Microchips Under the Skin Offer ID, Raise Questions

Picture a chip the size of a grain
of rice that can be injected into your body and give detailed
information about you to anyone with the right scanning
equipment

Picture a chip the size of a grain
of rice that can be injected into your body and give detailed
information about you to anyone with the right scanning
equipment.

A scene from a bad science fiction film? A radical research
project in some secret government laboratory?

The chip is neither fiction nor obscure science, but
instead it is a soon-to-be-marketed product ready to make its
way to customers in the year ahead.

The use of high-powered chips melded to the body has been a
recurrent theme of sci-fi from the 1984 cyberpunk novel
”Neuromancer” to the 1999 blockbuster film “The Matrix,” but
the announcement of a commercial-ready product by Applied
Digital Solutions (Nasdaq:ADSXnews) this week will focus real-world
attention on the potential and risks of such technology,
experts said.

Designed to store critical personal medical data, the chip
could mark the start of a more urgent debate about potential
privacy invasions at a time when privacy advocates are on the
defensive over anti-terror initiatives after Sept. 11.

“It’s certainly going to raise issues that we haven’t dealt
with before,” said Stephen Keating, executive director of the
Denver-based Privacy Foundation.

Such radio-activated chips are already used to track
cattle, house pets and salmon.

But this would mark the first attempt to apply the
technology to human beings, offering a potentially
controversial means for hospitals to “scan” patients in
emergency rooms and for governments to pick out convicted
criminals.

Applied Digital said Wednesday it would begin marketing its
implantable VeriChip in South America and Europe, initially as
a means to convey information about medical devices to doctors
who need a quick way to find out how and where patients with
pacemakers, artificial joints and other surgically implanted
devices have been treated.

When activated by a radio scanner, the chip would emit a
radio signal of its own from under the skin that would transmit
stored data to a nearby Internet-equipped computer or via the
telephone, the company said.

The chip itself could be implanted in a doctor’s office
with a local anesthesia and the site of the injection could be
closed without stitches, it said.

But the company already has its sights on more ambitious
applications for the chips, which are currently capable of
carrying the equivalent of about 6 lines of text. Future
versions could emit a tracking beacon or serve as a form of
personal identification, an executive said.

“There are enough benefits that outweigh the concerns
people have about privacy,” said Applied Digital Chairman and
Chief Executive Richard Sullivan.

Other experts remain skeptical, citing immediate practical
problems, such as the need to set standards that would make
such chips more universally readable, and longer-term concerns
over civil liberties.

Even so, such implants are certain to become more
widespread, said technology forecaster Paul Saffo.

“Of course, we will do this,” said Saffo of the Silicon
Valley-based Institute for the Future “And it won’t be just for
the functionality. It will also be for fashion. You’ve got a
generation that’s already piercing themselves. Of course,
they’re going to put electronics under their skin.”

TOUCHED BY A DIGITAL ANGEL

Applied Digital, which has a $95-million market value and
has been scarcely followed on Wall Street, plans to file an
application with the Food and Drug Administration (newsweb sites) in January to
market the chip in the United States, a process that could take
another year to 18 months, Sullivan said.

The Federal Communications Commission (newsweb sites) has already licensed
the chip’s use of radio frequencies because of an existing
version used to track runaway pets, said Sullivan.

The Palm Beach, Fla.-based company is just coming through a
two-year-long restructuring, reorganizing a far-flung
telecommunications business around a patent it acquired in
December 1999 for a transmitter that could be implanted in the
body and powered by muscle movements.

The first related commercial application was a
remote-monitoring device called Digital Angel, introduced at
the end of November, which combines a wristwatch-like sensor
linked to a wireless transmitter and a global positioning
system.

The device can transmit information on body temperature,
pulse and location and has been sold as a way to track
Alzheimer’s patients and children who might wander from home.

The company has also won a three-year trial contract with
California to supply a version of the product that would track
paroled prisoners in Los Angeles and alert authorities when
they had violated the terms of their parole by leaving a set
area.

Sales of the new implanted chip could total $2.5 million to
$5 million in 2002, Sullivan estimated, a small fraction of a
potential market the company has projected could be worth $70
billion or more.

Wall Street is excited about the chip. Applied Digital,
which saw its stock rise 18 percent to 45 cents on the Nasdaq
on its initial product announcement on Wednesday, is in talks
with major pacemaker manufacturers about a joint-marketing plan
that would see the VeriChip implanted at the same time as the
heart-regulating devices, he said.

Some see new opportunities for high-tech security after the
hijacking attacks on New York and the Pentagon (newsweb sites) killed nearly
3,300 on Sept. 11. The attacks brought new support for the use
of such technology by government and more interest in its
future commercial applications, Sullivan said.

“People are becoming less concerned about what information
is out there,” he said.

Erwin Chemerinsky, a civil rights expert and law professor
at the University of Southern California, conceded that the
public mood has shifted, but said: “It all depends on how this
is used … when the government is invading the body there are
always special privacy concerns.”

“This is rightly going to prompt debate, as you can
imagine, but the good news is that we’ll have years to figure
it out,” said futurist Saffo.

Author: Kevin Krolicki

News Service: Reuters

URL: http://dailynews.yahoo.com/h/nm/20011222/tc/bizchips_dc_1.html