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Gartner: Intermec's Program to Accelerate IP Issues

Research firm Gartner this week released an assessment of the Rapid Start Licensing Program from Intermec Technologies, which began June 1st and will conclude the 31st of August.
Tags: Standards
Jun 10, 2005This article was originally published by RFID Update.

June 10, 2005—Research firm Gartner this week released an assessment of the Rapid Start Licensing Program from Intermec Technologies, which began June 1st and will conclude the 31st of August. The program, announced in early May, was devised by Intermec to make the license of its expansive portfolio of 145+ RFID-related patents temporarily simpler and more affordable. According to Gartner, the program will "accelerate resolution of intellectual-property issues surrounding passive ultra-high frequency RFID," an assertion wholly consistent with what Intermec President Tom Miller told RFID Update upon the program's launch. "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 intends for it to be clear to end users and vendors alike after August 31st which companies chose to license from Intermec and which did not. At that point, "there will closure to this process."

Gartner lists three reasons that RFID vendors might not want to sign up to the Rapid Start Licensing Program. The first is simply if one does not believe that Intermec's patents are valid. Given that IBM authored a large chunk of the patents in question (which were then bought by Intermec in the nineties), this scenario is not considered a likely one, SAMSys CEO Cliff Horwitz told RFID Update in an interview last week regarding his company's decision to join Intermec's program. IBM is renowned for producing strong, defensible patents.

The second reason Gartner offers for choosing not to join the Rapid Start program is if a company foresees an industry-wide "boycott" of Intermec's IP stance that actually causes Intermec to stand-down and not enforce its patents. This is not likely. Intermec has been very assertive in its intent to charge royalties for its RFID intellectual property, even in the face of strong, vocal industry pushback that includes lawsuits from its archrival Symbol Technologies. Analysts of the company argue that its future is hung on RFID, and for it not to pursue this strategy of monetizing its costly IP portfolio would be devastating.

The final reason to avoid the program, according to Gartner, would be because a vendor believes it can get better terms from Intermec than those outlined in the program. Such a situation probably only applies to a small handful of powerful technology companies that already know who they are. If it is not immediately obvious to a vendor that it can offer something very attractive to Intermec (that would not fall under the program's built-in cross-licensing discount), this third possibility is not recommended.

In its final assessment, Gartner pointedly notes that many RFID vendors might not realize that Intermec's royalty-charging initiative represents a "high-stakes intellectual-property game that is being played out." These vendors are advised to sit up and pay attention, as Intermec has drawn a veritable line in the sand, and after August 31st it will likely start going after those companies it determines are in violation of its licensing terms.

Read the assessment from Gartner
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