Roger Stewart, former CTO of Alien Technology, an early RFID Technology pioneer. from "What To Do About All the Patent Litigation?
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Roger Stewart, former CTO of Alien Technology, an early RFID Technology pioneer. from "What To Do About All the Patent Litigation?

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MIT Enterprise Forum of Cambridge 10/21 RFID Circle Event: What To Do About All the Patent Litigation?

MIT Enterprise Forum of Cambridge 10/21 RFID Circle Event: What To Do About All the Patent Litigation?

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Roger Stewart, former CTO of Alien Technology, an early RFID Technology pioneer. from "What To Do About All the Patent Litigation? Presentation Transcript

  • 1. A Brief Introduction To RFID Patents Quantity, Quality and Ownership Litigation & Alternative Solutions A Polarized Industry Roger Stewart President Sourland Mountain Associates Sourland Mountain Associates
  • 2. How Many New RFID Patents? the patent publication rate is accelerating Sourland Mountain Associates Number of Patents per year 600 500 400 300 200 100 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 3. Sourland Mountain Associates 13,532 How Many RFID Patents? Patents in RFID Word Search 7,600 Patents in Delphion Search 4,289 Patents in High-Impact RFID Database 550 15,000 New RFID per year Rough Estimate of RFID Patents in 2013 MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 4. Sourland Mountain Associates Where are the RFID Patents Going? Belgium Greece Israel Lithuania Norway Romania South Africa United States Hong Kong Netherlands Sweden Singapore Austria New Zealand Mexico Korea Europe United Kingdom Germany Taiwan China Canada Australia Brazil China Japan Australia Canada Germany United States Europe United Kingdom Japan MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 5. RFID Patent Classifications Sourland Mountain Associates • Tag Chip – – – • Tag Structure – – – • low-noise transmitters & receivers Data Systems – – – • anti-collision protocols wireless data transport security Reader – • readers & tags impedance transformation & resonance Protocols – – – • chip packaging batteries & energy storage manufacturing Antennas – – • memory frequency synchronization power extraction, regulation & management exotic reader/tag combinations range & location sensing testing Applications – – – libraries retail security MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 6. Sourland Mountain Associates Technical Quality Ratings A The most significant blocking RFID patents. They usually include a breakthrough technical specification and will be extremely difficult or impossible to work around. B Important patents with key technical innovation that appear to be difficult to work around when designing certain RFID products. C Useful patents with significant technical innovation but narrower scope. While they have technical merit, there are alternative solutions that could be implemented if necessary. D Secondary patents that -- while perhaps useful for some special products -- appear only marginally useful in mainstream RFID applications. All quality ratings assume that the patents will withstand invalidity challenges. MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 7. Sourland Mountain Associates Patent Ownership Summary Company A-Patents Intermec 7 Checkpoint 1 Motorola 3 Micron 1 Avid 2 Lucent 1 BTG -TI 1 Sarnoff 1 3M 1 Alien 1 Marconi -Northrup -Tadiran 1 Tek 1 U of Pittsburgh 1 Others -- B-Patents 13 8 5 5 2 3 3 -1 --2 2 ---20 C-Patents 9 10 6 7 -2 2 2 ---1 1 ---25 Total 23% 10% 10% 7% 5% 5% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% 19% MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 8. Why We Need A Patent Pool Sourland Mountain Associates the whirling wheel of death • RFID Patent Assignment by Company • 71 Companies or more • Each own 15 or more RFID Patents • Without as pool, thousands of individual licenses would have to be negotiated and signed to resolve patent infringement issues MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 9. Standard Individual Licensing Models Sourland Mountain Associates Licensee Licensee Patent Owner -------Essential Patent Licensee Licensee MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 10. Sourland Mountain Associates Patent Licensing & Standards Standard or technical specification Licensee --------------- Patent Owner Essential Patent Licensee Patent Owner --------------- Essential Patent Licensee --------------- Patent Owner Essential Patent Licensee MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 11. Sourland Mountain Associates Licensing Through a Patent Pool Essential Patent Pool License Essential Patent License Administrator Licensee Essential Patent MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 12. Ostrich Society Sourland Mountain Associates . . . if I don’t look . . . I can’t see it . . . and therefore it must not exist . . . Denial Primary Premise: There are no infringed patents. Secondary Premise: If there are, then they must all be invalid. Reality Any successful RFID tag will infringe dozens of valid RFID patents. - chip patents - tag structure patents - antenna design patents - protocol patent MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 13. Flat Earth Society Sourland Mountain Associates . . . this is my patent . . . therefore it must be at the center of the universe . . . • Patent Owners – Know the value of their own patents, but very little about other people’s patents – Overestimate relative value of their patents – Underestimate value of other patents • Reality – No one controls more than a tiny fraction of the 15,000 RFID patents covering tags, readers, software, and applications – Commercialization requires freedom to practice in all areas – not just yours – Unlike the IP-dominated drug & art industries, IP revenues are limited in RFID-related industries like semiconductors and displays – Based on related industries, the RFID industry cannot sustain IP costs of more than 20% of profits or 10% of sales – No one patent holder can claim more than a tiny part of that – perhaps 0.02 - 0.5% of sales MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13
  • 14. Sourland Mountain Associates • Summary & Options Currently – Patent owners are offered nothing – Owners are left with unreasonable expectations & no money – Result: lawyers get rich • 270 different vendors, 20 major patent owners, 15,000 patents • Testing these patents in court is costing millions of dollars per patent • Uncertainty is delaying manufacturing & adoption by users – All RFID manufacturers & users are equally exposed – All litigation and licensing costs will be passed on to users • Product and interface specifications make little difference – Patent problems mostly unrelated to any particular specification – Specification changes are unlikely to alter the legal outcome significantly • • Out-of-Court settlement via patent pools offer a solution RFID Databases are available to help access risk & guide acquisitions MIT Enterprise Forum / RFID/NFC Circle Event, What to do about all the Patent Litigation? Roger Stewart 10/21/13