RFID Law Journal

2007-03-16T15:32:00.000-07:00

Steps Toward a Policy Framework for RFID in Europe

RFID Law Journal
Newsletter No. 44
March 16, 2007

The Commission of the European Communities announced its much anticipated communication on steps toward a policy framework for radio frequency identification in Europe. You can read the complete file at the following link:

http://ec.europa.eu/information_society/policy/rfid/doc/rfid_en.pdf

In its view, RFID is a “gateway to a new phase of development of the Information Society.” The Commission recognized that the phase of wide commercial and public sector deployment is approaching, and with such wider usage, it felt obligated to examine the legal framework under which RFID takes place to ensure safeguards for fundamental “values, health, data protection and privacy.” As a result, the Commission carried on a public dialogue during 2006 with early adopters and concerned citizens with respect to its tracking applications. The goal is taking in the perceived large social benefits of RFID while simultaneously incorporating privacy, health and environmental safeguards.

The Commission noted that Europeans are leading the way with innovative applications of RFID, smart sensors and RFID-enabled actuators and intelligent networks, and it is generally believed that RFID could “further strengthen the role of information and communication technologies in driving innovation and promoting economic growth.” According to the Commission, while the European market for RFID systems is growing at approximately 45% annually, it is lagging a global growth rate close to 60%.

One of the major factors holding back growth is the absence of a “clear and predictable legal and policy framework” making this new technology “acceptable to users,” including clarity on ethical implications, privacy and security protection, governance of RFID identity databases, the availability of radio spectrum, harmonized international standards and concerns over health and environmental implications. The Commission launched a wide public consultation to address these issues in 2006 with thousands of participants contributing to the study. During the study phase, the Commission noted emergence of concerns over privacy and data protection, finding that “RFID will only be able to deliver its numerous economic and societal benefits if effective guarantees are in place on data protection, privacy and the associated ethical dimensions that lie at the heart of the debate on the public acceptance of RFID.” The Commission noted that EC’s strong tradition in support of data protection (the regulations are substantially more stringent than US regulations). Indeed, the Data Protection Directive is broad, and in the view of the Commission, applicable to all technologies, including RFID.

The Commission noted that a “one-size fits all” approach to RFID would not be appropriate, given that security and privacy risks depend, in large part, upon the nature of the RFID application. A CBA of specific security and privacy-related risks prior to selection of RFID systems and deployment of applications is necessary according to the Commission. In view of limited information available to the public at this stage of deployment, the Commission felt that awareness and information campaigns would be an important part of RFID policy response.

The Commission noted that most respondents were concerned that the registration and naming of identities in the “Internet of Things” be interoperable, open and non-discriminatory, and it believes that the policy principles developed in the context of the World Summit on the Information Society will be relevant to the emerging policy debate.

Easy mobility and low costs of RFID systems depend, in part, upon the availability of radio spectrum and harmonization of spectrum usage conditions. The Commission opined that the allocation of RFID frequencies in the UHF band will be sufficient for the purposes of the next 3-10 years, but noted that it will be necessary to monitor demand as usage of RFID increases.

The Commission discusses both environmental and health impacts implied by widespread usage of RFID. Noting that the electromagnetic fields related to RFID applications are generally low in power, the Commission stated that “exposure of the general public and workers to RFID-related EMF is expected to be well below the current standard limits.”

Over the coming two years, the Commission is expected to continue to analyze the options and respond to concerns expressed by stakeholders. The Commission will work with the US and Asian counterparts to strive toward global interoperability on the basis of “open, fair and transparent” international standards.

The Commission advocates “security and privacy-by-design,” i.e., privacy and security built into systems prior to their widespread deployment. The Commission supports the development of codes of conduct and best practices by experts representing all stakeholders along the lines of the strategy for a Secure Information Society set out in COM (2006) 251. By year-end, the Commission is expected to establish principles for public authorities and other stakeholders applying to RFID usage.

