July 05, 2006
Litigation Comes To The RFID Industry
As if it's not bad enough reading about all the lawsuits being levied in the PDA (e.g., RIM's Blackberry) and VoIP (e.g., Vonage) markets, there have been lawsuits and counter-lawsuits in the past two years aimed at RFID technology, due to supposed patent infringments.
Time was when innovation got your company ahead of the market. Now, innovation is a beacon for lawsuits that have yet to prove any real infractions. The net result is a hindrance of further innovation and increased technology costs.
Some experts believe that such patent-infringement lawsuits tend to occur in any industry that is maturing. Fortunately, a bit of digging shows that there have been very few RFID-related lawsuits to date:
- Intermec recently sued Alien Technology on allegations of up to 10 patent infringements. Alien in turn filed suit to prove that none of their RFID technology violated any Intermec patents. However, because Alien field suit in North Dakota Federal Court and Intermec has no operations there, Intermec in turn feels that court has no jurisdiction. Intermec currently holds over 150 RFID-based patents. [RFID Journal, ]
- Intermec had previously sued Matrics, around 2004. When Symbol Technologies purchased Matrics, they inherited the lawsuit and promptly sued Intermec, who counter-counter-sued. The two companies later came to an agreement.
Given that Alien recently filed an S-1 with the US SEC, their counter-lawsuit may have been inappropriate. If I'm not mistaken, that means Alien Technologies plans to go public.
Other lawsuits loosely related to RFID include that of James Chaffee, of the San Francisco, California, organization Save Our Libraries, over the City of San Francisco. The lawsuit claims that recently resigned City Librarian Susan Hildreth misappropriated funds.
However, what really got the ire of members of Save Our Libraries was Hildreth's "flawed proposal for (RFID) in library books." [Save Our Libraries] Their concern was over privacy issues.
A very interesting reaction, given the number of new and existing RFID library projects that have no such claims from users. It's not clear, however, that the lawsuit was levied in retaliation for the proposed project.
An alternative to lawsuits has been royalties on the use of patented RFID technologies, although these raise the cost of tags and other RFID equipment, sometimes to the point of project infeasibility. RFID tags are currently too costly for widespread item-level use. Recent breakthroughs have brought the prices of some tags down to sub-ten cents, possibly less. Any lawsuits will of course drive the technology price up.
Patent issues have hit other industries hard, including software and pharmaceutical drugs, prompting a number of organizations to push for no patents or a patent pool. It'll be interesting to see if the idea of an RFID patent pool takes hold.
--
Did you enjoy this post?
« RFID Applications For Libraries | Main | RFID Baggage Handling - Preventing Disasters »
