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RFID Industry Group Proposes Patent Licensing Consortium
Recognizing that the intellectual property landscape for RFID is complex and that there will be numerous important patent holders, nearly 20 companies have worked together to develop a patent consortium. This consortium will be modeled after the successful patent licensing consortium formed and implemented around essential technologies in the MPEG-2 and DVD industries. As with those successful models, the RFID consortium is intended to provide a structured approach for holders of essential RFID patents to receive fair compensation for those patents, at a reasonable cost to the end-user, thus promoting rapid adoption of RFID. This approach offers competitive benefits by integrating complementary technologies and reducing transaction costs. It offers an effective alternative to time-consuming and expensive individual licensing agreements. RFID technology uses small radio chips that, among other uses, can be placed in tags or labels to help manufacturers and retailers locate stock and to automatically record the movement of inventory. The technology is widely regarded as the next-generation advanced data capture technology, beyond the ubiquitous bar code. Government agencies and leading retailers have urged their suppliers to speed their implementation of RFID technology. The consortium will license patents that are essential to the commercially viable operation and manufacture of RFID chips, tags or labels, and readers. Such consolidated licensing enables the use of broad-based technologies covered by many patents owned by diverse patent holders. MPEG-2 video decoding and DVD format are examples of two technologies that now enjoy widespread availability and industry interoperability as a result of patent portfolio licensing arrangements. Such a licensing approach benefits end-users, and also relieves patent holders from the burden of managing hundreds of different licensing agreements with individual licensees. Under the proposed licensing arrangement, all essential RFID patents owned by members of the consortium will be made available to interested companies via a single license on fair, reasonable and non-discriminatory terms. "The impressive group of companies that have come together to support the consortium believe that an essential patent portfolio license is the most effective approach for assuring access to the intellectual property necessary for RFID to be successfully and widely implemented in the marketplace," said Kevin Ashton, designated spokesperson for the consortium and vice president, ThingMagic. "We are encouraging all essential RFID patent holders to join with us to form the consortium and add their patents to the license in order to advance the broad adoption of this technology," said Stan Drobac, designated spokesperson for the consortium and vice president, RFID strategy and planning, Avery Dennison. "We believe this consortium licensing approach is the best way to address the needs of all involved, and to help this emerging technology reach its full potential." Carl McGrath, chief technology officer at Tyco Fire & Security, worked with the MPEG consortium as an executive at AT&T. According to him, the RFID Consortium could significantly help the commercialization of RFID technology. "I witnessed the success the MPEG consortium had in contributing to the rapid expansion of the digital cable industry and I believe this new consortium can have the same effect for RFID," McGrath said. The consortium will be based on, and supportive of, the standards and specifications announced by EPCglobal, a not-for-profit organization involved in proposing standards for Electronic Product Codes and RFID technology, as well as ISO (International Standards Organization) counterpart proposed standards. The consortium will be open to all patent holders, regardless of whether they were involved in the development of those standards. The EPCglobal and ISO specifications are expected to be followed by RFID technology users to ensure interoperability. The consortium expects to work in parallel with those standard setting organizations to assist in the commercialization and wide acceptance of the standards they independently develop. The involved companies intend to submit their plan for the RFID licensing consortium to the Department of Justice for formal business review. Companies that have signed term sheets to become members of the consortium as of the date of this release include:
Additional companies involved in, and supportive of, the consortium include Magellan Technology Pty Ltd., Precisia LLC, Printronix, Inc. and others. Added Ashton, "We are encouraged by the enormous breadth of support we have received from essential patent owners and others who are vital players in the RFID field." Bell, Boyd & Lloyd LLC attorneys William F. Dolan and Christopher A. Bloom have acted as special counsel for the RFID Consortium. Conference Call Details The spokespeople for the companies proposing to establish the consortium are hosting a conference call today at 12:30 p.m. ET to discuss its formation. To participate in the conference call, dial 800-346-7359 (domestic) or 973-528-0008 (international), using the conference entry code 987804, at least 15 minutes prior to commencement of the call. To access a digital replay afterward, dial 800-332-6854 (domestic) or 973-528-0005 (international), using digital replay Conference ID #987804 through August 16th. About the RFID Consortium The RFID Consortium is comprised of companies involved with radio frequency identification (RFID) technology, and is modeled after the successful patent licensing consortium implemented around essential technologies in the MPEG-2 and DVD industries. The consortium's goal is to provide a structured approach for holders of essential RFID patents to receive fair compensation for those patents, at a reasonable cost to the end-user, thus promoting rapid adoption of RFID. A Web site is in development, to provide further details and background. In the interim, for information about joining the consortium, e-mail rfidlicensing@comcast.net or call 312-807-4399. Media inquiries should be directed to Larry Bouchie, KMC Partners for the RFID Consortium, larry@kmcpartners.com, 617-458-4192. |
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