The Commission aims to further stimulate research on the security of RFID systems and privacy-enhancing technologies. In view of the limited experience with the technology, the Commission indicated that it is necessary to carry out in-depth overall evaluations of RFID implementation through large-scale pilots in specific application domains as a precursor to widespread adoption. The Commission also recognized the importance of standardization within Europe and the maintenance of a dialogue with counterparts in US, China, Korea and Japan to ensure cooperation on standards on applications such as the security of containers, counterfeiting, air transportation and pharmaceutical goods. By the end of 2008, the Commission expects to publish a Communication analyzing the nature and effect of developments, in particular with respect to privacy, trust and governance, and at such time, will assess whether it is necessary to propose further legislative steps to safeguard data protection, privacy and other policy issues.

While one could construe the Commission’s statement as a relaxed, wait-and-see approach supportive of RFID adoption (See RFID Update “EU Opts for Hands-Off Approach to RFID Regulation”- http://www.rfidupdate.com/articles/index.php?id=1319),
it is worth noting that the Commission has expressly reserved (and called for) assessment following further experience with the technology. Just like their American counterparts who must actively engage in the dialogue over data protection, privacy and other societal concerns with state (and federal) legislatures and educate the public about RFID, European stakeholders must vigilantly educate their public about the technology and its applications and take steps to proactively address privacy, data protection and other safeguards to ensure that the “helping hand” of government doesn’t hamper the rollout of RFID.

© 2007 – 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, financial 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.

2007-02-27T14:02:00.000-08:00

RFID - Don’t Fold Up Your Tent

RFID Law Journal
Newsletter No. 43
February 27, 2007

Kudos to Bill Hardgrave, Ph.D., Director of RFID Research Center, University of Arkansas, for publishing a rebuttal to The Wall Street Journal’s recent article entitled “Wal-Mart’s Radio Tracked Inventory Hits Static” (February 15, 2007) in a special edition to the RFID Product News published on February 23, 2007. You can access Dr. Hardgrave’s article through the following link provided by RFID Product News:

http://www.rfidproductnews.com/reader/spe01/articles/index.php#one

© 2007 – 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, financial 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.

2007-02-27T13:38:00.000-08:00

Border Tracking Efforts Abandoned

RFID Law Journal
Newsletter No. 42
February 27, 2007

Earlier this month, the Department of Homeland Security (DHS) abandoned its substantial effort to deploy RFID in connection with its US VISIT program based upon, among other things, inadequate read rates and the inability of the system to tie back the data with the individual carrying the tagged travel document.

The RFID application envisioned embedding a tag within the I-94 travel document, aiming to facilitate secure border entry/exit by foreign nationals. However, during the course of a 15 month study, it was found that the biometric identity-matching capability envisioned within the entry/exit security system was ineffective because the I-94 form couldn’t be physically tied to individuals. The GAO also cited examples of poor read rates at five ports of entry tested as part of the US VISIT program.

© 2007 – 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, financial 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.

2007-02-27T13:36:00.000-08:00

Final “Interim” DoD RFID Rule

RFID Law Journal
Newsletter No. 41
February 27, 2007

Effective as of February 12, 2007, the Department of Defense’s interim RFID rule, which had initially been proposed on May 19, 2006, became final, effectively extending its passive RFID tagging rules to additional classes of commodities as well as expanding from two U.S. depot locations to most locations in the 48 contiguous states. Our readers can access these rules and related comments at the following link:

http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-2209.htm

It should be noted that this latest iteration of the rules is merely finalization of an “interim” rule, and in the spring of 2007, it is expected that a new set of even more expansive rules will likely be put into effect as the Department of Defense rolls into the third – and final – year of its three year deployment effort. Now that the Department of Defense has, indeed, wired its U.S. depots, and has contracted for the wiring of its OCONUS depots, it is expected that the DoD will be administering ever more stringent requirements on its suppliers as it seeks to realize cost efficiencies with trading partners across its supply chain.

© 2007 – 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, financial 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.

