By now you've probably seen the news: last week EPCglobal ratified the so-called Gen 2 Electronic Product Code standard.

EPCglobal says the standard is royalty-free, meaning that RFID vendors that produce tags and readers based on the standard will not have to pay royalties to companies such as Intermec, which had claimed the standard infringed its intellectual property. According to this article in the RFID Journal (one of the best articles to date on this topic, I think), EPCglobal's "lawyers concluded that Intermec's patents are not essential to implementing the standard and therefore the standard is royalty-free."

But is it really royalty-free?

Apparently Intermec still thinks its intellectual property rights will be infringed by any company offering UHF RFID products. The same RFID Journal article quotes an Intermec spokesperson as saying: "We believe companies who offer UHF RFID products will still require a license to use Intermec intellectual property. In addition to the IP claims included in the Generation 2 standard, Intermec holds more than 125 additional UHF RFID patents."

It was admirable that EPCglobal attempted to come up with a royalty-free standard. But this sure sounds as if they rushed to adopt a standard just in order to say they met their goal by the end of the year.

And perhaps they were faced with a problem that was unsolvable, anyway. I mean, if you were the CEO of Intermec, would you have agreed to just give up your claims and throw them into the pot if they were truly valuable? Probably not. And no amount of time was likely to change your views.

And you know what? If I were a shareholder of Intermec, I would be applauding its CEO right now.

At the same time, I would want Intermec to be very reasonable in negotiating royalty arrangements. If you make it prohibitive on the industry to use your technology, they're likely to just go around you and develop something new. I've had experience with such maneuvers in my career. Many paths can lead to the same destination. Patents typically don't cover the same end result if it is achieved through an entirely different means.

Bottom line: tag and reader vendors would be wise to walk carefully with the advice of their own intellectual property counsel on this issue. Don't be lulled into a false sense of security by optimistic news reports.