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Round Rock Completes Licensing Deals With Majority of RFID Vendors

The licensing firm says it now has agreements with at least 90 percent of all EPC tag suppliers to the U.S. market, and will focus its future efforts on educating RFID suppliers and end users, to ensure the patents are honored.
By Claire Swedberg
Dec 19, 2013

With the recent announcement of licensing agreements with SML Group and Nordic ID, and with deals with two additional companies expected to be announced within the coming days, patent-licensing company Round Rock Research reports that it now has settled with at least 90 percent of all EPC RFID tag suppliers that sell their products within the United States, as well as with between 75 and 80 percent of all reader suppliers. "We think this is a positive development and a win-win for the industry," says K. McNeill Taylor Jr., Round Rock's VP of law and its general counsel.

The latest RFID companies to sign agreements with Round Rock are woven and printed label manufacturer SML Group and mobile and fixed RFID reader company Nordic ID. Two other RFID firms have signed agreements as well, according to James Burris, Round Rock's VP of licensing, and will be announcing those deals soon, bringing the total number of licensing agreements to 16.

In December 2011, the patent licensing firm filed lawsuits against Wal-Mart, Macy's, Fruit of the Loom and eight other retailers or consumer product suppliers that it believed were major users of EPC ultrahigh-frequency (UHF) RFID tags and readers. Round Rock owns approximately 4,000 patents that it obtained from Micron Technologies, dating from the 1990s to the early 2000s. Of those patents, it says, 290 are related to RFID chips, tags and readers, or to techniques for using EPC tags. Micron developed the technology behind those patents, but ultimately chose to sell the patents to Round Rock when it opted not to pursue the manufacturing of the products. "Micron's expertise is in products, not in recouping its [patent-based] investment," Taylor states. Taylor argues that the cost of making maintenance payments (fees charged by the U.S. Patent Office to maintain a patent) then fell on Round Rock, and the licensing company went about seeking licensing agreements. Round Rock identified companies that it felt were infringing on some of the 290 patents, through reverse engineering and viewing companies' literature (the lawsuits involved only 10 of those patents). He says the firm filed its claims in 2012 when it found evidence of such infringement, in order to ensure that those claims were made before any patents expired. Round Rock targeted the customers rather than the vendors themselves, since the customers were the technology's users, and believed that those customers would, in turn, approach the vendors to urge a resolution of any patent-infringement claims.

While the company owns 290 U.S. patents based on RFID technology, it does not own patents in Europe. That is not due to the stringent rules about patent ownership on that continent, Taylor notes, but because Micron never pursued European patents due to the cost involved. Each patent can cost approximately $25,000, he says, and Micron considered it too cost-prohibitive to file for patents in multiple countries outside of the United States.

In March 2012, Motorola Solutions filed a countersuit against Round Rock. According to Motorola's complaint, the company had been asked to defend the retailers being sued because it had indemnified them in contracts signed when the retailers purchased its RFID technology. In April of this year, a U.S. district judge suspended the proceeding pending a reexamination of Rock Rock's patents (see Update on the Round Rock Patent-Infringement Lawsuit). To date, Taylor says, approximately half of the patents have been reviewed.

In the meantime, Taylor says, Round Rock met with several RFID technology vendors. "We got together and worked out a minimum we could [accept] that would allow us to recoup our investment," he explains, while at the same time, the RFID companies determined what the market could sustain, in terms of any additional cost to cover licensing fees. He did not indicate the amount of the fees, but indicates that once the first licensing agreement was struck, the same rate has since been applied to each subsequent deal.

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