New High-Tech Device Tracks Goods and Merchandise By: Kathryn Ossian Miller, Canfield, Paddock and Stone, PLC (313) 496-7644 ossian@millercanfield.com A retailer knows the whereabouts of each item in its massive inventory—from the point of manufacture, to purchase by a consumer. A government logs the history of every transaction on each individual piece of currency. Weird science? Not really. These are just two potential uses of a new technology currently being tested known as RFID—Radio Frequency Identification. Is RFID in YOUR company’s future? What is RFID? An automatic identification system, RFID makes use of tags into which a microchip has been embedded. Affixed to an item, the microchip tag transmits a unique frequency and responds to a special radio frequency reader, allowing the user to access collected data stored inside, and track location. Smaller than a grain of sand, a RFID tag currently costs between 25 and 30 cents. But that cost is expected to fall to as little as three cents in the next few years—and many industries now are taking a closer look at the technology. What can RFID do? Retailers tracking in-store inventory can use RFID readers at the checkout counter—automatically charging a consumer’s credit card for purchases. Some clothing manufacturers are exploring the idea of washable RFID tags. The European Central Bank is looking at embedding RFID technology into Euro bank notes to record each transaction, and prevent money laundering or forgery. RFID technology is expected to create efficiency in supply-chain management by tracking inventory from creation through any point in the distribution system. Tire manufacturers may store identification information into each tire, using RFID tags. RFID could help libraries track book and other materials on loan to patrons. During the SARS outbreak in 2002, one hospital in Singapore placed RFID tags into employee and visitor ID cards to help prevent spread of the disease. Some casinos have embedded RFID into chips to track a customer’s gambling behavior and reduce employee theft. What are the legal considerations? Businesses should address privacy concerns before jumping on the RFID bandwagon. Several privacy watchdog groups have understandably raised the issue of misuse of the technology. Possible solutions include disabling the RFID technology at the cash register to alleviate consumer concerns that items could continue to be tracked after purchase—or devising a way for consumers to deactivate the tags once a purchase has been made. In light of national security and privacy concerns, there’s been a call for regulation and global standardization of all tracking technology—including RFID, cellular, and satellite. We’re ready to offer counsel on the legal issues related to RFID, or to assist in negotiating contracts with providers of the technology. Contact us if you’d like some help. Whistle While You Work Are Your Employees PIRATING Tunes on Company Computers? By: Kathryn Ossian Miller, Canfield, Paddock and Stone, PLC (313) 496-7644 ossian@millercanfield.com Kids aren’t the only ones using the Internet to download shared music files. Many adults are snagging melodic freebies too. And—if they happen to be working for your company, making use of your company’s network, and storing their purloined melodies on your company’s computers——you could wind up singing a less—than—happy tune. A number of Internet sites contain shared music files, and the technology to quickly download them is readily available. But just because the process is quick and easy doesn’t make it legal under federal copyright laws. Recently, music industry groups representing copyright owners (such as the Recording Industry Association of America) have been turning up the volume and asserting their rights under the U.S. Copyright Act. The RIAA has targeted individual file sharers, colleges and universities whose students engage in file sharing, and companies whose employees may be downloading music illegally. Already, a number of universities are advising their students that file sharing will result in the loss of Internet privileges—the University of Florida even created its own software program that shuts off network access after warning students who persist in downloading. What should you do to discourage the practice of pirating? Here are some steps you can take: Establish an enforceable company policy that prohibits downloading music and other copyrighted materials from the Internet, and allows your company to impose appropriate sanctions for violations Make certain each employee acknowledges and agrees to the policy upon hiring, or at the time the policy is introduced Periodically post reminders of your policy Review computer network logs to determine whether employees are visiting sites that offer shared music files Remove any shared music files you find on your company’s network Consistently impose sanctions for violations of your policy Employ the safe harbor provisions of the Digital Millennium Copyright Act to establish your company’s immunity If you’d like some assistance drafting or administering a policy that protects your company, we’d like to help. Please contact our office with questions.