Mar 19, 2002 -

By Doug Brown
Small Times Correspondent

March 19, 2002 - A Florida company is developing an implantable, sensor-spangled microchip that can communicate the wearer's location, pulse, body temperature and other data.

This type of sensor could be welcome news for health care professionals charged with caring for wandering Alzheimer's patients, parole officers and even as a safeguard against the wave of kidnappings in South America, developers say.

But privacy groups, worried about the potential for misuse, call it a slippery slope to Big Brother. And some Christian groups call it the "mark of the beast."

Applied Digital Solutions (Nasdaq ADSX) in Palm Beach, Fla., already sells an implantable microchip called Verichip that contains information about its wearer, such as allergies or medical conditions. It also sells Digital Angel, a wearable constellation of sensors that link to the Global Positioning System network and that send off alarms if, for example, its wearer wanders beyond a designated boundary or falls down.

Now, the company is toiling to combine the two products, to take the technology "beyond the watch and pager device to a technology that can be implanted under the skin, similar to the technology of a pacemaker," said Keith Bolton, the company's chief technology officer. Originally, he said, the company steered clear of the implantable sensor-filled device because research showed that the market for wearable devices alone was enormous.

But intense interest in South America, stemming from the rapid acceleration of kidnappings in different countries, is causing the company to "rethink" its position, he said.

"It is conceivable that a product like this, with the right demand and in concert with any government regulation or state and federal issues, could be in the marketplace sometime in 2003," he said.

In the United States to date, the only regulatory hurdle for the future product would be passing Food and Drug Administration muster.

Bolton said that today's Digital Angel products use the smallest GPS receiver on the market, measuring about 1 inch by 1 inch in diameter. The GPS component of the product delivers information about the location of its wearers to the Digital Angel system.

A sensor in the current products can sound alarms when wearers cross geographic boundaries, such as a five-mile radius perimeter. The criminal justice industry has shown interest in the technology for prisoners under house arrest or on parole, Bolton said. It's also perfect for sufferers of Alzheimer's disease, who often wander from homes and hospitals and get lost, and for parents to attach to children.
Another sensor passes along body-temperature information. In development are sensors that will send vital sign information like pulse, blood oxygen and glucose levels, Bolton said.
Taking advantage of MEMS technology has been key to the success of Digital Angel, said Peter Zhou, the company's chief scientist.

MEMS, he said, "will be even more important in the future. We are still not happy with how small we are. We want to go further."

To date, the company used MEMS technology in the construction of the Digital Angel chip. It's also the backbone of a sensor that measures acceleration.

"When you move, you accelerate, and this chip measures it," he said.

Zhou said MEMS will dominate the development of the product as the company works to increasingly shrink its product line while affixing it with more and more sensors.

All of the information is forwarded to a Digital Angel network, comprised of proprietary middleware, which holds the data in real time and can interface with all of the wireless devices on the market today, Bolton said.

The system, he said, gives tracking control to the individual, "so you the caregiver can actually log on with a PDA and a common browser (or over a telephone line) and see the information," he said. As a result, he said, the company does not need to have command centers staffed with people responding to alerts.
A mapping protocol that links longitude and latitude information with mapping information across the globe makes the product especially unique, he said.

"It doesn't matter if the person is in Indiana or Brazil or England, we have the ability to see that information, not only in a freeze-frame capability but in real motion," he said.

Thousands of people around the world have ordered Digital Angel products, Bolton said. The product was in development for roughly two years and was introduced into the marketplace late last year.

Applied Digital stock closed Monday at $0.45 a share, down from a 52- week high of $1.75 last April. The company posted annual revenues of $260.1 million in 2000, down from $336.7 million in 1999.

Applied Digital announced late in 2001 that Digital Angel would be set up as a separate company under an agreement with Medical Advisory Systems calling for Applied Digital to own 80 percent of the company.


The combined sensor-chip device is still in development, and it's getting scrutinized.

The idea of the implantable chip larded with sensors and hooked up to GPS "is very creepy," said Marlene Bourne, a senior analyst with Cahners In-Stat MDR, in Scottsdale, Arizona.

"This really raises a lot of questions," she said. "First of all, who are you going to implant this stuff into? Do you need their permission? What if they refuse, do you go ahead anyway? Will it be only for physicians? And for what purpose? It could start very benignly," but morph into something more sinister, she said.

Bourne, who studies the MEMS industry, said she is not aware of any other companies pursuing sensor-rich implantable devices.

Even though company officials say both Digital Angel and Verichip are voluntary, benign technologies, privacy advocates are leery of the products.

"Business models change in hard times," said Chris Hoofnagle, legislative counsel for the Electronic Privacy Information Center, a Washington, D.C. cyberspace civil liberties watchdog organization.

"Today it might be optional for people with medical conditions (to wear tracking or information devices), but tomorrow it might be mandatory."

Hoofnagle said he did not believe the company intends to accomplish anything sinister with its product. The problem, he said, is that it "sets up a system and conditions Americans to the idea that location tracking is OK."


Already, ADS's Verichip, which is a simple microchip without sensors or GPS components, has stirred some Christian groups, who see the implantable chip as the "mark of the beast," a prophecy in the Bible that a future evil dictator will separate his supporters from his detractors by some identifying symbol.

Web sites are filled with warnings that Verichip represents the mark of the beast, and that the end of the world is near, and news outlets, particularly in the Christian press and on Christian Web sites, have written stories about the issue of implanted chips and the mark of the beast.

An Applied Digital Solutions worker who asked not to be identified said that the company is aware of the controversy, and that it has even dispatched corporate executives to Pat Robertson's Christian cable television program "The 700 Club" to refute charges that Verichip represents the "mark of the beast."

A "700 Club" spokesperson said that the episode was popular enough to be rebroadcast earlier this month.