Thursday, October 26, 2006

Most Visa Waiver Countries Meet e-Passport Deadline

RFID Law Journal

Newsletter No. 30

October 26, 2006

Washington, D.C. - A significant majority of the 27 Visa Waiver Program countries met today’s DHS deadline requiring issuance of e-Passports. Some 24 of 27 VWP countries[1] collaborated with U.S. officials toward a collective goal of issuing electronic passports. An e-Passport contains a contactless chip with the passport holder’s biographic information and biometric identifier (e.g., digital photo of the passport holder). VWP countries collaborated with US officials in an attempt to improve the security features for international travel documents and prevent their fraudulent use. DHS officials consider the usage of the e-Passport as a significant step toward shutting down the ability of terrorists and criminals to use false travel documents to facilitate free movement over borders. It is believed that the e-Passport will help prevent the use of lost or stolen passport by terrorists and criminals for entry into the United States.

At this stage, the U.S. is working with three VWP countries, Andorra, Brunei and Liechtenstein, to bring their e-Passport initiatives online. Until e-Passports become available, citizens of these three VWP countries will require a visa to enter the US to the extent that such citizens hold passports issued on or after October 26, 2006.

Other valid passports may be used by VWP country citizens for entry into the U.S., including machine-readable passports containing a digital photo issued prior to October 26, 2006 or a machine-readable passport issued prior to October 26, 2005.

VWP travelers can determine if their passports meet the new requirements at the following website: http://www.dhs.gov/xlibrary/assets/vwp_travelerguide.pdf. You can also learn more at two new websites supported by the Department of Homeland Security:

http://www.dhs.gov/xtrvlsec/programs/content_multi_image_0021.shtm and

http://www.dhs.gov/xtrvlsec/crossingborders/gc_1161636133959.shtm.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com/. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at http://www.rfidlawjournal.com/. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.




[1] Visa Waiver Program countries include the following 27 nations: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. 13 million people travel annually to the U.S. under this program to study, conduct business, visit family and holiday.

Smart Card Deadline Looms

RFID Law Journal
Newsletter No. 29
October 26, 2006

At the end of the week, federal agencies shall begin issuing new secure identity cards to millions of employees and contractors pursuant to a post-9/11 executive branch directive aimed at securing the federal workforce (See Homeland Security Presidential Directive-12). The government-issued “smart card” will be used to verify identities when employees (or contractors) enter a government facility or log onto its computer networks.

The government smart card identifies a person’s name and agency, and it contains an electronic chip with personal data, such as the carrier’s photo, two fingerprints, a special identification number and digital certificates facilitating his or her access to locations and computer systems.

Agencies have been required to issue the smart cards and install recognition software so that governmental employees can carry one identification card to access multiple offices / systems. IBM, Lockheed Martin, Northrup Grumman Corp., Accenture, Ltd., General Dynamics Corp., Bearingpoint, Inc., and Electronic Data Systems, Inc. are among the approved service providers for the installation projects at federal agencies.

The rollout, including the initial issuance of the smart cards and the upgrading of equipment required to read them, is expected to take several years.

For more information about the rollout or HSPD-12, you can read more at the following informational links:

“Homeland Security Presidential Directive-12 Policy for a Common Identification Standard for Federal Employees and Contractors” (August 27, 2004)
http://www.osec.doc.gov/osy/HSPD12/HSPD-12Information.htm

“Smart Card Activities of the NIST” (October 6, 2004)
http://www.technology.gov/Testimony/p_BHW_041006.htm

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.

Wednesday, October 25, 2006

More Progress with DHS E-Passport Reader Deployments

RFID Law Journal
Newsletter No. 28
October 25, 2006

Washington, D.C. - The U.S. Department of Homeland Security (DHS) indicated more progress in pushing the rollout of e-Passport readers, announcing that e-Passport readers are operational at Charlotte Douglas International Airport, Cincinnati/Northern Kentucky International Airport, Guam A.B. Won Pat International Airport, Houston George Bush Intercontinental Airport, Orlando International Airport, Orlando-Sanford International Airport and Toronto Pearson International Airport.

