On Aug. 9, 2005, a group of companies involved with radio frequency identification (RFID) technology announced its intention to form an intellectual property (IP) licensing consortium to offer both an efficient patent management approach for patent holders and convenient access to RFID patents for manufacturers and end-users.

Companies that have signed term sheets to become members of the consortium as of the August 9 announcement include:

• Alien Technology Corp.
• Applied Wireless Identification Group Inc.
• Avery Dennison Corp.
• Moore Wallace, an RR Donnelley Co.
• Symbol Technologies Inc.
• ThingMagic Inc.
• Tyco Fire & Security
• Zebra Technologies Corp.

The group is calling for other companies or individuals holding essential RFID patents to join in the proposed consortium.

"We are encouraging all essential RFID patent holders to join with us to form the consortium and add their patents to the license in order to advance the broad adoption of this technology," said Stan Drobac, designated spokesperson for the consortium, and vice president, RFID strategy and planning, Avery Dennison. "We believe this consortium licensing approach is the best way to address the needs of all involved, and to help this emerging technology reach its full potential."

Recognizing that the intellectual property landscape for RFID is complex and that there will be, and are, numerous important patent holders, nearly 20 companies have worked together to develop this patent consortium. The consortium will be modeled after the successful patent licensing consortium formed and implemented around essential technologies in the MPEG-2 and DVD industries.

As with those successful models, the RFID Consortium intends to provide a structured approach for holders of essential RFID patents to receive fair compensation for those patents, at a reasonable cost to the end-user, thus promoting rapid adoption of RFID and greatly reducing the usual road hazards associated with new high-tech product development. This approach offers competitive benefits by integrating complementary technologies and reducing transaction costs. It offers an effective alternative to time-consuming and expensive individual licensing agreements.

The consortium will license patents that are essential to the commercially viable operation and manufacture of RFID chips, tags or labels, and readers. Such consolidated licensing enables the use of broad-based technologies covered by many patents owned by diverse patent holders. It benefits end-users, and also relieves patent holders from the burden of managing hundreds of different licensing agreements with individual licensees.

This proactive approach to licensing should go a long way to smooth a potentially rocky road that the RFID rollout could otherwise traverse. There is great wisdom in the use of obstacle and pitfall avoidance systems for such a complex, not just technical, but legal avenue.

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