The recent announcement that the "Global" and "Freedom" group proposals for a new UHF EPC Generation 2 tag standard had reached a consensus (the "Chicago Proposal"), seemed at first to be good news. But according to ABI Research principal analyst, Erik Michielsen, jubilation has been short-lived, as Intermec IP Corp., one of the pillars of the "Global" faction, announced its claim to ownership of the proposed air-interface protocol and an intention to charge royalties for its use. The company has said it will announce a licensing program soon.

Intermec also filed a spate of lawsuits against rival tag maker Matrics, Inc., claiming not only "reasonable royalties" but also treble damages for Matrics' alleged "willful infringement" of its patents. The amounts involved are not trivial, affecting contracts such as the 100 million-tag deal Matrics has with Checkpoint Systems, a contract with Honk Kong airport, and a $25 million deal with Las Vegas' McCarran airport.

Other players in the RFID space are surprised and concerned at the prospect of Intermec putting its intellectual property into the most basic part of the proposed standard. Michielsen says that in the general opinion, what the industry needs instead is open access to the base technology, allowing multiple suppliers and low prices to meet escalating market demand.

"While Intermec has only filed suit against Matrics," says Michielsen, "that does not mean it won't file against other tagmakers in the future. All in all, this definitely clouds the UHF Generation 2 standards discussions and is fueling considerable animosity in the industry."

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