Verichip Buys ID Security Company

By Chuck Missler

VeriChip has a new name. The company famous for its development of RFID tags that can be implanted in humans has acquired Steel Vault Corporation, a provider of identity security products and services. Anti-identity-theft meet human microchipping. Together, VeriChip Corp and Steel Vault Corp are forming a new company called PositiveID.

For years radio frequency identification (RFID) tags have made product identification and inventory easier for stores. Farmers are injecting implantable RFID tags into their livestock in order to stem the spread of mad cow disease. If a diseased cow turns up, it can be easily tracked backward to every stockyard where it's been, all the way back to its home ranch. Pet owners have had their animals "chipped" so they can be identified by animal control and returned home if lost. From passports to pre-paid train and bus smart cards, RFID can be found everywhere.

Applied Digital Solutions' VeriChip has been marketed as a health care ID tag that is handy for quickly identifying at-risk patients if they show up at a hospital. A simple scan of the chip in a person's arm would bring up the patient's medical history at Health Link, helping hospital personnel to offer the best care to a patient, even if they're brought in unconscious. A recent VeriChip commercial promoted its rice grain-sized microchip as useful to Americans from all walks of life, from the diabetic to the driver whose car goes off the road.

Now, a Steel Vault VeriChip combo will be in a position to use chipping as a means to protect people from identity theft. Americans may resist the idea of having chips stuck in their arms, even to protect their identity, but the brains behind PositiveID have a lot of different plans in the meanwhile.

Scott R. Silverman, Chairman and CEO of PositiveID, stated,

"In joining these two companies, we believe we are better positioned to accelerate the development of our exciting diagnostic and sensor applications such as glucose-sensing, as well as our rapid virus detection system for the H1N1 virus and other pandemic viruses. By moving beyond the original patient identification application of our implantable RFID microchip technology, we believe that we will be able to get high-value products to market faster with a more efficient use of capital."

Of course, it's easy to imagine the eventual use of RFID technology to identify every human being in America and even the planet. It certainly could reduce the problem of ID theft if one's scannable ID was embedded in one's arm. No more stolen or lost credit cards. No more forgetting one's driver's license at home. At least, PositiveID could make that argument, and then hello Big Brother.

Orwellian fears are unlikely to be realized any time soon, though. The implementation of RFID technology has actually taken much longer than folks originally anticipated, and for a variety of reasons. Since 2003, Wal-Mart has pushed for its suppliers to include RFID tags on pallets and cases of products, but the costs to implement RFID technology has made the transition slow. Only about 600 of Wal-Mart's 20,000 suppliers are on board the RFID wagon so far, with others complaining not only about the expense of the readers, software, and tags (some still over $.07 each), but also about problems with the liquids and metals in their products interfering with the readers. Trying to integrate different technologies has also proved a pain in the neck.

The pharmaceutical industry has also been slow to implement RFID technology, even though it's been mandated by California law. Pharmaceutical companies in California are supposed to use RFID tags to keep track of drugs in order to improve safety and reduce counterfeiting, but the pharmaceutical industry has balked at the expense and complications of implementing a comprehensive system. Because of these difficulties, California has given the industry until 2015 to abide by its electronic pedigree law.

And as far as "chipping" humans? Some people think it's a jazzy idea and have had VeriChip injected under their skin for medical reasons or to avoid carrying their IDs (and wallets or purses) into nightclubs. A whole lot of people, though, have absolutely no intention of getting an implantable microchip – not under any circumstances. Not even when tempted by VeriChip's well made commercials.

Even with the complications of chipping everything, though, RFID is a growing business that has worked its way up from a $1.9 billion-a-year industry in 2005 to a $5 billion-plus industry today. And the biggest user of RFID technology are world governments. China just spent $6 billion to get its citizens RFID-tagged national id cards. The US government has been using RFID tags to keep track of military inventory, and since 2006 has put these microchips on passports. The UK and India are also chipping their passports, and pre-paid public transportation cards have long been using RFID.

The chipping of the world has been a slow but steady progression, and it doesn't promise to go away anytime soon, even with complaints and balking, inconvenience and negative public opinion. Whether for good or for bad, RFID is here to stay.

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