2007-01-31T08:13:00.001-08:00

Benchmarking the National Animal Identification System

RFID Law Journal
Newsletter No. 40
January 31, 2007

The USDA is openly benchmarking its success in registering premises under the NAIS. Readers can note the progress of this program at this link to the USDA website: http://animalid.aphis.usda.gov/nais/premises_id/update.shtml. According to the statistical data set forth on the USDA website, 24.6% (i.e., 353,504) of the nation’s estimated 1.4 million livestock farms were registered in the National Animal Identification System as of January 29, 2007. The USDA defines a livestock farm as premises with more than $1,000 in annual income, and the total number of livestock farms is based upon an estimate of the National Agricultural Statistical Survey. The data counts premises with more than one species only one time. Wisconsin and Idaho represent the leadership in premises registration, with substantially all premises registered, and as of January, 2007, a majority of the livestock farms located in Indiana, Michigan, New York, North Dakota, Pennsylvania and Utah have registered themselves in the NAIS.

Some of the basic guidelines for registration can be found at the USDA’s website: http://animalid.aphis.usda.gov/nais/premises_id/index.shtml. The registration is free, and at present, it does not require participation in the other two components of NAIS – animal identification and animal tracking.

Since our last publication on the NAIS, the USDA updated its website. You can locate baseline information on animal tracing at this USDA link: http://animalid.aphis.usda.gov/nais/animal_track/index.shtml. Our readers can also find out more about animal identification at this USDA link: http://animalid.aphis.usda.gov/nais/animal_id/index.shtml. The USDA has formed working groups for different species and identified working group leaders, enabling information sharing, etc. Readers are invited to learn more about these working groups at this USDA link:
http://animalid.aphis.usda.gov/nais/species_work_groups/index.shtml.

In late January, 2007, the USDA also announced its endorsement of industry- recommended international standards for animal identification technologies. The USDA endorse the use of ISO 11784 and 11785, which would establish RFID technology standards for producers and service providers electing to use Radio Frequency Identification technology in NAIS. This will facilitate use of one reader to scan all Animal Identification Number (AIN) tags. However, the USDA is not requiring the use of RFID tags or implants. That decision is left to owners. It is also clear the USDA will continue reviewing other technology options over the horizon.
The USDA’s press release can be located through the following link: http://animalid.aphis.usda.gov/nais/naislibrary/documents/announcements/StakholderAnnouncement1_17_07.pdf.

© 2007 – 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, financial 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.

2007-01-23T19:31:00.000-08:00

Air Travel Rules for Western Hemisphere Travelers

RFID Law Journal
Newsletter No. 38
January 23, 2007

This is a short follow-up article to our Newsletter No. 37 (January 22, 2007). The Department of Homeland Security has released its official press release with respect to the new rules for air travel into the U.S. which became effective today. Initial signs suggest that most air travelers arriving in the US were aware of the new rules and came equipped with their travel documents.

You can read the DHS press release through this link:

http://www.dhs.gov/xnews/releases/pr_1169569034747.shtm

© 2007 – 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.

2007-01-22T07:59:00.000-08:00

New Rules Kick-in for Western Hemisphere Travel

RFID Law Journal
Newsletter No. 37
January 22, 2007

On Tuesday January 23, 2007, Canadian, Mexican and Bermuda citizens traveling by air, along with U.S. citizens, into the U.S. must, subject to few exceptions, provide border officials with a passport to gain entrance into the United States. This rule will bring our North American neighbors under the same rules applicable to all other worldwide travelers. In January, 2008 and June, 2009, the rules will expand to include land and sea entry, with the potential of clogging the borders.

Up until now, these Western Hemisphere neighbors typically were required only to display a birth certificate or driver’s license to gain entry into the U.S., but these more stringent rules were implemented following recommendations by the 9/11 Commission. The exception is the NEXUS Air card issued to frequent travelers and active members of the U.S. military. DHS is also considering the PASS Card as an alternative to the passport. A PASS Card is significantly less expensive than a passport, but it wouldn’t be accepted for other worldwide travel.

The new rule isn’t expected to materially impact business travelers, who usually carry a passport, but there is some concern that it could disrupt travel among ‘snow birds’ (e.g., the tens of thousands of Canadians who visit Florida and other sunny destinations each winter). It’s plausible that some jurisdictions, such as Puerto Rico and the U.S. Virgin Islands, will enjoy an incremental windfall because they’re exempted from the new rules.

