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Chris Diorio, CEO of Impinj, at the 2018 GeekWire Summit. (GeekWire Photo / Kevin Lisota)

Impinj is suing one of its top competitors, alleging that Dutch semi-conductor giant NXP copied patents and designs for the Seattle company’s tiny chips that connect billions of items to the internet.

Impinj CEO Chris Diorio announced the patent infringement lawsuit Thursday in a letter to RAIN RFID, an alliance co-founded by Impinj in 2014 to spread awareness of the radio frequency identification technology that powers the chips Impinj makes, also known as “endpoint ICs.” Impinj alleges that NXP is infringing on 26 patents including a diagnostic system for checking the health of the chips and features that make them more durable and accurate when tracking items as they travel through the supply chain.

In addition to the patent infringements, Impinj alleges NXP also infringed on circuit designs that allow the chips to be so small, roughly the size of a grain of pepper. Diorio wrote that NXP has resisted efforts to work out the dispute.

“For two years we have tried to resolve this matter out of court. Disappointingly, NXP repeatedly refused to meet with us to address the issue,” Diorio wrote in the letter. “Consequently, we were left with no choice but to file this lawsuit.”

NXP issued the following statement: “NXP acknowledges that Impinj filed suit against NXP on June 6th in U.S. District Court. NXP disputes the allegations made by Impinj and intends to vigorously defend its products. As a matter of policy, NXP cannot comment further on any specific aspects of the litigation.”

Jeff Dossett, Impinj’s executive vice president of sales and marketing, said the company is seeking damages on all of NXP’s connected chips that violate its patents. Impinj is asking for an injunction to halt sales of one of NXP’s newest chips, the UCODE 8 series.

Dossett claims Impinj doesn’t want to disrupt the supply chains of its partners and customers who might be using NXP’s chips, so it isn’t attempting to stop sales of NXP’s most popular RFID offerings. Impinj wants to continue to compete on the merits, Dossett said, but it wants to make sure all players in the increasingly competitive market are following the rules.

“In addition to wanting NXP to stop copying Impinj’s patented inventions, we really do want to affirm the importance of fair and lawful competition, and at the same time we want to set a standard of mutual respect for everybody’s patented inventions,” Dossett said.

Impinj calls itself the market leader in its industry. While current market share figures are hard to find, Impinj said prior to its IPO in 2016 that it commanded 65 percent of the market for connected chips and 61 percent of the market for chip readers.

Impinj has been on a roll lately, starting the year off with a sterling earnings report in April. Its stock is up 71 percent so far this year.

In March, Impinj introduced what the company called it’s most exciting new product in a decade: smaller, more powerful RFID tags.

NXP, which refers to itself as the “world’s #1 Global Identification leader in RFID,” is a much larger company than Impinj, reporting $9.4 billion in revenue in 2018, versus $122.6 million for Impinj. Qualcomm was on the verge of acquiring NXP last year before Chinese regulators scuttled the deal.

“It is disheartening to me to see a large company copy the patented inventions of a small, creative company like ours. Impinj is passionately inventive,” Diorio wrote in the letter. “Our more-than 250 issued and allowed patents are the hard-earned fruits of that passion and our significant investment, dedication and sheer hard work.”

Editor’s Note: This story has been updated with a statement from NXP and the court filing.

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