US DOJ Won't Challenge RFID Licensing Plan

The U.S. Department of Justice won't oppose an agreement by seven companies to jointly license patents related to RFID (radio frequency identification) technology, potentially clearing the way for greater deployment of RFID standards.

The DOJ said Tuesday it will not pursue antitrust complaints against the seven members of the RFID Consortium, after a representative of the group asked for the DOJ's opinion of the group's patent agreement. The consortium members own 10 patents closely tied to standards developed for ultra-high frequency (UHF) RFID, a type of RFID that allows chips to be read from up to 10 meters away.

Last November, consortium members -- 3M, France Telecom, Hewlett-Packard, LG Electronics, Motorola, ThingMagic and Zebra Technologies -- formed a limited liability partnership to jointly license their RFID-related patents using "reasonable and nondiscriminatory terms," the DOJ said. The companies requested the DOJ conduct a business review to determine that the partnership didn't break any U.S. antitrust laws.

Under the consortium plan, an independent licensing agent will offer nonexclusive licenses to other companies interested in adopting RFID.

The patents address a UHF RFID standard endorsed in 2006 by the International Organization for Standardization (ISO). The so-called Generation-2 standard was originally created by EPCglobal, a private RFID standards group.

"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," Lem Amen, vice president and general manager of 3M Track and Trace Solutions, said in a November news release from the consortium. "This will benefit consumers by encouraging competition and speeding adoption of the technology."

A representative of the RFID Consortium wasn't immediately available for comment on the DOJ's decision.

While organizations including Wal-Mart and the U.S. Department of Defense have embraced RFID, other businesses have been slow to adopt the technology, according to some surveys. RFID allows products and materials to be tagged and scanned, helping organizations keep track of their inventories.

A survey released by the Computing Technology Industry Association (CompTIA) a year ago found that 84 percent of technology resellers, solution providers, systems integrators and consultants will or may offer RFID products and solutions in the next three years. But nearly two-thirds of the companies said their customers hadn't yet implemented RFID.

The DOJ, in a letter to the RFID Consortium, said its proposal is reasonably likely to produce procompetitive benefits. The consortium holds "essential" RFID patents, the DOJ said.

"The proposed patent-licensing arrangement has the potential to speed up the commercialization of UHF RFID technology, to the benefit of competition and consumers, without harming competition or impeding innovation," Thomas O. Barnett, assistant attorney general in charge of the DOJ's Antitrust Division, said in a statement.

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