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Auto-ID Center Ponders Patent Pool

A pool could reduce the risk of lawsuits slowing the adoption of its EPC system. But it’s not clear whether the RFID industry will go along.
Tags: Standards
Oct 21, 2002—Oct. 21, 2002 - On a sticky morning in early August, some 75 people, many of them lawyers in suits, gathered at the University Park Hotel@MIT, in Cambridge, Mass. They had come to discuss a potentially vexing issue facing the Auto-ID Center: patents. The meeting was called by Kevin Ashton, the center's executive director, to discuss what, if anything, should be done to try to prevent patent infringement lawsuits from inhibiting the adoption of the center's technology.

IP meeting at MIT
A quick search of the United States Patent Office's database turns up 595 patents issued between 1996 and 2002 and another 386 pending. And those are just U.S. patents with the abbreviation RFID in them. There could be other relevant patents that have been issued in other regions. Many of those patents probably aren't worth the paper they are written on, but some could potentially relate to the technology being developed by the Auto-ID Center.

Ashton presented a paper, "Towards an Approach to 'Intellectual Property'" to foster discussion. The paper focused mainly on RFID patents, but the Auto-ID Center's system also includes other technical areas, including digital signal processing, computer networking and computer software.

Ashton's concern was that if there were a spate of lawsuits as companies began adopting the electronic product code (EPC) and associated infrastructure, then funding for vendors would dry up. Potential customers would be reluctant to invest in the technology, and all the potential benefits to users, vendors, investors, and the economy as a whole would be lost. In short, the fragile emerging market for the center's RFID technology could collapse under the weight of the suits.

Ashton doesn't believe that such a scenario will be played out. He told RFID Journal that he considers this "a loose end, as opposed to a major obstacle." His goal in calling the meeting and raising the issue was simply to try to give the Auto-ID Center's technology the greatest chance of being adopted. "Getting this issue [patents] right will make it happen quicker," he says. "It's not a go, no-go problem."

In the afternoon, the meeting broke up into discussion groups led by three lawyers. At the end of the day, says Stephen Brown, a senior VP and general counsel for the Uniform Code Council, those present were "certainly not rejecting the idea of a patent pool, but they hadn't bought into it either."

The group wanted more information about how the pool would be set up and managed. Ashton agreed to work up a proposal, which he plans to present to the Auto-ID Center's board at its next meeting in Cambridge on Nov. 12 and 13. If the board approves the patent pool concept, the center will likely set one up in the first half of 2003. The pool would be publicized, and those individuals or companies that believe they have relevant patents would be invited to submit them. They would be vetted by a neutral board and evaluated as to whether they relate to the Auto-ID Center's work. If the patents were found to be related, then the holder or holders would be invited to join the pool. If they joined, they would not give up control of their intellectual property, only the right to instigate lawsuits relating to the Auto-ID Center's specifications.
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