Patent Extortion

The lawsuit filed by RFID World against Wal-Mart, Target, Pfizer and others is completely bogus.
Published: August 31, 2006

It was inevitable that someone would eventually crawl out of their hole in the wall and sue a company for infringing an RFID patent. Well, it’s now happened, and the suit is extremely disappointing (see Patent Holder Sues Wal-Mart, Others). A gentleman named Ronald Bormaster filed a patent in 2002 for tracking kids, golf clubs and whatnot using RFID. Now, he’s trying to claim Wal-Mart, Home Depot, Pfizer and others are infringing the patent and causing him damages. Puuuhleeeeze!

There are a few things that are particularly unfortunate about this suit. First, the guy never mentions the words “warehouse,” “distribution center” or “store” in his patent application. There’s no mention of tracking items in the supply chain, or of using RFID to improve overall supply-chain efficiency. And yet, somehow, the companies doing this sort of thing are infringing on his patent? The logic here escapes me.

Second, Bormaster has recently formed a company, but it has no assets other than the patent he transferred to it. The company has made no investments in developing an RFID inventory-management system. So how, exactly, has this guy been damaged by the fact that Wal-Mart and others are using such a system?

Third, the guy and his lawyers haven’t even bothered to do enough research to sue relevant parties. Pfizer is using RFID, yes, but to my knowledge, their use is not about inventory management so much as product authentication. Michelin and Home Depot, also included in the suit, aren’t doing much in the way of inventory management, either. It seems that the lawyers just pulled some big names from the headlines and put them in the suit. These companies will now have to spend money to defend themselves from this bogus suit.

I have nothing against people defending their intellectual property against infringement. In fact, as a publisher with a lot of intellectual property that is often stolen, I feel the law should protect those who have legitimate intellectual property. And I recognize that big companies often trod on the rights of individuals with legitimate inventions. That’s unfortunate. But this suit is not about protecting intellectual property. This is about abusing the system to extort money from big companies. And it makes me sick.