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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

In November, Motorola Solutions and Smartrac announced that they had reached settlements with Round Rock (see Motorola Solutions, Smartrac Settle Patent Litigation by Round Rock and What the Round Rock Settlements Mean). And earlier this month, Avery Dennison, Alien Technology and Invengo did the same (see Avery Dennison, Alien Technology and Invengo Sign Licensing Deals With Round Rock). Prior to those settlements, Round Rock had reached agreements independently with Intelleflex and UniLabel ID Service. On May 7, 2013, Checkpoint Systems announced that it, too, had cut a deal.

With each of these agreements, an RFID vendor secures an understanding with Round Rock that customers using its licensed products will not be sued. What's more, Round Rock agrees not to pursue companies if a small percentage of the tags or readers they use come from vendors that lack licensing agreements. "We're taking a risk," Taylor says, by accepting that an end user is making every effort to use only licensed products. "We feel that's the right way to stimulate the industry."

Round Rock objects to being referred to as "patent troll," a term that it says is derogatory and does not take into account the development work that led to the creation of those patents and their legitimate acquisition, as well as the need to pay for those acquisitions and their ongoing patent-maintenance costs.

From this point forward, Taylor says, "Our approach is to monitor who the big players are in the U.S.," and when they may be infringing on Round Rock's patents. "We're not trying to over-charge or collect payments based on threat of lawsuits. Ninety-five percent of the time, we want a license agreement."

Taylor says his company has decided not to pursue licensing agreements from UHF RFID chip manufacturers, such as Impinj, NXP Semiconductors and Alien Technology—though it does hold patents on such chips—because it considers the chips to be already covered by Round Rock's agreement with the companies that use them in manufacturing their tags. "You want to seek a license closest to the end customer," he says, which would be the tag rather than the chip.

In the future, Taylor says, Round Rock's strategy will be to focus on large players rather than small end users. "We're not going to send out letters to get every small retailer" that might be using RFID products that Round Rock believes infringes on a patent, he says. In fact, he adds, the firm is focused not on end users, but rather on companies supplying them with tags. However, Taylor notes, if a major U.S. retailer were to purchase large quantity of merchandise with goods tagged in China, bearing RFID tags from an unlicensed company, the patent firm would expect to reach out to that retailer, to indicate they should make their purchases from a licensed RFID supplier. "That will be an educational process," he says.

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