Symbol Ships Improved RFID Chip, Reconciles With Intermec - InformationWeek

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Symbol Ships Improved RFID Chip, Reconciles With Intermec

Symbol says its new RFID chip inlay improves upon the older design but maintains it wasn't to blame for the alleged high rates of faulty chips on printer rolls reported by some companies.

Symbol Technologies Inc. last week began shipping Glacier, the company's internal code name for its new radio-frequency identification chip and antenna inlay. The company developed the new inlay, which will be inserted in packaging labels and tags, after customers complained that up to 20% of Symbol inlays on a printer roll didn't work, industry executives say.

But while Glacier is a more efficiently manufactured inlay--letting Symbol pass on some cost savings to its customers--and will have better performance rates than the older design, Symbol denies it was ever responsible for such a high percentage of faulty inlays. Symbol claims it never ships its inlays "unless we're hitting yield rates in the very high 90 [percentages]," says John Bruno, Symbol's senior VP of RFID. "However, there many issues can lead to low read rates," he says, including problems that occur at the plants of companies that insert the inlays into the printer rolls. "Damage to the inlays can be caused from poor paper stock, cracks in the dye when the antenna is attached, or cracks in the dye when the roll of labels is wound too tight," he says.

Symbol isn't only focused on improving its products. It's also rebuilding industry relationships, resolving intellectual-property disputes with long-time rival Intermec Technologies Corp. The two companies claim they would much rather negotiate than litigate but had never been able to arrive at reasonable terms until the last few weeks.

The dispute was sparked in June 2004, when Intermec filed a patent-infringement suit involving RFID at the Federal District Court in Delaware against Matrics, a wireless-tag maker acquired by Symbol for $230 million. Over the past year, suits and counter-suits have ping-ponged between Symbol and Intermec.

The partial resolution unveiled yesterday is based on a cross-intellectual-property licensing agreement between Intermec and Symbol. Under the terms, Symbol will join Intermec's Rapid Start licensing program for RFID intellectual property, which provides unlimited access to its portfolio of more than 145 RFID patents in return for an initial fee plus royalty fees ranging from 2.5% to 7.5% of the finished product price. In exchange, Symbol will provide Intermec with access to elements of its RFID intellectual property by exercising the cross-licensing provisions of the Rapid Start program. Symbol holds about 50 RFID patents and patent applications.

Intermec and Symbol also have agreed to negotiate settlements to their other intellectual-property disputes. They'll conduct a "90-day moratorium" as they look for a resolution to all intellectual-property squabbles between the two companies. Says Bruno: "We expect to build more than 400 million inlays in 2006, so it was a good time to sit down and work things out."

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