Over 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.
The company’s RFID-based solutions have received only SAFETY Act designation. The difference between certification and designation under the act is that the latter grants a recipient company limited terror-related liability, capped by its insurance policy.
Since the SAFETY Act stipulates that the only proper defendant in any terror-related suit is the provider of the technology in question, Quatrotec’s customers would also be free of liability, whether the Quatrotec products they use are certified or just designated under the act.
Connolly says the DHS refused to grant Quatrotec’s RFID products SAFETY Act certification because of a lack of empirical evidence of the products’ effectiveness. This, he says, is due largely to the fact that the products are still relatively new. He adds that Quatrotec plans to ask the DHS to re-evaluate its RFID products for certification in the future, once those products are more mature and proven in the marketplace.
Quatrotec worked with the law firm Dickstein Shapiro LLP to apply for SAFETY Act coverage for its RFID and non-RFID products. The application process is long and detailed, Connolly says, and requires extensive documentation and testimonials. Brian Finch, the lawyer representing Quatrotec in the application process, says that because the certification and designation awards are handled on a product-by-product basis, the designation Quatrotec received does not cover all Alien products used in anti-terrorism applications.
“Say Alien had a tag it wanted to use for tracking nuclear weapons during transportation,” Finch says. “That product wouldn’t be covered under Quatrotec’s SAFETY Act designation.” Alien would need to apply separately for coverage of that product.
During a panel discussion at the RFID Journal LIVE! 2007 conference in Orlando, Ray Biagini, a partner with the government contracts and litigation group of McKenna Long & Aldridge, encouraged attendees to seek SAFETY Act coverage for any RFID products that could be or were already being used as anti-terrorism technology solutions. Biagini, an author of some key provisions of the act, told the audience, “Your products are being used in markets that are highly vulnerable to terrorism, and getting SAFETY Act coverage will provide you with a competitive edge [in the marketplace].”