Intermec, Symbol Resolve Outstanding IP Disputes

The companies have worked out a cross-licensing agreement and a covenant not to sue one another over intellectual property rights for four years.

By Mary Catherine O'Connor

July 18, 2006—After settling one of five lawsuits last fall, major RFID hardware manufacturers Intermec and Symbol Technologies report that they have settled the four remaining intellectual property (IP) disputes between them. The lawsuits were based on claims by both firms that each was infringing on IP for bar-code and wireless technologies employed in automatic identification devices.

The companies have resolved the claims through a cross-licensing agreement, though neither has revealed the number of patents or details regarding the licenses, or the devices in which the disputed bar-code and wireless technology IP is used. Both companies told RFID Journal, however, that they see the settlement as a positive development for all of their customers and stakeholders, and that many of the RFID devices each company sells also use the once-disputed bar-code and wireless technology patents. This settlement may allay end users' concerns that litigation could impact either company's ability to continue producing any products based on the allegedly infringed IP.

"Any time intellectual property issues can be resolved between major players in an industry, it lends stability to that market. Investors—and Symbol's and Intermec's customers and suppliers—all have more financial certainty [through the settlement]," says Douglas Farry, a managing director at the law firm of McKenna, Long & Aldridge and lead correspondent for the firm's RFID Law Blog.

"We came to an agreement with Symbol that it wasn't beneficial to maintain an adversarial posture," says Kevin McCarty, Intermec's director of investor relations. "A protracted legal battle is not in the best interest of anyone, especially our stakeholders," he explains, because such disputes generate uncertainty. He adds that Intermec would prefer to compete with Symbol in the marketplace, rather than in the courtroom.

Moreover, Intermec and Symbol have entered into four-year covenants not to sue each other with respect to any of the patents owned by either firm. McCarty notes that many covenants not to sue are based on a four-year period, and that it seemed to be "an adequate amount of time" for the two firms to hold off on further IP actions. "Four years is not right around the corner, but it also doesn't lock us into anything forever," he says. The companies further agreed to release all damage claims each has made related to the lawsuits.

The four settled lawsuits were initiated in March 2005, when Symbol sued Intermec, charging it with infringing on Symbol patents covering Wi-Fi wireless communications technology. Symbol claimed Intermec incorporated such technology into its mobile computers, including its 700-series handheld RFID readers (see Symbol Sues Intermec in IP Dispute).

Later that same month, Intermec sued Symbol, accusing the latter of infringing six Intermec patents covering wireless networking and software used in handheld and wireless devices (see Round 3: Intermec vs. Symbol).

The very next month, Symbol volleyed with its second suit against Intermec, declaring that it had infringed on Symbol patents related to the decoding of bar codes (see Symbol Files Second Suit). In June, Intermec made a claim to the U.S. International Trade Commission (USITC) that Symbol was violating U.S. trade practices by importing three of its own products—handheld mobile computing devices and accessories—that Intermec said infringed on some of its patents (see Intermec Says Symbol Violating Trade Law).

In September, the two companies announced that they had settled on a lawsuit over RFID intellectual property. Filed by Intermec against Matrics (an RFID hardware provider later purchased soon after by Symbol) in June 2004, the suit claimed Matrics was infringing on four of Intermec's more than 100 RFID patents (see Intermec Sues Matrics). Intermec and Symbol settled the suit through an agreement in which both companies provided access to each other's RFID-related IP. This was achieved via licensing agreements based on Intermec's Rapid Start Licensing Program, which Symbol joined (see Intermec, Symbol Reach Major Agreement).

While the legal wrangling between Intermec and Symbol appears to be settled (at least for the next four years) Intermec late last month filed suit against Morgan Hill, Calif., RFID device maker Alien Technology. The suit alleges that Alien's UHF EPC Gen 2 RFID readers and tags infringe on 10 Intermec patents. Intermec is seeking an injunction prohibiting Alien from selling the infringing RFID products, and it is also seeking monetary damages from the sale of Alien's Gen 2 readers (see Intermec Sues Alien Over IP). Intermec and Alien have declined to comment on the suit at this time.