From the RFID Viruses and Worms Press Release:
Has your dog or cat contracted a computer virus? It’s not impossible. These days, large numbers of pets and livestock have a small chip implanted under the skin so that they can be identified if they stray or turn out to be infected with a disease. As these chips only have a limited memory capacity, it was widely assumed that they could not become infected with a computer virus. However, researchers at VU Amsterdam have now discovered that this is a real possibility. Fortunately they have also come up with a number of adequate countermeasures.The paper -- "Is Your Cat Infected with a Computer Virus?" -- is here.
The chips in question are called Radio Frequency Identification Tags, or RFID tags. These are small, relatively cheap microchips, which can be used to tag supermarket products, for example. They can also be implanted into pets or livestock. The same chips are used in public transport chip cards, ski passes or on baggage labels at airports.