Are your customers' products secure?

Here's what you, as a converter, can do to help your customers secure their brand-name products.

By Associate Editor Laura McCluskey -- Converting Magazine, 3/1/2001

The television flashes a forty-second commercial bragging about all the bargains you can get for name-brand items. Name brands are mentioned that normally cost you a pretty penny, and this weekend only you can buy them for low, low prices at the local convention center. You're sitting back in your recliner holding onto the remote control and thinking "Should I go?" Next thing you know, you're driving to the convention center in search of bargains.

Well, they got you. You're in the convention center fighting the crowds from booth to booth. You wander over to the sporting goods area to find the running shoes you've been eyeing at the department store but that were never on sale. But now, you can't help but buy them. There's a 70 percent difference in price. What a steal!

What you don't know is that your new running shoes are a steal; the name of the brand has been stolen. They look exactly like the pair you've seen in the store, but what you don't know is the stitching on the inside is different, and the box they came in has a slightly different design than the original. Without even knowing it, you just bought a pair of counterfeit shoes.

Unfortunately, this scenario is very close to reality and happens more often than you'd think. Converters are increasingly becoming part of the solution, as new technologies evolve to use packaging and labeling to foil the thieves.

Defining the problem

According to the Anti-Counterfeiting Group (ACG), a trade association representing approximately 200 manufacturers and distributors of branded products and firms of intellectual-property lawyers and agents, counterfeiting is defined as: "The deliberate attempt to deceive consumers by copying and marketing goods bearing well known trademarks, generally together with packaging and product configuration, so that they look like they are made by a reputable manufacturer when they are, in fact, inferior copies."

In July of 1996 President Clinton approved the Anti-Counterfeiting Consumer Protection Act. The new Act amended the Racketeer Influenced and Corrupt Organizations Act to include criminal infringement of a copyright, trafficking in goods or services bearing counterfeit marks and trafficking in counterfeit labels for CDs, computer programs, computer program documentation or packaging and copies of motion pictures or other audiovisual works.

Who's gonna pay?

According to several anti-counterfeiting companies, a joint effort among converters and their customers must be the first step. Sometimes it takes longer than necessary to make that happen.

Joseph Formosa, technical manager at PROMAr Technologies, producer of HoloSECUREr security papers, states "Right now, many people are still trying to sort out who's responsible for protecting consumers, reducing theft and diversion and preventing counterfeiting. It's not clear among the manufacturer, wholesalers, retailers or consumers who's willing to pay more money to reduce these problems.

"Consumers seem to want the lowest price [on sportswear products] and are only slightly affected by counterfeit or deviated materials. In other instances, medicines for example, consumers would be willing to pay whatever is necessary for safe, effective products."

The Internet is making counterfeiting easier. Because you can't see the mastermind behind each site, it's hard to know that what you're buying is the real deal. What is making our lives simpler is also making the job of the counterfeiter easier. Auction sites can act as an opportunity to sell counterfeit merchandise as well. The Internet can not only reach your next-door neighbor, but the entire world.

How can converters learn more about counterfeiting?

Since counterfeiters don't report their yearly activity, there's no way to know exactly how much money is lost each year. But it's estimated that globally, $500 billion to $1 trillion is lost to counterfeiting each year.

Reconnaissance Intl., publisher of Authentication News, an international newsletter covering issues, strategies and technologies for fighting counterfeiting and diversion, is available to help converters get a head start on securing customer products. "We can be helpful to the converting industry," says Lewis Kontnik, principal of Reconnaissance Intl., "We work with companies that have an opportunity to deal with the control of manufacturing and distribution, marking and identification, serialization, and covert marking and labeling."

"It's the converters who make the packages and labels. They need the security and need to understand the issues, so they can effectively represent themselves to the brand managers of the companies they're printing products for," says Kontnik.

Reconnaissance not only provides help through articles published in Authentication News and personal consulting, but also helps by providing conferences on security and counterfeiting throughout the year.

Although most of the time one measure of security within a label or tag can now prevent counterfeiting, that's not always the case. Counterfeiters are catching on to, and duplicating, technology quicker than we'd like, so to prevent that, a lot of companies have to secure their products by various tagging and labeling.

How do I secure my customers' products?

According to several companies currently working with their customers, start by finding out what your customer has in mind to secure its products. Show your customer what's available for what it would like to do. Discuss cost and any type of constraints or concerns.

President and CEO Mark Lasky of Bell Label Co., a woven label converter, says "What we've done is made a joint call to work together [printer and customer]." Bell Label is currently working with GenuOne, a proactive brand security solutions company, to create security strategies for Bell's customers' products.

Michael Banahan, vp of American Bank Note Holographics, Inc., says, "We try to take very different physical processes and incorporate them into one product." This makes duplicating of the security process harder by incorporating more than one process.

"They'd [counterfeiters] have to go to a lot of different plants and a lot of expense. Eventually, because of the number of technologies used and the number of people involved, they get caught," he says.

