The US Department of Justice Gives a Blessing To A Patent Pool

The RFID Consortium, a consortium of companies that own radio frequency identification (RFID) patents, has announced that the US Department of Justice has issued a positive Business Review Letter (link) relating to the Consortium's proposed licensing arrangement.

Selected extracts of the Letter:

• "The Consortium's pool appears reasonably likely to yield some tangible cost savings by limiting the threat of hold up and royalty stacking and by lowering transaction costs. " (emphasis added)


• "Lowering Transaction Costs. The pool likely will reduce transaction costs for both licensors and licensees. Its efforts to identify patents essential to the practice of the Gen-2 standard and to disseminate this information offers savings in search costs to licensees."(emphasis added)


• "Similarly, the pool likely will reduce costs for licensors. Members would no longer face the expensive and time-consuming tasks of searching out manufacturers who are using those members' intellectual property, or negotiating individual licenses. Instead, they would reap the cost savings of centralized licensing and would realize an immediate return on their intellectual property."

Other extract originating from the conclusion of the Letter:

• "Based on the information and assurances you have provided, the Consortium's proposed pooling arrangement appears reasonably likely to yield efficiencies. It includes safeguards reasonably tailored to minimize the risk of harm to competition by producers of products compliant with the Gen-2 standard or by technology holders and to minimize the risk of dampening innovation incentives. Therefore, the Department has no present intention to take antitrust enforcement action against the conduct you have described."

NB: The licensing agreement will be managed by Via Licensing.