The RFID Patent Pool: Will It Make Waves?

Posted by: Olga Kharif on September 11, 2006

A year ago, eight companies created The RFID Consortium with the goal of forming a patent pool. Now, it appears that the pool, which will allow companies to license essential RFID patents in one fell swoop instead of negotiating with multiple intellectual property holders for licenses, is very close to being formed. The consortium hopes to issue a call for companies to submit their patents into the pool within a month. For the pool to be formed and functioning, the entity will still need to gain approval from the Department of Justice (that will take three to six months).

But while the pool could help some companies cut their licensing costs, it still remains to be seen if its patents portfolio will be extensive — and, ultimately, successful in driving RFID adoption. A company called Intermec, which is not part of the consortium, still owns the bulk of passive RFID patents. And while its execs don’t rule out eventually joining the pool, they “are not rushing to join in immediately,” says Intermec’s Mike Wills. Why? He says that an IP property holder and pool participants often disagree over the value of a patent. In other words, this pool will have to be willing to charge high license prices for Intermec to take part. Problem is, the pool is being created in order to lower licensing fees.

The consortium really needs Intermec, in my opinion, to have an impact. But it might be tough and time consuming to find a middle ground. However, the fact that Intermec isn’t ruling out joining in is quite significant and means that an agreement can be reached.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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