This latest rollout of e-Passport readers at U.S. ports of entry was made in preparation for an October 26, 2006 congressional deadline mandating that such ports of entry be capable of comparing and authenticating data in e-Passports issued by Visa Waiver Program (VWP) countries.[1] In late September, 2006, DHS completed deployment of e-Passport readers at San Francisco International Airport, and subsequently deployed these readers at Honolulu International Airport, Kona International Airport, Los Angeles International Airport, New York JFK International Airport, Newark Liberty International Airport, Washington Dulles International Airport, Chicago O’Hare International Airport, Hartsfield-Jackson Atlanta International Airport, Detroit Metropolitan Wayne County Airport, Las Vegas McCarran International Airport, Miami International Airport, Tampa International Airport and Phoenix Sky Harbor International Airport. DHS is reportedly processing travelers with e-Passports at all of these locations. This deployment is an ongoing process, i.e., the first in a series of steps toward further enhancement of security for international travel documents.

As of October 26, 2006, a VWP country citizen shall be required to carry a valid e-Passport to travel to the United States without a visa.[2] Valid e-Passports comply with ICAO (International Civil Aviation Organization) technical standards.[3] Pursuant to the requirements of the U.S. Border Security Act of 2002, the DHS is deploying e-Passport readers to U.S. ports of entry so that these ports can be capable of comparing and authenticating data from e-Passports by the congressional deadline. The U.S. port of entry inspection process is not expected to change for e-Passport holders, as U.S. Customs and Border Protection officials, equipped with the e-Passport readers, will be able to read the e-Passport chip at their inspection booths. VWP travelers can verify whether or not their passport meets the new requirements by locating the details at www.dhs.gov/interweb/assetlibrary/vwp_travelerguide.pdf.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.









[1] Visa Waiver Program countries include the following 27 nations: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. 13 million people travel annually to the U.S. under this program to study, conduct business, visit family and holiday.

[2] See U.S. Border Security Act of 2002.
[3] Over the past two years, the U.S. worked with ICAO and VWP countries on technical standards to enable deployment of interoperable readers at U.S. ports of entry.

Friday, October 20, 2006

More Progress with DHS E-Passport Reader Deployments

RFID Law Journal
Newsletter No. 27
October 20, 2006

The U.S. Department of Homeland Security (DHS) signaled further progress in its rollout of e-Passport readers at U.S. ports of entry in preparation for an October 26, 2006 congressional deadline mandating that such ports of entry be capable of comparing and authenticating data in e-Passports issued by Visa Waiver Program (VWP) countries.[1] In late September, 2006, DHS completed deployment of e-Passport readers at San Francisco International Airport, and since that time, DHS processed nearly 12,900 there. Last week, DHS announced that e-Passport readers had also been deployed at Honolulu International Airport, Kona International Airport, Los Angeles International Airport, New York JFK International Airport, Newark Liberty International Airport and Washington Dulles International Airport. Today, DHS announced the completion of its installation of e-Passport readers at several of the nation’s largest airports: Chicago O’Hare International Airport, Hartsfield-Jackson Atlanta International Airport, Detroit Metropolitan Wayne County Airport, Las Vegas McCarran International Airport, Miami International Airport, Tampa International Airport and Phoenix Sky Harbor International Airport. DHS is reportedly processing travelers with e-Passports at all of these locations. DHS will continue deploying e-Passport readers at several other U.S. airports in the coming weeks to satisfy the October 26th congressional deadline. This deployment is an ongoing process, i.e., the first in a series of steps toward further enhancement of security for international travel documents.

As of October 26, 2006, a VWP country citizen shall be required to carry a valid e-Passport to travel to the United States without a visa.[2] Valid e-Passports comply with ICAO (International Civil Aviation Organization) technical standards.[3] Pursuant to the requirements of the U.S. Border Security Act of 2002, the DHS is deploying e-Passport readers to U.S. ports of entry so that these ports can be capable of comparing and authenticating data from e-Passports by the congressional deadline. The U.S. port of entry inspection process is not expected to change for e-Passport holders, as U.S. Customs and Border Protection officials, equipped with the e-Passport readers, will be able to read the e-Passport chip at their inspection booths. VWP travelers can verify whether or not their passport meets the new requirements by locating the details at www.dhs.gov/interweb/assetlibrary/vwp_travelerguide.pdf.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.

[1] Visa Waiver Program countries include the following 27 nations: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. 13 million people travel annually to the U.S. under this program to study, conduct business, visit family and holiday.

