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Counteracting Counterfeiting
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By Liz Martinez
Security Technology & Design
Product counterfeiting is a huge problem, costing manufacturers an estimated $450 billion each year, yet pursuing criminal charges against counterfeiters is tough.
Many European and North American companies off-shore their manufacturing operations, often to Asian countries where anti-counterfeiting laws are weak to non-existent. These contract manufacturing locations sometimes copy or counterfeit branded products, knowing there is a great deal of profit to be made with little potential penalty. These counterfeiters often have label copies printed locally to add an aura of authenticity to the products.
The cost to manufacturers is heavy: Not only do they lose sales revenue, but the integrity of the brand is compromised when inferior products that masquerade as the real thing fail to live up to consumer expectations. The Department of Homeland Security is the law enforcement agency in charge of counterfeiting cases; however, brand integrity cases aren’t topping DHS’s to-do list these days.
To combat the problem, manufacturers send representatives around the world to examine products sold under their brands to try to determine whether they are authentic. If the goods are counterfeit, the employees try to track down the sources and, if possible, put together a case that can be handed to the authorities on a silver platter in order to improve the chances of prosecution.
Identifying Counterfeits
There are often telltale signs that a product is counterfeit, and experienced brand investigators have traditionally looked for poorly copied labels as well as inferior manufacturing or items that are available in colors that the company doesn’t officially manufacture. Some differences jump right out, while other fakes are simply unauthorized overruns, making detection difficult or impossible.
Technology is catching up to the counterfeiters in the form of asset tagging, which employs the application of a security mark to a product. The security mark is a unique identifier that provides proof of ownership or source and can facilitate the detection of fraud or theft. Security marks range from the overt, such as holograms and ultra-violet luminescent material; to invisible, inorganic substances; to organic DNA codes.
Taggants are substances that can be incorporated into a wide variety of liquid and solid materials, such as fibers, inks, varnishes, paints, plastics, metals, fertilizers and even explosives. They can be used to identify items as varied as pharmaceuticals, apparel, consumer goods, sporting goods, petroleum products, antiques, documents, stamps and currency. Taggants can be used for inventory control and tracking and tracing in addition to brand authentication.