While it’s certainly possible that the new rules may deter travel among some travelers, it could cause more American citizens over the longer term to procure and hold passports. At present, only 73 million citizens hold valid passports. If the supposition is correct, then the new rules will, in part, further enable e-passport deployment over the long haul.

You are invited to learn more at the State Department’s link:
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html.

© 2007 – 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.

2007-01-07T19:47:00.000-08:00

2007 Kick off – FDA Provides Draft Guidance for Industry & FDA Staff: RF Wireless Technology in Medical Devices

RFID Law Journal
Newsletter No. 36
January 7, 2007

On January 3rd, the FDA released for public comment purposes only a draft document on radio frequency wireless technology in medical devices. The FDA published this document to guide stakeholders in the development and evaluation of RF wireless technology with respect to medical devices. The rationale is providing guidance on the safe and effective use of RF wireless technology in medical devices (e.g., performance, data integrity, security, etc.). Among other things, the draft document provides examples of potentially problematic applications. The FDA provides recommendations, including consideration of issues in product design requirements, design verification and validation, and risk management processes.

You’re invited to learn more at the FDA link: http://www.fda.gov/cdrh/osel/guidance/1618.html. During the 90 day public comment period, the FDA invites questions through Donald M. Witters, Jr. at donald.witters@fda.hhs.gov. Interest parties may provide comments on the draft guidance document at: http://www.fda.gov/dockets/ecomments.

© 2007 – 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.

2006-12-31T07:17:00.000-08:00

A 2006 RFID Wrap-up

RFID Law Journal
Newsletter No. 35
December 31, 2006

The U.S. federal government played a significant role in driving RFID adoption in 2006 through its agency mandates, policies and spending decisions. A compliance-driven marketplace was particularly evident among DoD suppliers, who scrambled to educate themselves on the RFID and UID mandates. In 2006, it became evident that a number of other agencies will also play significant roles in establishing the timeline for adoption. While the federal government proved that it could promote the growth of RFID applications in 2006, industry participants faced initiatives, including those pertaining to privacy and data protection legislation, which could have tempered RFID’s growth in the coming years. The basic message - the industry must more effectively work with legislators to educate the public about the technology and its applications.

It seems likely that RFID legal developments in the coming year will probable follow a couple of trends established in 2006, including (1) expansion of the mandate-driven market, especially among DoD suppliers; (2) further adoption driven by government policies and spending decisions and (3) continuation of the privacy debate, which could potentially temper deployment decisions by government participants outside of basic supply chain applications.

We’d like to draw your attention to a couple of year-end overviews that may be of interest to our readers. RFID Product News provides a high level overview of legal issues for 2006. You can access this content at the following link: http://www.rfidproductnews.com/issues/2006.11/legal.side.php. RFID Update provides an interesting top 10 list for trends in the RFID marketplace observed in 2006. You can access this content at the following links:
http://www.rfidupdate.com/articles/index.php?id=1264
http://www.rfidupdate.com/articles/index.php?id=1266
http://www.rfidupdate.com/articles/index.php?id=1267

© 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.

2006-12-31T06:45:00.000-08:00

RFID Policy Memo Wired into DSCP Guidebook

RFID Law Journal
Newsletter No. 34
December 31, 2006

RFID Law Journal has confirmed with appropriate authorities that CP Memo 06-32 is now wired into the local Philadelphia Center DSCP guidebook. You can access the guidebook at http://www.dscp.dla.mil/contract/dgpa/dgpahome.htm. This development could be viewed as an additional indication that RFID is now part of every day business at the Department of Defense. Of course, contracting officers have always been required to follow applicable regulations, including the RFID mandate. Readers may recall that CP Memo 06-32 details more exacting procedures for allowance of a deferral or waiver and would appear to close systemic loopholes. The latest development reinforces the point that the passive RFID requirements are here to stay.

© 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.

2006-12-30T22:12:00.000-08:00

GAO Indicates Weakness in Border Security

RFID Law Journal
Newsletter No. 33
December 30, 2006

On December 6, 2006, the GAO published its report “Border Security: US-VISIT Program Faces Strategic, Operational & Technological Challenges at Land Ports of Entry”. While there are plenty of opinions on what this report means, you’re encouraged to read the full report at http://www.gao.gov/new.items/d07248.pdf.

