Companies join to create the RFID Consortium

An important move on the RFID front. Seven companies from around the world announced they have organized the RFID Consortium jointly to license essential ultra-high frequency radio frequency identification (UHF RFID) patents. The companies are: 3M Innovative Properties; France Telecom; HP; LG Electronics; Motorola; ThingMagic; and Zebra Technologies. These companies have formed the RFID Consortium for the purpose of licensing patents that are essential to making products supporting the UHF RFID Standards announced by EPCglobal and ISO/IEC. “Our licensing arrangement helps companies in the RFID industry avoid high transaction costs, blocking positions, and costly litigation which might otherwise occur,” explained Dave Poole, a spokesperson for the RFID Consortium and former V.P. of patents and technology for Zebra Technologies. “We believe this will provide a substantial benefit to both the RFID industry and the participating patent holders.”

“This licensing arrangement will provide a convenient and cost-effective way for any interested company to obtain patent licenses required to implement the UHF RFID Standards,” said Lem Amen, vice president and general manager of 3M Track and Trace Solutions. “This will benefit consumers by encouraging competition and speeding adoption of the technology.” Poole added that “We’ve come a long way since our initial patent call late last year. We’ve brought together holders of patents essential for UHF RFID products; we’ve agreed on the definitive terms of the licensing arrangement; and we’ve established an LLC to manage the arrangement.” The consortium has requested a business review from the U.S. Department of Justice. After that review is concluded, the consortium expects to offer licenses to firms interested in making, using, or selling UHF RFID readers, labels, or chips used in labels. “The signing of the definitive agreements is a substantial accomplishment and sends a clear signal that the industry is committed to expanding availability and use of RFID technology,” said Poole. “We are continuing to work with all segments of the industry and expect more companies to join these industry leaders.”

The RFID Consortium is encouraging all companies with essential patents to join the consortium and include their patents in the licensing arrangement. Under the joint licensing arrangement, all patents essential to the practice of the UHF RFID Standards owned by participants in the licensing arrangement will be made available to interested companies via a single license on fair, reasonable and nondiscriminatory terms. Joint licensing arrangements encourage wide-spread adoption of a standard by providing a convenient and cost-effective way to obtain licenses to the patents essential to practice the standard. Reducing these transaction costs benefits both the patent owners and the consumer. “We’re excited about the potential to accelerate market acceptance of the RFID standards by bringing together a substantial portfolio of essential patents,” said Poole. “We look forward to completing the process and beginning to offer licenses.”