What's available?

PROMA Technologies provides HoloSECUREr security paper. PROMA Technologies combines a variety of holographic technologies and patented processes to provide an advanced level of authentication for the product. HoloSECURE reportedly can be converted as easily as white paper. It can be slit, sheet-cut, embossed, laminated or backed with adhesive for use in many applications including stickers, labels, packaging and cartons. A major benefit with HoloSECURE is that it can not be duplicated by contact impression or photocopying.

Microtrace, Inc., has an identification-particle security feature called Microtaggant, which can be put into labels. Microtaggant can offer pharmaceutical manufacturers the ability to prove their name is carried only on the authentic product. Particles can be applied to a label on one small area containing an unique code sequence designed strictly for that specific product brand.

In conjunction with Microtrace, Tursso Co. has developed InfoPacT and X-pandaLabelr, a patented expanded-content label designed for pharmaceutical packaging.

Also working with Microtrace is a developer of leading-edge security-seal, label and information-marking technologies, Mikoh Corp. Mikoh has developed a patented Sub-Surface Laser Marking technology capable of recording in-line information within a tamper-evident seal and label. This product is available for high-security applications and applications where durability of the information is important. The marking system writes information directly to an internal layer of seals or labels. The laser can create serialized bar codes and two-dimensional bar codes that can be read using existing scanners or readers.

Besides its new laser-marking technology, Mikoh developed Counterfoil-seals and labels that are capable of storing images and data covertly. Created by a new patented technology, logos, insignias, alphanumerics, animations and other information can be stored in a small surface area allowing covert inclusion in visual OVDs such as holograms.

Westvaco Brand Security, Inc., now has a license agreement with Nocopi Technologies, a company that develops anti-counterfeit solutions that authenticate original products and documents. These patented authentication and anti-counterfeit processes for primary and secondary packaging and labels, consumer products and documents can be offered to Westvaco customers. The products and services can be used on paper, plastics, corrugated and other substrates, which complements Westvaco Brand Security's existing global packaging and anti-counterfeit expertise.

GenuOne, Inc., provides strategic and proactive brand security solutions for counterfeiting and other intellectual property-related issues. First, a team performs an analysis of the product marketer's systems, channels and needs. Then, after developing an individualized plan, the company works with the converter to integrate and implement the customized solution into the printing process.

This BrandSecureT solution from GenuOne includes advanced ink- and dye-based products from its portfolio of cutting-edge technologies. The application of these products provide the end-user/marketer with authentication, tracking and control capabilities that monitor the marked products from manufacturing through sales channels. Genu-One then provides a database tracking capability to collect, store and display information developed by reading the digital fingerprints that it and the converter have put on marketer's products.

Through its GenuNet division, it also uses this database to retain and organize information detailing unauthorized activity on the Internet. Password protected, this online database provides reports and information on activity in the physical world and on the Internet related to products entering unauthorized sales channels, sale of counterfeit goods, licensing and royalty fraud, and other issues related to intellectual property theft.

American Bank Note Holographics, Inc., offers three types of security to converters. Along with Unipac, American Bank Note has created HoloCapT, a holographic induction cap seal mainly used for pharmaceuticals as well as in other industries. The process incorporates a hologram into the initial manufacturing of an induction cap seal. No additional processing or equipment is needed to incorporate the HoloCap innerseal.

HoloSealT, also offered by American Bank Note, is a label with multiple security features. A high-security hologram, tamper-evident break pattern, black-light verification system and machine-readable code are all created during the first steps of label production. The benefit of this label is that it's easy to verify in the field-and difficult to counterfeit.

American Bank Note's newest product is the HoloMoldT-an injection-mold technology. This system allows the manufacturer to produce its plastic products and simultaneously incorporate holograms into the process so that they become part of the finished product.

All this and more

All of these technologies, and more, will be necessary in coming years. The penalties for counterfeiting are increasing as the years progress, but not quickly enough to put it to a halt. Since anything and everything can now be counterfeited, it will be hard to stop completely, but aggressive and coordinated efforts from all parties can help stem the tide. Remember, if your customers are affected, you will be too. Start your mission by figuring out what your role might be, searching for the type of process to use, and beginning to cooperate with your customers against counterfeited products worldwide.

More information:

PROMA Technologies, 508/541-7700, fax: 508/541-7777, www.promatechnologies.com

Enter 280.

Reconnaissance Intl., 303/779-1096, fax: 303/779-0013, www.Reconnaissance-Intl.com

Enter 281.

GenuOne, 617/654-2936, fax: 617/482-2653, www.genuone.com

Enter 282.

Microtrace, Inc., 763/784-9725.

Enter 283.

Westvaco Brand Security, Inc., 877/552-3861.

Enter 284.

American Bank Note Holographics, Inc., 914/592-2355, fax: 914/592-3248.