There is certainly no ‘silver bullet’ for exit border procedures. Yet, with millions of us relying upon similar technology in our daily commutes (e.g., E-Z Pass), it doesn’t take a lot of imagination to understand why RFID represents part of an overall solution, given the significant demands on manpower and the ability of vicinity RFID systems to provide policymakers with critical leverage. While some shortcomings appear daunting at this stage, this is early in the game to cast a ballot against further experimentation with the applications of this technology in the context of improving border security systems.

As mentioned above, there is no shortage of opinions on what this GAO’s report means for border security or auto identification technologies. On December 15, 2006, the New York Times provided its color in a front page article entitled “U.S. Dropping Bid to Track if Visitors Leave.” On that same day, Washington Technology published “US VISIT Exit System Flaw: GAO,” which is found at http://www.washingtontechnology.com/news/1_1/daily_news/29857-1.html. On December 21, 2006, RFID Journal covered the report with its story entitled “GAO Report Highlights RFID Weaknesses in US-VISIT.”

© 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.

2006-12-30T19:13:00.000-08:00

DoD - Clarifying the Default Rule on Passive RFID Requirements

RFID Law Journal
Newsletter No. 32
December 30, 2006

We’ve made the point more than a few times this past year that the Department of Defense is moving from the “carrot” to the “stick” phase of its rollout of its passive RFID requirements. With the third year of its three year rollout just around the corner, it’s not surprising that the DoD capped off the year with yet another notice to its vendors that essentially requires them to validate in processing their orders that they are shipping in compliance with the DoD’s RFID requirements. The text of the notice can be read at the following link which is entitled “Attention DIBBS Vendors Including EDI Vendors – DIBBS Quote Form and BATCH File Format Change – Effective December 17, 2006” https://www.dibbs.bsm.dla.mil/Notices/msgdspl.asp?MsgId=66 .

This most recent notice follows other significant policy change notices which foreshadowed for serious, long-term vendors that attention to RFID is a pre-condition to doing business with the DoD. For example, see “Significant Revision to our Previous Notice on New Passive RFID Requirements Effective July 19, 2006” https://www.dibbs.bsm.dla.mil/Notices/msgdspl.asp?MsgId=55) and “Passive RFID Requirements (May 25, 2006)” https://www.dibbs.bsm.dla.mil/Notices/msgdspl.asp?MsgId=52.

© 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.

2006-11-01T07:39:00.000-08:00

Introduction of the RFID-Enabled Passport Card

RFID Law Journal
Newsletter No. 31
November 1, 2006

The Department of State recently announced a major step toward implementing its previously announced PASS (People Access Security Service) System aimed at facilitating expeditious, secure travel along the U.S. border. In October, 2006, the Department of State submitted for public comment a federal rule proposing the development of a card-format passport for international travel by U.S. citizens through ports between the U.S., Canada, Mexico, the Caribbean and Bermuda. The rule, which is expected to meet the documentary requirements of the WHTI (Western Hemisphere Travel Initiative),[1] was prepared by the Department of State with input from the Department of Homeland Security.

The rule calls for the creation of a “limited-use passport card” that would otherwise be subject to the same standards of a traditional passport. However, the passport card would be wallet-size, and according to the figures released in the Department of State’s announcement ($20 for an adult card and $10 for a child’s card, subject to a $25 execution fee) would be significantly less expensive for citizens to procure than a traditional passport.

The federal government expects to leverage RFID technology to facilitate linkage between the passport card and secure, U.S. government databases containing biographic information and a photograph. Under the currently proposed form, the passport card will not contain any personal information, and DHS will be responsible for implementing protective safeguards to ensure the integrity of the database.