[2] See U.S. Border Security Act of 2002.
[3] Over the past two years, the U.S. worked with ICAO and VWP countries on technical standards to enable deployment of interoperable readers at U.S. ports of entry.

Monday, October 16, 2006

Improving Your Firm’s Risk Management Profile with RFID

RFID Law Journal
Newsletter No. 26
October 16, 2006


Is your company considering deployment of a RFID, or other auto identification, system in support of its supply chain operations? If so, your company’s decision makers are usually tasked with identifying and evaluating ROI gains from such deployments. Most experts highlight the following as potential benefits:

-stock-out reductions,
-labor cost reductions,
-supply chain optimization,
-anti-counterfeiting,
-shrinkage reduction,
-spoilage reduction,
-payment optimization, and
-compliance (with mandates).

RFID gurus are typically well-equipped with pilots and studies supporting most of these rationales (e.g., Wal-Mart, etc.).

Your company's legal department may also help your firm identify another related gain from this early stage technology. Though not necessarily intuitive, RFID may serve as a “risk management” tool over the longer haul, and as such, could provide discernable benefits.

Ubiquitous deployment of RFID within your company’s (division’s) supply chain may, for example, provide your company (division) with ammunition to distinguish its valuable brands from “tainted” brands in the industry. (See RFID Law Journal Newsletters & Articles: “Making a Smart Investment in Your Company’s Supply Chain,” “Tracing the E.Coli Outbreak,” and “Products Liability Implications of Auto ID Deployments within the Aerospace Sector”). In the instance of major disruptions to a specific industry’s supply chain (e.g., tires, food (spinach), drugs, etc.), RFID could provide your firm with critical brand support at a time of crisis (for competitors). That translates into a competitive advantage, though its value may not be discerned for years.

RFID also equips companies with an important risk management tool in times of crisis. In the instance of an unsettling finding, RFID enables a management team to more quickly trace and track a problem within its supply chain (e.g., tainted goods, mislabeled products, etc.) and take action to minimize the risks for the company and the public, resulting potentially in a better brand protection and an improved public profile. After all, why amputate the patient’s leg if a far less intrusive method is available?

And if there are “commercially” available tools, such as RFID and other enabling technologies, to satisfy pedigree standards, it seems likely that stakeholders, including the trial bar and their clients (e.g., victims of mislabeled drugs, tainted food products, etc.), will be intensifying pressure on manufacturers to deploy such technologies to ensure supply chain optimization that falls on the right side of protecting the public’s health and safety.

While RFID isn’t necessarily a panacea for all of your company’s supply chain problems, RFID could provide your management team with a significant tool that reduces its long-term business risks. As such, it’s worth considering the opinions of your company’s risk management and legal departments when evaluating this IT deployment decision.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.

Friday, October 13, 2006

DHS Announces Further Progress in Deploying E-Passport Readers

RFID Law Journal
Newsletter No. 25
October 13, 2006

The U.S. Department of Homeland Security (DHS) signaled further progress in its rollout of e-Passport readers at U.S. ports of entry in preparation for an October 26, 2006 congressional deadline mandating that such ports of entry be capable of comparing and authenticating data in e-Passports issued by Visa Waiver Program (VWP) countries.[1] In late September, 2006, DHS completed deployment of e-Passport readers at San Francisco International Airport, and in the past two weeks, e-Passport readers were deployed at Honolulu International Airport, Kona International Airport, Los Angeles International Airport, New York JFK International Airport, Newark Liberty International Airport and Washington Dulles International Airport. DHS will continue deploying e-Passport readers at several other U.S. airports in the coming weeks to satisfy the October 26th congressional deadline. This deployment is an ongoing process, i.e., the first in a series of steps toward further enhancement of security for international travel documents.

As of October 26, 2006, a VWP country citizen shall be required to carry a valid e-Passport to travel to the United States without a visa.[2] Valid e-Passports comply with ICAO (International Civil Aviation Organization) technical standards.[3] Pursuant to the requirements of the U.S. Border Security Act of 2002, the DHS is deploying e-Passport readers to U.S. ports of entry so that these ports can be capable of comparing and authenticating data from e-Passports by the congressional deadline. The U.S. port of entry inspection process is not expected to change for e-Passport holders, as U.S. Customs and Border Protection officials, equipped with the e-Passport readers, will be able to read the e-Passport chip at their inspection booths. VWP travelers can verify whether or not their passport meets the new requirements by locating the details at www.dhs.gov/interweb/assetlibrary/vwp_travelerguide.pdf.



© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.


[1] Visa Waiver Program countries include the following 27 nations: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. 13 million people travel annually to the U.S. under this program to study, conduct business, visit family and holiday.

[2] See U.S. Border Security Act of 2002.
[3] Over the past two years, the U.S. worked with ICAO and VWP countries on technical standards to enable deployment of interoperable readers at U.S. ports of entry.

Thursday, October 05, 2006

RFID – A Better Way of Tracking Baggage

RFID Law Journal
Newsletter No. 24
October 5, 2006

On the heels of the major airline security disruption which arose during August, 2006, it probably comes as no surprise that the DOT’s monthly airline industry baggage report indicates that the mishandled baggage rates of major carriers rose approximately 25% from July, 2006 (6.5 per 1,000 passengers) to August, 2006 (8.08 per 1,000 passengers).[1] A few airlines reported increases of 35% or more. This significant increase in the mishandled baggage rate correlates directly to the sizeable increase in the number of checked bags, which, in turn, is tied to new transportation security measures. International travelers recall these security measures were effectuated literally “on the fly” in the midst of the latest terrorist threat uncovered by British authorities.

Fast-evolving security rules require 21st century solutions. As the airlines and the transportation infrastructure become equipped with more effective technology tools, it’s likely that many discontinuities will be managed more effectively in the future.

This most recent terrorist threat is just another twist in the unique and difficult operational environment for today’s air carriers. There is some hope that by deploying automated solutions, airlines will eventually manage these discontinuities more efficiently. Among other things, the International Air Transport Association (“IATA”) is currently rolling out an initiative to use RFID tagging systems to improve the tracking of passenger luggage. If successful,[2] this “Simplifying the Business” initiative could save the airline industry hundreds of millions of dollars annually.[3] Additionally, these RFID-enabled baggage systems will likely increase system speeds, lower maintenance costs, facilitate faster baggage identification, and reduce clerical costs. IATA members expect that their investments in automated baggage systems will not only improve their bottom lines but also improve their approval ratings with customers.

Customer satisfaction is perhaps the ultimate metric. In our post-9/11 world, American travelers face a number of inconveniences for the sake of improved security. If, by way of deployment of automated baggage solutions, airlines deliver to us a more convenient, efficient and trustworthy means of traversing our nation’s airports, then they’ll be giving the American public something to smile about.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com/. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at http://www.rfidlawjournal.com/. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.


[1] Based upon complaints about lost, damaged, delayed and stone baggage filed with the nation’s top 20 airlines. For more source information, you can read the DOT’s report online through the following link: http://airconsumer.ost.dot.gov/.
[2] Initial RFID pilots at McCarran International Airport (Las Vegas) and the Hong Kong International Airport are widely-cited as successful tests. A number of other international airports are scheduled for RFID deployments in the coming year.
[3] According to IATA reports, annual baggage loss is a $800 million annual expense incurred by the industry.

Wednesday, October 04, 2006

RFID Get Well Programs

RFID Law Journal
Newsletter No. 23
October 4, 2006

No more dragging your feet, DoD contractors…no more procrastinating… The verdict of one very important end-customer, the Department of Defense, is now “in.” Earlier today, RFID Update advised industry watchers of an imminent announcement by ODIN Technologies of its completion of the RFID wiring of 19 CONUS (Continental United States) depots (including 69 facilities in total).[1] What does that mean for the average DoD contractor? In all likelihood, it means that now is the time to “get well” and jump onto the RFID bandwagon.

Indeed, as a result of a 5-step “exemption/waiver” process, the DoD’s contracting officers are no longer able to merely grant a non-compliant party (even a sole source contract) an exemption from the DoD’s passive RFID tagging requirement. In most cases (other than for certain excepted classes of goods), DoD contracting officers must notify suppliers that the use of passive RFID tagging in connection with the delivery of goods into (most U.S.) depots is a contractual condition. If your organization is unprepared to do so (and as such, requires an exemption or waiver), your DoD contracting officer will be obligated to screen your contract (i.e., using the 5-step process described in our newsletter “DoD Contractors Beware of RFID Cramdown”) and require your organization to “get well” as a contractual condition. Pursuant to this requirement, suppliers must prepare a RFID-compliance plan specifying the steps to be taken to ensure RFID compliance. A Defense Department supplier’s failure to prepare and follow through on a RFID Get Well Plan may constitute a breach of contract, which could negatively impact its vendor scorecard and could result in serious fines.

