EPCglobal is one step closer to establishing an industry standard for RFID-based EPCs. It has moved the Gen 2 specification to the final stage before its ratification as a standard.

The next step is for vendors to create prototypes based on this spec to validate that products can be built to the new standard. Once that is done, EPCglobal's board will vote on the spec as a standard.

But there's one fly in the ointment. The patent issue with Intermec is still out there and unresolved. Intermec says that the Gen 2 standard as presently comprised will infringe Intermec's patents, and therefore Intermec is asking for royalties for technology providers that use Gen 2 standard.

EPCglobal and Intermec are still trying to reach agreement on Intermec's patent claim. In the absence of some kind of agreement, it means that companies will have to pay Intermec's royalties or else not use the technology.

Mark Roberti in his Opinion column (a regular must-read) suggests that it would be better for the industry for EPCglobal to go forward and ratify a standard even if it means companies have to pay Intermec's royalties. He believes the delay would be more harmful.

Although normally I agree with his views, on this I don't. Intermec is asking for some hefty fees. For small technology companies, those fees could be significant. The fees would have a particular chilling effect on startups and emerging businesses, stifling innovation. And while good for Intermec and the big companies for which the fees would be a mere rounding error, I don't see how that is good for the industry as a whole. I think Sue Hutchinson of EPCglobal nailed it with this comment:

"We remain committed to the objective of putting forth a royalty-free spec. The history of the last 25 years has proven that that's a great way to get the market economics jump-started."