The PASSport Card relies upon “Vicinity RFID,” which enables U.S. Customs and Border Protection officers to more quickly make critical decisions about travelers entering into the United States. Vicinity RFID is a recognized manpower enabler. DHS leverages its automation multiplier in a number of proven programs, including the FAST, NEXUS and SENTRI trusted traveler programs.[2] The most familiar example of Vicinity RFID is its usage in various highway toll systems. Vicinity RFID leverages one of the key attributes of RFID technology – the absence of a ‘line of sight’ requirement. It is believed that the PASSport Card will serve as a convenient and inexpensive means of identifying individuals (and their citizenships) frequently traversing our nation’s border.

For more information about this initiative (“Department of State to Introduce Passport Card”), read the following announcement at the Department of State’s website: http://www.state.gov/r/pa/prs/ps/2006/74083.htm. You may also view the proposed rule at www.regulations.gov and you can also learn more at the DHS and Department of State websites: www.dhs.gov and www.travel.state.gov.

© 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] WHTI is the federal governmental plan for implementation of a provision under the Intelligence Reform Terrorism Prevention Act of 2004 mandating citizens of the U.S., Canada, the British Overseas Territory of Bermuda and Mexico to carry a passport or other designated travel document establishing the holder’s identity and nationality for entrance into the United States.

[2] These programs include 250,000 participants. US VISIT has also issued more than 450,000 RFID-enabled I-94s, its standard arrival and departure record at US ports of entry.

2006-10-26T13:56:00.000-07:00

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.

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.

2006-10-26T10:22:00.000-07:00

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.

2006-10-25T17:45:00.000-07:00

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.

2006-10-20T06:47:00.000-07:00

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.

2006-10-16T11:20:00.000-07:00

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.

2006-10-13T06:21:00.000-07:00

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.

2006-10-05T07:53:00.000-07:00

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.

2006-10-04T13:49:00.000-07:00

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).

2006-10-03T09:50:00.000-07:00

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.

2006-10-02T08:19:00.000-07:00

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.

You can learn more about RFID legal issues at www.rfidlawjournal.com. You may contact our editor at editor@rfidlawjournal.com. This material is being provided for informational purposes only. Usage of this material is subject to the terms and conditions at www.rfidlawjournal.com. Among those conditions of use, you shall not reply upon information contained herein as legal or other advice, and you are expected to seek out your own trusted advice with respect to such matters.

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.

2006-09-28T09:51:00.000-07:00

DHS Deploys E-Passport Readers

RFID Law Journal
Newsletter No. 20
September 28, 2006

At San Francisco International Airport, the U.S Department of Homeland Security completed its deployment of e-Passport readers. This is the first deployment of such readers, and it is expected that the DHS will continue deploying these readers at several other U.S. airports in the coming weeks to satisfy the congressional deadline (i.e., October 26, 2006) which mandates comparison and authentication of data in e-Passports issued by Visa Waiver Program countries. The e-Passport reader deployment is viewed as 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. Valid e-Passports comply with ICAO (International Civil Aviation Organization) technical standards. 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 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.

2006-09-28T09:06:00.000-07:00

DoD Contractors Beware of the RFID Exemption Cramdown

RFID Law Journal
Newsletter No. 19
September 28, 2006

Subsequent to its July, 2004 issuance of its official policy of implementing passive RFID standards, the Department of Defense has been abundantly clear on the point that RFID, along with usage of the Wide Area Workflow (“WAWF”), will quickly shift into the standard means of its doing business. Electronic invoicing is “here to stay.” At this point, the DoD is shifting its policy from one of incenting its suppliers with carrots (e.g., vendors receive faster payment when they elect to do business electronically; certain vendors qualify for reimbursement of IT purchases, etc.) to one of punishing them with sticks (e.g., vendor scorecards, fines, etc.) Unprepared vendors disregard these new standards at their own peril.

Certainly some vendors are approaching RFID on an one-off basis, especially where their DoD business constitutes a small percentage of their overall business. For example, vendors dealing with small, infrequent shipments are trying out pre-printed labels (and buying a RFID reader for verification purposes), but such solutions are typically not very scalable, as these vendors run into higher clerical costs associated with manually keying in and sending advance ship notice (i.e., an ASN) to the WAWF. Automated RFID solutions are clearly the preferable choice, especially for parties selling to the DoD in volume (or supplying to multiple organizations requiring RFID tagging, e.g., Wal-Mart and the DoD), but notwithstanding the obvious benefits (including, for many vendors, a positive ROI), many vendors are seeking to defer incurrence of the cost. Over the past year, one of the favored approaches to “adoption” among some DoD vendors has been obtaining deferrals/exemptions from their contracting officers. The Department of Defense has taken steps to shutdown this loophole in lockstep with its expansion of its passive RFID shipment regulations.

