August 31, 2006
More RFID Woes: Wal-Mart Sued For Alleged Patent Violation
Wal-Mart is being sued for supposedly violating an RFID-based inventory control patent filed in 2002 by a company called RFID World. Also named in the suit are Gillette (now owned by Procter & Gamble), Michelin, Home Depot, Target, and Pfizer). Visit RFID Journal for more details of the suit.
Wal-Mart and Target are probably two of the largest retailers using RFID for inventory control and supply chain management. Conflicting media reports suggest that Wal-Mart has had some difficulties with their RFID rollout and might have scaled back their expectations, but they say they are moving ahead. Some of their suppliers are reluctant to use RFID because they have not perceived a reasonable ROI (return on investment). As a result, some suppliers have lagged behind expected milestones from Wal-Mart, causing the retailer to get heavy-handed and mandate the use of RFID by all suppliers.
While implementing the technology is often perceived as being expensive, one small manufacturer managed their initial RFID trial for around US$6,000, with just one employee. Part of the misperception might come from the confusion betweeen item-level tagging and pallet- and case-level tagging - the latter two of which are generally less costly than item-level tagging. However, with a lawsuit in progress, one which suggests that suppliers will also be in violation RFID World's patent if they comply with Wal-Mart's standard, it's possible that there will be more setbacks in Wal-Mart'sRFID rollout.
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