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Chip Implanter PositiveID Aims to Clean Up a PR Mess -- One of Its Own Making

The pressure has finally taken its toll: PositiveID (PSID), the microchip implant company formerly known as VeriChip, has hired a PR firm to clear up inaccuracies in the media about its products -- many of which originate from PositiveID's own Web sites and its annual report.

There's a lesson for managers here: hiding in a bunker and hoping that bad press about your business will go away on its own is a rotten strategy. Only by being upfront, transparent and above all quick in your response to negative coverage can you nip PR challenges in the bud.

PositiveID has suffered for months from dismal headlines about its experiments on elderly Floridians with Alzheimer's and its plans to inject as many people as possible with RFID-enabled microchips that grant doctors access to their online medical records.

Until now, PositiveID had rarely responded to the press, and even turned down a request by BNET for a Q&A with CEO Scott Silverman to rebut allegations about the company. (The offer still stands.)

When BNET noted recently that PositiveID wanted to expand its Health Link medical record system to sailors and seafarers, a representative from Gibraltar Associates, a Washington, D.C.-based PR firm, wrote to demand a correction:

Health Link is a software-based product, and has nothing to do with the FDA-approved RFID microchip products under development at PositiveID
The reason Health Link and the microchip are confused is because of PositiveID's own web site, which once had a page that said:
Health Link is the connection between you and your personal health record. Health Link utilizes a tiny, passive microchip (the nation's first and only microchip cleared for patient identification by the U.S. Food & Drug Administration) and a secure, private online database that links you to your personal health record.

... About the size of a grain of rice, the microchip is inserted just under the skin and contains only a unique, 16-digit identifier. ... unlike conventional forms of identification, the Health Link cannot be lost, stolen, misplaced, or counterfeited. It is safe, secure, reversible, and always with you.

That sounds a lot like a microchip to me, especially as the page was dominated by a photo of a microchip (pictured above), and a headline that said, "The Health Link Microchip," which you can see in this copy of the original page. When I pointed this out to Gibraltar, the page disappeared. The rep said in an email:
The old VeriChip Web site you link to and quote is no longer active -â€" the company, now known as PositiveID, has a new Web site here:
I understand the confusion that could result from reading the old site, so let me clarify this again for you -â€" Health Link is a software-based PRH product. It is in no way affiliated with the FDA-approved RFID VeriChip or any other injectable products PositiveID currently has under development.
For good measure, the rep added later:
I understand that the presence of the old site may have created some confusion. It has been taken down.
So far, so good.

Unless you're an investor reading PostiveID's annual report, as filed with the SEC. It describes Health Link as an FDA-approved microchip system on pages 6 and 26:

Our HealthID segment also includes the VeriMed system, which uses an implantable passive RFID microchip (the "VeriChip") that is used in patient identification applications. Each implantable microchip contains a unique verification number that is read when it is scanned by our scanner. In October 2004, the U.S. Food and Drug Administration, or FDA, cleared our VeriMed Health Link system for use in medical applications in the United States.
When I asked PositiveID to clear up the various brand names -- VeriMed, VeriChip, Health Link -- used to describe this suite of products, the Gibraltar rep replied:
VeriChip Corporation previously marketed a product by the name of Health Link that included both an RFID microchip and a PHR [personal health record], but the pairing is not being offered at this time.
So there you have it: The chip and the medical record system used to be the same thing but now they're separate. And while the company is offering its Health Link medical records system to various customers, that offer does not come with chips. (Of course, it's still not clear why you'd want to get a VeriChip implant if it's not linked to the Health Link system.)

All clear?

Addendum: PositiveID even made a TV commercial in which its microchip was described as "Health Link." Watch it here before it mysteriously disappears.


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