As mentioned in prior newsletters, the Department of Defense initiated interim changes to the RFID DFAR in May, 2006, noting that it was now in the second year of its three-year passive RFID policy rollout. Having wired 20+ DLA depots and distribution centers for RFID[1], the DoD is now requiring its suppliers (shipping into these affected depots) to use passive RFID tagging in their shipments under its interim RFID rule. Given that the universe of affected depots is essentially all the depots located in the Continental United States (i.e.,10x of the number of the depots affected in the period of November, 2005 through June, 2006) and that the number of affected classes has also doubled, the interim changes to the RFID DFARs[2] are now impacting a vastly larger group of suppliers than at this time last year. The DoD has established policies at the contracting officer level which will make it increasingly difficult for its suppliers to defer committing to its electronic payment system (i.e., use RFID and the WAWF).

Companies doing business in volume with the DoD are learning that seeking waivers from contracting officers is no loner a viable option. New policies shift the burden clearly onto the vendor in the case of an opt-out, making it clearly more desirable from an administrative perspective to deal with RFID-compliant contractors. A contracting officer (under Contracting & Production Policy Memo No. 06-20 and Memo No. 06-32), must satisfy, in pertinent part, the following five (5) pre-conditions before granting a waiver of RFID requirements:

1) If a contracting officer receives no RFID-compliant offer, then the lowest evaluated offeror must be engaged in negotiations with respect to compliance with the RFID requirement.
2) The contracting officer must indicate in the file the non-existence of a RFID-compliant offer.
3) In the case of a “sole source,” the contracting officer must document that no other sole source is available and indicate that such is the reason for the waiver.
4) The contracting officer must conclude that failure to grant the exemption would impair the DSCP’s ability to support its mission.
5) The non-complying vendor must agree to a “get well” date for mandatory compliance and potentially provide a lowered price.

The mandatory DFAR 252.211-7006 (RFID) must be included in the contracts, even if a waiver is granted. A case-specific justification must be specified in the file. The contracting officer must also document the waiver/exemption in a letter to the contractor, with inclusion in the letter of contractor’s commitment to a “get-well” date. Failure to “get well” (i.e., adopt RFID for shipping to the DoD) is now viewed as the basis for a breach of contract. If, as of the “get-well” date, there is non-compliance, the contracting officer must document it in the file, resulting in a potential negative performance rating for future business with the government. The contractor must supply the “get-well” plan to the contracting officer, and it’s included in the file, too. All contracting officers must maintain records of waivers and exemptions so that DLA HQ can track these statistics. And there is a monthly reporting system to monitor these statistics. In short, the DoD has laid out significant incentives for contracting officers to seek compliance from the suppliers and punish non-compliant vendors.

We’ve included links to CP No. 06-20, CP No. 06-32 and the current RFID notice found on the DLA’s bid board system as an additional resource for readers.

May 9, 2006
Contracting & Policy Production Memorandum No. 06-20
Interim Guidance on Waiver of Passive RFID Requirements
http://www.dscp.dla.mil/contract/cp0620.htm

On July 17, 2006, the Contract & Policy Production Memorandum No. 06-32
(Subject: Radio Frequency Identification) was issued, incorporating CP Memo 06-20 into the DGPA. You can locate CP Memo 06-32 through the following link: http://www.dscp.dla.mil/contract/cp0632.htm.

DLA Notice – Passive RFID
https://www.dibbs.bsm.dla.mil/Notices/msgdspl.asp?MsgId=55

© 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 (including, without limitation, investment) 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] The contracts specify completion of hardware and middleware deployment by the end of September, 2006.
[2] See e.g., DFAR 211.275-2 and DFAR 252.211-7006.