Tuesday, September 13, 2005

THE INTERMEC FACTOR: It would seem that things were getting settled this week when Symbol and Intermec agreed to a (temporary) cease-fire in their patent litigation wars, the latest one being filed in June by Intermec against Matrics (which was subsequently bought up by Symbol). In a statement reminiscent of the old Tareyton cigarette ads, interim president and CEO of Symbol Sal Ianuzzi proclaimed that "we prefer to negotiate rather than litigate." Intermec and Symbol also agreed to negotiate settlements to their other intellectual-property disputes, including a 90-day moratorium as they look for a resolution to all intellectual-property disputes between the two companies.

As part of the cease-fire, a cross-license was unveiled, where Symbol will join Intermec's Rapid Start licensing program for RFID intellectual property, which provides unlimited access to its portfolio of more than 145 RFID patents, in return for an initial fee plus royalty fees ranging from 2.5% to 7.5% of the finished product price. In exchange, Intermec will get access to elements of Symbol's RFID intellectual property by exercising cross-licensing provisions of the Rapid Start program. Symbol holds about 50 RFID patents and patent applications.

While this is certainly welcome news for Intermec and Symbol, there is the nagging issue of Intermec's refusal to join the RFID technology licensing consortium to provide less-complicated access to RFID patents, as well as easier management. The consortium's goal is to offer a structured approach for holders of RFID patents to receive fair compensation for them so they can offer reasonable prices to users. Accordingly, the consortium plans to manage patent licenses for RFID chips, tags, labels and readers to release patent holders from having to do so. Further, it plans to integrate complementary technologies to reduce costs.

Intermec, so far, has seen no need to join the consortium, since they believe they hold key patents on core RFID technologies. In fact, some of the founding consortium members have already signed a license agreement with Intermec and others are in the application process. “Being a member of the consortium does not remove the need to have a license from Intermec to our broad RFID portfolio,” said Tom Miller, Intermec’s president.

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