In lieu of dwelling on the DoD’s requirement (and thinking about it as yet another cost of doing business), your organization should think about developing a RFID Get Well Plan as the initial step in the process of identifying the key benefits of RFID deployment. If the contractual relationship (with the DoD, Wal-Mart, etc.) accounts for a meaningful percentage of your company’s overall sales, chances are that RFID compliance may represent a significant intrinsic benefit. Quick attainment of RFID compliance could competitively position your company’s sales force vis-à-vis your competition.[2] There will certainly be “winners” and “losers” in this compliance game. Whereas a successful RFID Get Well Plan will doubtlessly position some organizations for improved relationships with the DoD (and others), some organization will undoubtedly fail to create and implement a RFID Get Well Plan, resulting in a competitive disadvantage.[3]

As an organization considers ROI benefits, many will identify other potential gains, including stock-out reduction, labor cost reduction, supply chain optimization, anti-counterfeiting, shrinkage reduction, spoilage reduction, payment optimization, etc. What can be gained will depend upon a number of characteristics, including your company’s existing infrastructure. In terms of benefits, don’t forget the obvious one – compliance. Compliance = better business relationships with key customers (i.e., the DoD, Wal-Mart, etc.)!

Be wary of cutting corners, especially if the DoD (or Wal-Mart, Target, etc.) is a significant portion of your organization’s business. While it’s tempting to defer making an investment in RFID through deployment of partial solutions (i.e., to save money short-term by deferring the cost of deploying a RFID system),[4] the RFID requirements are not going away (and if anything, the requirements will be expanding to all DoD operations as the DoD enters the third year of its rollout of the passive RFID requirement) and exemptions / waivers are not an effective mechanism for deferring deployment costs.

If doing business with the DoD (or other organizations with similar requirements) is important to your organization’s success, it would behoove your organization to assemble the right players within and outside of your organization (e.g., government sales, IT, RFID experts, etc.) to consider your organization’s RFID options carefully. Outside experts can be indispensable in helping you put together your company’s RFID Get Well Plan. Get going…and good luck!

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at www.rfidlawjournal.com. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.




[1] For more details about RFID Update’s breaking story “RFID Deployment at DoD Complete First Phase,” click through to the following link: http://www.rfidupdate.com/articles/index.php?id=1217.
[2] Don’t under-estimate the time required to deploy a RFID system.
[3] For example, Lockheed Martin and Boeing are among the earliest adopters and most aggressive deployers of RFID technology. Clearly, the DoD is a vital aspect of their future businesses, and they are certainly using their RFID expertise as a competitive advantage over their competition.
[4] For example, some suppliers are purchasing pre-printed tags and a RFID reader (used to verify the tags at the point of shipment) to enable sending a shipment to a depot or distribution center. However, as suppliers are quickly finding out, it’s extremely difficult to rely solely upon this solution for volume shipments. Not only does such solutions fail to yield many of the ROI benefits typically identified as evolving out of the deployment of an automated RFID system, but also require extensive labor because it requires manual entry of the ASN into a WAWF system (i.e., clerical time for each shipment).

Tuesday, October 03, 2006

RFID – Making a Smart Investment in Your Company’s Supply Chain

RFID Law Journal
Newsletter No. 22
October 3, 2006

Our headline could’ve been “Making a Smart Investment in Your Industry’s Supply Chain”; however, corporate actors usually won’t individually undertake costly measures unless such adoption is part of implementing an industry standard. Is this true even if an industry’s viability/survival is at stake? Apparently so. Historically, when it comes to the safety and security of the U.S. food and drug supply chains, industry standards often arise out of regulations, not self-regulated best practices.

