Barcode maker Intermec Technologies has sued RFID tag and reader maker Matrics, alleging it has infringed four Intermec patents.
The four US patents, address the basic RFID system: chip, tag, and reader, and how they interface with each other, said Intermec vice-president Mike Wills.
Intermec's lawsuit is unexpected because the company has showed little sign of litigation before, despite a lot of high-profile activity and plenty of products in the field, and a solid set of patents, which include one for the basic idea of a thin, cheap, flexible radio beacon.
The patents could also equally apply to virtually all the other suppliers in the emerging RFID market, including giants such as Texas Instruments and Philips Electronics, and new start-ups such as Alien Technology, yet the company is suing just one competitor, Matrics.
In fact, Matrics is part of one group proposing technologies to the next generation RFID standard, the UHF Generation 2, being put together by RFID standards maker, EPCglobal, while Intermec is in a different camp. "This definitely clouds the UHF Generation 2 standards discussions and is fueling considerable animosity in the industry," said Erik Michielsen, director or ABI Research.
"The standards are a co-operative effort, where people have to sign off on intellectual property sharing," said Michielsen.
However, this lawsuit could show a crack in that agreement. At present the intellectual property tends to reside with the more established companies such as Intermec, while newer venture-funded companies such as Matrics and Alien tend to own less intellectual property, and also be under pressure from their funders to get a return quickly.
It is possible that older, well-funded companies could decide that a legal delay is worth suffering, in order to gain more control, and a better eventual return on their intellectual property.
"Intermec has been slow in embracing newer technologies," said Michielsen. "They have not been the ones to progress and innovate on tags in this UHF space. This is no different from Texas Instruments and Philips."
Unfortunately, it could open up a Pandora's box, as companies like Texas Instruments and Philips have all kinds of patents that could affect specific parts of the RFID market. If everyone decides to play it tough, sorting through them could spell a big delay to the standards.
"This does not spell disaster by any means," said an optimistic Michielsen. "It will be resolved."
He pointed out that Intermec's royalty on barcode systems has not held up the universal deployment of barcodes. The potential returns from RFID patents are huge, although the actual addition to end-user costs will be small.
There is a danger that companies, including big retailers like Wal-Mart Stores and Tesco, may go lukewarm and put off or reduce their RFID deployments. United Parcel Service has already decided to stick with barcodes for a major high-tech revamp of its parcel tracking systems.
Peter Judge writes for Techworld.com