08:53 AM

Silicon Valley outlaws...could future legislation ban innovation?

Thursday evening I met with a bunch of RFID chip experts from Sun Microsystems, Texas Instruments and VeriSign. I know that my sponsor Infineon Technologies is watching this space and is concerned about legislation that could ban radio chip tags in government facilities in California, and similar legislative moves around the country.

The RFID chips are currently attached to pallets of products, and wireless readers can pick up their bundle of identifying information as they speed through the supply chain. Eventually they are expected to be used to tag most products.

Some US politicians have sponsored legislation that seeks to restrict or ban the use of the chips, because of citizen data privacy concerns. RFID chips being used to track people is the main worry.

The RFID experts I spoke with that evening seemed relaxed and unconcerned about the political side of things, which seemed both strange yet typical. US tech companies generally have faith that laws will be rational and will not limit innovation.

But Infineon knows better. Christoph Liedtke, the comms director at Infineon, used to be a speech writer for a prominent German politician for many years. And he has also seen first hand how Infineon and the German government sparred over crucial issues, and that the political process is one that cannot be ignored.

Silicon Valley's lacklustre interest in the legislative process is a big issue, says Joe Kraus, co-founder of Excite, the pre-Google search giant, and now founder of JotSpot. Last week in SiliconValleyWatcher, he warned that Silicon Valley needs to get serious about having its voice heard in Washington D.C, and in state governements. Otherwise there will be more restrictions on what types of innovation can be done here.

Already, the Digital Millennium Act places a huge amount of technology in a gray zone because it could be used to circumvent content protection technologies. This has chilled investment in some companies because of the risk of legal challenges - and Silicon Valley did little to challenge the passage of that law.

Future US laws will be passed because of strong lobbying by sectors that are threatened by progress in digital technologies. The music industry and Hollywood have already done that with their strong support for the Digital Millennium Act. Others will try to do the same.

The biggest danger to Silicon Valley is that it could become illegal to innovate here.