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DHS Grants Alien Subsidiary SAFETY Act Liability Coverage

Alien-owned Quatrotec, a provider of RFID-enabled baggage and cargo-handling systems, is now protected by legislation designed to help foster the development of anti-terrorism technology.
By Mary Catherine O'Connor
Aug 07, 2007Over the nearly six years since the terrorist attacks of Sept. 11, 2001, airport security has been at the forefront of homeland security issues for all U.S. citizens—and security in general, for all those who regularly travel by air. Well before the attacks, RFID was one of many technologies being designed into security applications for air-transport safety, product authentication, cargo-container security and other concerns. But after the World Trade Center attacks, myriad lawsuits—alleging everything from business interruption to wrongful death—were filed against a range of entities including airports, port facilities, security companies, building owners and airlines.

This fervor of litigation led to concerns among providers of such technologies as baggage-handling and inspection equipment, designed to help deter or prevent terrorist attacks: If another attack were to occur, would these providers and their customers be held liable?

To eliminate or significantly limit tort liability for companies whose anti-terror products or services fail to prevent, interdict or mitigate a terrorist act, companies that sell or use anti-terror solutions (including those leveraging RFID technology) can request tort liability protection from the Department of Homeland Security (DHS) under the Support Anti-Terrorism by Fostering Effective Technology (SAFETY) Act. The act was passed, in part, to encourage research firms and other developers of technologies that can be used in anti-terrorism applications to keep developing products without being sidetracked by liability concerns.

This bill was part of the Homeland Security Act, a larger package of legislation enacted in 2002. Few, if any, RFID technology providers have applied for protection under the law, but that could be changing. On Friday, Quatrotec, a wholly owned subsidiary of RFID hardware provider Alien Technology, announced that its baggage and cargo-handling services had been granted protection under the SAFETY Act.

Quatrotec, purchased by Alien in May of 2005, provides a range of security and baggage-handling services to airports, seaports and rail stations. Products and services utilizing RFID to provide auto-ID and track-and-trace for customer baggage or mobile assets make up roughly 20 percent of Quatrotec's business, says Matthew Connolly, the company's vice president of business development. Non-disclosure agreements, he states, preclude him from naming any specific airports or transportation companies currently testing or deploying Quatrotec's RFID services, though he does say the number has been growing steadily in recent years.

Connolly does note that the DHS has granted Quatrotec two separate protections under the SAFETY Act. For example, the company's non-RFID baggage and cargo-handling products and services, which use bar codes for identification, are now SAFETY Act-certified. Thus, if a party were to sue Quatrotec, citing failure of any such products in preventing an act of terrorism, Quatrotec would not be liable.

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