no plans to deploy EPC technology internally until EPCglobal established a standard for the way tags and readers communicate (the “air interface”). Some attendees also expressed concern over the news that Intermec, which supported the Global proposal for the
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Gen 2 standard was suing Matrics, a vendor supporting the rival Freedom proposal. Because Matrics helped to develop the EPC Class 0 standard and put its intellectual property into the Freedom proposal, end users face the possibility of also being sued if they deploy technology based on Matrics IP.
Two weeks later, the standards picture looks a whole lot clearer. The RFID vendors supporting one of the two proposed standards for the Gen 2 air interface have agreed to a compromise. Now, EPCglobal’s Hardware Action Group, which negotiated the compromise, can take the next step necessary before the standard can be finalized: creating a "last call working draft"—a detailed document about the specification—for end users and other vendors to comment on (see Consensus Reached on EPC Gen 2).
This is most welcome news. Independent experts who had seen both proposals told me privately that the two proposed air interfaces were technically similar and either one would make a good standard. But I feared that the standards process would drag on, as often happens, and that momentum in the marketplace would be lost. EPCglobal has received a lot of criticism of late on a variety of fronts, but it clearly deserves credit for bringing the vendors together and achieving a compromise. Sue Hutchinson, EPCglobal's product manager and the person facilitating the Hardware Action Group meetings, in particular deserves credit for the hard work she did to achieve a compromise. And all of the vendors involved should be applauded for giving ground to make sure that the industry can move forward.
Now hardware manufacturers can develop RFID tags and readers based on the consensus protocol. The details of the protocol might change slightly, as EPCglobal collects comments and does further evaluation of the proposed standard. But the last call working draft is close enough to a final specification that design work can begin. The playing field is now level, and vendors will compete based on speed to market, quality of their products and after-sales service.
There is still the question of the Intermec lawsuit (see Intermec Sues Matrics). It's not clear how the consensus will affect the suit. (Intermec declined to discuss the issue when I called the company last week. The consensus was less than 24 hours old when RFID Journal broke the story, and no doubt, the company's legal team needed time to examine the implications.)
I don't believe the suit will be a big obstacle toward adoption. EPCglobal's intellectual property agreement, which all subscribers must sign, says that intellectual property created before a company joined EPCglobal is protected. If a company’s patented technology is needed for a standard, the company can contribute it on a royalty free, cross-licensing or reasonable and non-discriminatory bases, or RAND. (RAND is how most standards work. It basically says companies can't set exorbitant fees or choose who can and can't use the intellectual property.) Intermec has signed this agreement (see /article/articleview/789/1/1/ Intermec Inks EPCglobal's IP Accord>).
It's possible that EPCglobal will examine what proprietary intellectual property was contributed to the Gen 2 specification and determine that Intermec, which has one of the largest RFID patent portfolio, has contributed intellectual property and that it should be compensated. Since Matrics will create products based on the spec, it would pay Intermec a licensing fee along with all other vendors creating tags and readers based on the spec. EPCglobal may determine that Intermec didn't contribute any IP. In that case, no one would have to pay Intermec a licensing fee. Intermec could, of course, challenge that determination in court. Doing so would create uncertainty around the proposed Gen 2 standard, but it shouldn't affect end users, because the issue is whether technology providers have to compensate Intermec for its intellectual property.
So end users also have a clear path forward. Companies can plan their deployments, knowing that they will be able to migrate from Class 0 or Class 1 EPC standard to the Gen 2 standard when product becomes available. Some companies, no doubt, will look to move forward quickly. Others will look for other excuses to delay the inevitable.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.
