Symbol Sues Intermec

The RFID intellectual property plot thickened late last week as Symbol sued archrival Intermec over the latter's use of certain wireless communications technologies.
Published: March 11, 2005

This article was originally published by RFID Update.

March 11, 2005—The RFID intellectual property plot thickened late last week as Symbol sued archrival Intermec over the latter’s use of certain wireless communications technologies. Effective March 10, Symbol will stop selling its laser scan engines to Intermec, citing the inappropriateness of maintaining a supplier relationship given the nasty legal wranglings.

In June of last year, Intermec sued competing RFID tag manufacturer Matrics, which was shortly thereafter purchased for $230 million by Symbol. Many speculate that barcode heavyweight Symbol was willing to pay a premium for Matrics — even given the Intermec lawsuit — as a way to secure a valuable portfolio of RFID-related intellectual property and quickly establish itself in the burgeoning RFID space. Armed with a strong IP portfolio, Symbol would have a bargaining ship against competitors that might seek to bleed it for licensing fees on RFID-related products.

Last week’s suit appears to support that theory. Symbol had apparently entered into cross-licensing negotiations with Intermec that proved “unfruitful,” so it decided to play hardball. Furthermore, the company hopes that the suit will prevent Intermec from succeeding in its widely-publicized (and widely-criticized) initiative to charge licensing fees to RFID solutions providers for certain of its RFID intellectual property.

Symbol senior vice president of global products Todd Helwin said, “We also believe we have a responsibility to the industry and to our customers to fight a policy that could potentially be an onerous imposition of one company’s IP against the RFID industry. We believe Intermec’s RFID IP position, if allowed to stand, could thwart the overall development and wide-scale implementation of RFID, which would be detrimental to the industry and all users of advanced data capture technology.” He goes on, “Intermec has stated publicly that it is reserving the right to license its RFID technology on discriminating terms, and may refuse to license it altogether as it sees fit. This approach could significantly deter the widespread implementation of a compelling new technology. Ultimately, customers will suffer if RFID implementation is slowed by this type of IP assertion.”

For it’s part, Intermec responded swiftly, contesting Symbol’s claims. Quite the contrary to impeding industry development, Intermec said it has sought to further RFID adoption and the standardization process by, among other things, offering key IP on a royalty-free basis. The company simply aims to protect its investment in RFID intellectual property, a position that many analysts say is perfectly reasonable. With respect to Symbol’s canceling sales of the laser scanning engines, President Tom Miller assured customers that “Intermec is well-positioned to supply all scanning products, including lasers, indefinitely.”

How this plays out is anyone’s guess. (Prediction? Email me.) As the owner of widely-used barcode scanning IP, Symbol has formidable legal experience and victories under its belt. But whether it can get the resolute Intermec to stand down remains to be seen.

Symbol’s announcement and Intermec’s reply