Intermec Announces Licensing Plan

By Jonathan Collins

For a limited time, the RFID systems provider is offering a broad license for its RFID patents, including those related to EPCglobal's Gen 2, at reduced rates.

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Looking to entice RFID vendors to quickly validate its intellectual property claims on key RFID technology, Intermec Technologies, an Everett, Wash.-based RFID systems provider and one of the largest holders of RFID patents, will launch a three-month-long licensing program this summer.

The company's Rapid Start Licensing Program will provide unlimited access to Intermec's portfolio of more than 145 Intermec RFID patents in return for an initial fee for each of four groups of patents. The initial fee, which Intermec has yet to determine, will be a flat charge that can be paid over the course of a year instead of one single payment. Licensees will also have to pay royalty fees ranging from 2.5 to 7.5 percent of the finished product price depending on the product category. The four product categories under the program are RFID chips and dies, RFID tags and labels, fixed RFID readers and printers, and mobile or handheld RFID readers and printers. Intermec says it has yet to determine which groups will pay the highest royalty rates.

Chris Kelley

Under the scheme, Intermec says it will offer reduced royalties to licensees who license their own IP with Intermec.

However, the company maintains the goal of the program is to provide a quick and simple way for companies to license its RFID IP without the need for both Intermec and any RFID equipment vendor to go into detailed research to determine which specific Intermec-owned IP is used in the vendor's product.

"We have spoken to hundreds of companies [about licensing IP] and understand that the industry needed a licensing program that could move things ahead quickly. With this program, companies can get on board quickly and sign up without lengthy negotiations," says Chris Kelley, director of RFID business development at Intermec.

In addition, companies that sign up to the program will be absolved of any issues of past infringement as well as risk of future infringement, according to Intermec.

The program begins June 1, 2005, and ends Aug. 31, 2005. After that says the company, it will only offer individual patents for license. Licenses for those patents will be offered on a reasonable and nondiscriminatory basis (RAND)—primarily as part of the ongoing ISO 18000-6C standards-setting activities—but at less favorable rates and terms.

The limited time period for the licensing program is to ensure that companies that are paying royalties to license Intermec technology will not be at a competitive disadvantage compared with any of their competitors that have not joined the licensing program, according to Kelley.

The Rapid Start Licensing Program isn't the first licensing program launched by Intermec. In August, the company said it would make five RFID patents available on a royalty-free basis and would make nine issued patents and five pending patents available on a RAND royalty-bearing basis. In February, however, Intermec indicated it would cease offering its RFID patents on a RAND basis to companies building products based on EPCglobal's Gen 2 standard (see Intermec Withdraws IP Licensing Plan). The following month, Intermec told EPCglobal it would seek RAND royalties for the use of two pieces of intellectual property it said were part of a draft Application-Level Events (ALE) specification (see Intermec Files New EPC Royalty Claims).

Intermec says it has not publicized any companies that may have signed up as part of its other licensing programs but it will publish the names of companies that join the Rapid Start Licensing Program.

Intermec's new licensing program comes in the wake of a spate of suits and countersuits between Intermec and Symbol Technologies, with each company filing suit against the other claiming a host of patent infringements. That battle begun June last year when Intermec filed suit against Matrics, a company bought by Symbol the following month. (See Intermec Sues Matrics, Symbol Sues Intermec in IP Dispute, Round 3: Intermec vs. Symbol, and Symbol Files Second Suit.)