The Department of Justice has announced it will not challenge a plan by a consortium of RFID-oriented companies to jointly license patents needed to comply with standards for UHF RFID technology. In explaining its decision, the department points to possible benefits of the plan for consumers and competition, including cost savings and greater access to the technology.
The group putting forward the proposal, the RFID Consortium LLC, is made up of companies that hold at least one essential UHF RFID patent. According to the consortium’s proposal, an independent licensing agent will offer nonexclusive licenses to the consortium’s portfolio of essential UHF RFID patents on reasonable and nondiscriminatory terms. An independent expert reviews the patents to ensure that the portfolio does not combine patents that would otherwise compete with each other, and the owners of the patents will retain the rights to license their patents independently.
Additionally, the consortium would create safeguards tailored to minimize the risk of restricting competition between producers of UHF RFID products and the dampening of incentives to innovate, according to the DOJ.
The justice department’s position was out forth in a letter from Thomas O. Barnett, assistant attorney general in charge of the Antitrust Division, to lawyers for the RFID Consortium. In the letter, the DOJ said the proposed arrangement appears reasonably likely to yield pro-competitive benefits because it limits the ability of the consortium’s members to use intellectual property rights to block or delay the implementation of UHF RFID standards and offers savings in transaction costs for licensors and licensees.
“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,” says Barnett in the letter.
Under the Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division will challenge the action under the antitrust laws.