EPCglobal, a joint venture between GS1 and GS1 US, is working on international standards for the use of mostly passive RFID and the Electronic Product Code (EPC) in the identification of many items in the supply chain for companies worldwide.
Gen 2 is the shorthand name given to the second generation EPC global protocol. It addressed the compatible problems in old tag class 0 and 1 and was designed to be globally accepted with enhancements such as a dense reader mode of operation, so as to prevent readers from interfering with one another when they are used in close distance to each other. It was later adopted with minor adjustments as ISO 18000-6C.
One of the missions of EPCglobal was to simplify the Babel of protocols prevalent in the RFID world in the 1990s. Two tag air interfaces (the protocol for exchanging information between a tag and a reader) were defined (but not ratified) by EPCglobal prior to 2003. These protocols, commonly known as Class 0 and Class 1, saw significant[clarification needed] commercial implementation in 2002–2005.
In 2004, the Hardware Action Group created a new protocol, the Class 1 Generation 2 interface, which addressed a number of problems that had been experienced with Class 0 and Class 1 tags. The EPC Gen2 standard was approved in December 2004. This was approved after a contention from Intermec that the standard may infringe a number of their RFID-related patents. It was decided that the standard itself does not infringe their patents, making the standard royalty free. The EPC Gen2 standard was adopted with minor modifications as ISO 18000-6C in 2006.
In 2007, the lowest cost of Gen2 EPC inlay was offered by the now-defunct company SmartCode, at a price of $0.05 apiece in volumes of 100 million or more.Nevertheless, further conversion (including additional label stock or encapsulation processing/insertion and freight costs to a given facility or DC) and of the inlays into usable RFID labels and the design of current Gen 2 protocol standard will increase the total end-cost, especially with the added security feature extensions for RFID Supply Chain item-level tagging.