RFID Legal Wrangling Continues

Suit, countersuit as Symbol Technologies and Intermec contest wireless patents

Suit, countersuit as Symbol Technologies and Intermec contest wireless patents

Chicago — March 25, 2005 — Intermec Technologies Corp. this week filed a lawsuit against Symbol Technologies for patent infringement as the legal wrangling between the two radio frequency identification (RFID) solution providers continued two weeks after Symbol brought suit against Intermec also charging infringement of its patents.

In Symbol's suit, announced March 11 and filed in the United States District Court for the District of Delaware, the Holtsville, N.Y.-based company said that Intermec had infringed Symbol patents covering wireless communications technologies.

At the same time, Symbol said that it had terminated its supplier relationship with Intermec for laser scan engines. For a number of years, Symbol supplied Intermec with laser scan engines that Intermec embedded in its bar code scanning equipment. "Symbol now believes it would be inappropriate to carry on such a commercial relationship with Intermec given the outstanding litigation between the two companies," Symbol said in a company statement.

"Long But Unfruitful Negotiations"

Symbol said that it currently holds more than 250 patents in the field of laser bar code scanning, as well as a patent portfolio in the areas relating to micro electro mechanical systems (MEMS) technology, liquid injection molding (LIMS) and imaging intellectual property (IP).

In announcing its suit, Symbol said that its filing resulted from "long but unfruitful licensing negotiations" between the two companies over various IP issues. "Intermec is currently suing Symbol, accusing Symbol of infringing Intermec RFID patents. Symbol sought to address these IP issues through a cross-licensing arrangement between the two companies. However, Symbol's effort to reach a resolution was not successful," Symbol said in its announcement.

Still Committed to Royalty-free RFID Air Interface

Peter Lieb, Symbol senior vice president and general counsel, said in his company's announcement: "Symbol believes that Intermec's imposition of its RFID IP on the industry is potentially harmful to the industry and customers. For months, Symbol has negotiated in earnest, seeking a fair business resolution. As we have a responsibility to our shareholders to protect and defend Symbol's intellectual property, we believed there was no alternative but to file suit against Intermec."

In its lawsuit, Symbol alleges that Intermec infringes Symbol's patents relating to the wireless communications standard 802.11, also known as Wi-Fi. The lawsuit also covers Intermec's use of Symbol Wi-Fi patents in Intermec's bar code scanning terminals. Symbol said it is seeking a permanent injunction against Intermec's use of Symbol's patented technologies, and monetary damages for prior use.

Two of the four patents asserted in this lawsuit were found by a jury in the same court to be infringed by Proxim Corporation's 802.11-compliant equipment. On September 12, 2003, that jury ordered Proxim to pay Symbol approximately $23 million, based on a 6 percent royalty, according to Symbol.

Symbol said that it remains committed to a royalty-free RFID air interface. The air interface standard is the basis for broad adoption of RFID, Symbol said, adding that the significance of the air interface standard is similar to the importance of bar code symbologies in the broad adoption of bar code technology.

Intermec: "No Basis" for Symbol Suit

In response to Symbol's lawsuit, Everett, Wash.-based Intermec said that it "strongly believes there is no basis for" Symbol's lawsuit and suggested that the suit was a reaction to Intermec's RFID patent-infringement lawsuit against Matrics Inc., filed in June 2004, charging that Matrics willfully and deliberately made, used, sold and offered for sale in the United States RFID products known to infringe Intermec's RFID patents. Symbol acquired the lawsuit in September 2004 when it purchased Matrics.

This week Intermec filed suit in the U.S. District Court for the District of Delaware charging Symbol with infringement of Intermec intellectual property related to key Intermec wireless access, terminal and software technologies. "Symbol products infringe six Intermec patents," Intermec charged in its new lawsuit.

The patents involved cover "a coherent, integrated wireless data capture system capable of distributing data over a network; portable, battery-powered data processing devices capable of running a multi-tasking operating system; and handheld portable data capture devices with graphical user interfaces (GUI), the ability to accept handwritten information and the ability to process that information," Intermec said in its announcement of the new suit. Intermec is seeking damages and a permanent injunction to prohibit further infringement of Intermec patents.

Symbol's decision earlier this month to terminate its supply contract with Intermec and to assert patent infringement claims against Intermec "frees us to defend ourselves against Symbol's claims and to prosecute our own patent infringement claims against Symbol," said Intermec President Tom Miller in his company's statement on the new lawsuit.

No Impact Seen on End-users

Miller added that Intermec had anticipated the termination of the supply contract for laser scan engines and asserted that the cancellation of the contract would have "no effect" on Intermec business operations thanks to a substantial and long-term supply of Symbol scan engine inventory, additional outside sources of laser scan engines based on technology licensed by Symbol, and a range of imagers not affected by Symbol's decision.

Simultaneous with its new suit, Intermec filed responses to the earlier Symbol claims, denying that Symbol had the legal right to terminate the laser scan engine supply agreement and asserting that Symbol wrongfully terminated that agreement.

Patent disputes of this type are typically resolved in negotiations between manufacturers without involving end users, Intermec said in its corporate statement this week. "That's what we expect to happen here," Miller said. "Intermec has no plan to sue end-users over RFID or other patented technologies it controls.

Additional Articles of Interest

For a contrary view of the future of the RFID market, see the article "The O'RFID Factor: A 'No Spin' Look at Where Radio Frequency Identification Is Headed," in the October/November 2004 issue of Supply & Demand Chain Executive.

For more information on trends relating to radio frequency identification, follow this link for an extensive listing of SDCExec.com articles, featuring the latest research findings on the RFID, including adoption, return on investment and barriers to implementation.