IBM Wednesday said it has selected a Canadian company to manufacture a new type of RFID tag designed with consumer privacy in mind.
RFID (radio frequency identification) tags are being used to track items at the case and pallet level through supply chains. Big retailers like Wal-Mart have endorsed the technology, which is often cast as a replacement to bar codes, as a means to improve supply chain efficiency. There has been some resistance to allowing the technology to get too close to the end consumer because of the potential privacy ramifications.
RFID tags are capable of retaining a lot more information than bar codes. They can also be read from a distance – some estimates say as much as 30 feet – resulting in concerns that a person’s privacy could be compromised if they’re carrying an item with a tag attached.
IBM has invented a type of RFID tag called “clipped tags” that renders them useless and unreadable from a distance of more than a few inches by tearing off their edges. It’s as simple as opening a ketchup packet, according to IBM’s Paul Moskowitz, one of the tag’s inventors, who demonstrates the technology in this YouTube clip.
The first manufacturer licensed to produce this type of tag is Marnlen RFID, based in Markham, Ont. Marnlen, has been making labels since 1977 through its Labelad division, which produces labels for consumer products like mayonnaise containers and shampoo bottles. In 1981, it added its Sandylion brand, which makes stickers for children.
The company began to explore the possibility of making RFID labels last year, said vice-president of business development Andris Lauris. “We put the plan in place, and figured out what kind of equipment we need,” he said. Marnlen began production earlier this year and entered talks with IBM Canada to produce its tags soon after.
A number of Marnlen’s customers are working with RFID on the case and pallet level to improve their supply chain efficiency, “but there’s many of them that are talking to retailers – like apparel makers and pharmaceutical companies – that are having item-level discussions too.”
In the past, Ann Cavoukian, Ontario’s Information and Privacy Commissioner, has had concerns about the safety of putting RFID tags in stores. Her office produced a set of RFID guidelines earlier this year cautioning companies and consumers of their potential pitfalls. But she’s convinced the clipped tags are a worthwhile compromise between functionality and privacy.
“The clipped tag, by virtue of cutting the read range to inches, eliminates all those privacy concerns of surreptitious surveillance. However, it still affords the consumer the benefits of RFID post-sale,” she said. Those benefits include easier returns, the ability to recognize product recalls and observe warrantees.
“I don’t want consumers to be penalized because they’re having their privacy protected – you want them to have both,” she said.
“The technology is there, it’s been proven . . . it’s ready for prime-time,” added Shai Verma, IBM Canada’s RFID practice leader.
IBM Canada is headquartered in Markham, very close to Marlen’s facilities – a fact that helped to foster the relationship between the two companies, said Verma.
Despite the fact that clipped tags have been deemed save by privacy advocates, IBM is still cognizant that there may be skepticism in the public as to their safety.
“Every company needs to look at how RFID is going to be used. There are concerns from the public around how visibility will be created and who will have access to this information,” said Verma. “Every company needs to look at it themselves and ask if there’s a reason to be pursuing this.”
Marlen’s production facilities are ready to roll, but it may be some time before consumers are seeing their tags attached to products in stores. In most cases. the tags are still too expensive to attach to small consumer items, said Verma. But the economics will one day shift to make them more pervasive. “You could see it any time based on what our customer demand is.”