The FDA has done little to encourage the food and drug companies to deploy auto identification technologies in connection with improving their health and safety best practices.[1] On their own initiative, leading food and drug manufacturers haven’t shown many signs that mass deployment of auto ID technologies is coming anytime soon.[2] The stakeholders are adopting these technologies slowly, notwithstanding a number of discernable, positive ROI benefits (e.g., improved visibility of objects within the supply chain, speedier and less costly product recalls, better risk management, etc.). While the instances of tainted goods may be infrequent within the U.S. food and drug supply chains, the massive downside of any related bad publicity evolving out of the rare instance of tainted goods should be taken into account as part of industry risk management calculus and, in light of the recent E.Coli outbreak of late August 2006-early September 2006 attributed to “tainted” spinach, may be reason enough to shift the tide of opinion within industry leadership.

Had spinach growers and their distributors (and regulators!) made smarter choices in favor of technological deployments supporting their supply chains, the industry would’ve probably been better positioned to address the recent E. Coli outbreak. Better tracking tools would’ve presumably enabled public health authorities to track the source of the E.Coli outbreak faster and enabled innocent industry stakeholders to defend their brands by quickly and definitively pointing to the results of federal health investigators. Unfortunately, timing is everything in the 21st century. As of late September 2006 (weeks after the announced outbreak!), innocent industry stakeholders can now rely upon the results of health investigations to support and reinvigorate their spinach brands; however, over the past few weeks, these stakeholders lost a substantial percentage of their inventories and exposed their brand reputations.

Now re-wind the clock a few weeks. Imagine being one of a few companies equipped with a technology that could definitively rule out a health concern. That’s not only a branding opportunity. It’s an opportunity to gain sizeable market share from competitors.

From 2001 to 2005, spinach growers reportedly doubled acreage from 15,000 to 31,000 acres to purportedly meet the demand for pre-washed, packaged spinach – i.e., packaged products ideally suited for the grocery aisle! Presumably, with the benefit of hindsight, stakeholders would’ve opted for a modest RFID infrastructure investment to coincide with their not insubstantial core investment in their spinach patches.

© 2006 – RFID Law Journal, LLC. All rights reserved.

Learn more about RFID legal issues at http://www.rfidlawjournal.com/. You may contact our editor about this publication at editor@RFIDLawJournal.com. Usage of this material (and any linked materials provided by third party sites) is subject to the terms and conditions set forth at http://www.rfidlawjournal.com/. You may not rely upon any material provided herein as legal or other advice. You should consult your own advisor (legal, investment or otherwise) with respect to the advisability or accuracy of any of the material provided in this newsletter or any other material provided by us. We are not responsible for and do not attest to the accuracy of any third party content.


[1] We’ve extensively written about FDA pedigree rules. While we (and the affected industries) recognize that pedigree is the future, it’s worth noting that the regulators and impacted industries are seemingly taking, at most, baby-steps toward adoption of the technologies required to make pedigree a reality within the supply chain.
[2] Note: Several drug companies have held early stage RFID pilots, but it does not appear likely that the industry will deploy across their supply chains until the next phase of adoption.

Monday, October 02, 2006

California RFID Legislation Vetoed as "Premature "

RFID Law Journal
Newsletter No. 21
October 2, 2006

The California Governor declined to sign legislation which would've likely slowed the development and evolution of RFID in the nation's largest state economy. A number of RFID industry supporters were critical of this legislation, though it had passed by a 30-7 majority vote of the legislature.

In our editorial, we had criticized the proposed legislation for a number of reasons. This legislation did not appear necessary given the protections afforded by existing privacy and data protection laws. Additionally, the legislation would have made it extremely difficult for a nascent industry to make a business case for its products; among other things, the legislation would have required 'human' involvement in a number of situations, and as such, would have potentially undermined the business case for using an automated solution.

Notwithstanding the seemingly strong support (30-7 vote) for this RFID legislation by the California legislature, a number of stakeholders, including RFID participants, maintain a strong vested interest in the health of the RFID industry. California is a key incubator state for nascent technology companies, and not surprisingly, a number of leading RFID vendors, including Alien Technologies, Inc., maintain a significant presence there.

In his press release, the California Governor indicated that it would be "premature" to legislate.
You can read the Governor's press release at: http://gov.ca.gov/pdf/press/sb_768_veto.pdf.

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You can learn more about the California RFID Legislation at the following link to an article by RFID Update “California RFID Restrictions Get Governor’s Veto.”
http://www.rfidupdate.com/articles/index.php?id=1218.