Technology-based security measures help companies maintain their products
Bootleg music and video downloads. Designer knock-offs. Identity theft. How do you tell the genuine article from a fake when low-cost, sophisticated technology is aiding even the teen next door in a rapidly-expanding world of counterfeits and diverted goods?
"There are staggering amounts of counterfeiting and diversion going on in the world today," said Doug Johnston, president of Verification Security Corporation in Spokane, Wash.
According to the Counterfeiting Intelligence Bureau (CIB) of the International Chamber of Commerce in London, counterfeiting accounts for between five percent and seven percent of world trade, or approximately $350 billion annually. The CIB has investigated hundreds of counterfeiting cases worldwide, for goods ranging from pharmaceuticals to wall coverings.
Johnston, seeing a market need, matched his years of experience in corporate management and data processing with partner Steve McGrew's extensive document and product security expertise. McGrew holds more than two dozen patents in holography and optical document security and displays.
Unique Dots
The partners experimented with magnetic ink, which has been used for decades in MICR encodings, but for which they developed a unique twist—the MagDot.
"Each and every MagDot is unique in its internal randomness due to the laws of statistics and physics," Johnston said. "It is uncontrollable by the counterfeiter."
The pair then developed readers to analyze each unique dot's pattern and verify it based on a database that can be correlated to a customer's product database, carton numbers, etc. The system authenticates and tracks documents and products throughout the entire distribution chain.
The MagDot, often used in conjunction with a bar code, hologram or other overt security measure, is typically printed as a 3 mm square dot, but can range from 1 mm square up to a quarter-inch in size. It can be hidden behind a hologram, logo or foil, remaining completely disguised.
The MagDot is printed before final varnishing and must be used on a flat surface—documents, envelopes, rigid cartons—with which the reader can contact. Paper and most plastics will work, Johnston said. The dots are readable under varnishes less than 0.001˝, but can be made bigger for better readability under thicker coatings.
With the added security, customs agents, tax inspectors and company officials can verify that a shipment of goods is valid by checking for the presence of a specific MagDot that is identified in the database.
Even if counterfeiters manage to duplicate a bar code, hologram, fluourescent-ink marking or other measure, the MagDot always remains secure due to its endless random permutations.
And, although unscrupulous distributors and merchants along the supply chain may benefit from avoiding taxes or markup, and consumers may get a deal on discounted goods, it's about more than just protecting the brand owner's profits, Johnston said.
In some instances, product manufacturers produce excess inventory during off-hours and the excess may be adulterated en-route to the consumer. Bogus prescription drugs and liquor lethally cut with methanol are some examples that Johnston cited.
Much like banks and check issuers must provide ample security measures to protect against forged documents, "Brand owners have a legal responsibility to protect consumers from counterfeit products," said Johnson. "If they don't, they are liable."
In addition to product tracking, the MagDot can be used on checks, airline tickets, passports, coupons, legal documents, event tickets, ballots, gift certificates, access badges, original art, garment tags and credit cards—in short, virtually any document or product that requires security.
People Verification
Verification also needs to extend beyond products and documents to people themselves. Although state motor vehicle departments have become savvy over the years with plastic photo IDs and holograms, checking ID is still a largely manual task at liquor stores, bars and restaurants.
Enter Precision Dynamics of San Fernando, Calif., which last year introduced its AgeBand system to spot fake IDs. Prescision Dynamics has long sold identification wristbands for use in hospital maternity wards and other applications, and recognized that automated verification of the legal drinking age had large market potential.
The electronic AgeBand system utilizes specialized software and databases from states' motor vehicles departments to verify the authenticity of the proffered license. Once verified, the patron's name, the last four digits of their drivers license number and "Age ID Verified 21" are printed out in large type on a wristband for the patron.
"The AgeBand can be used in any setting where patron IDs need to be checked, such as bars, clubs, sporting events, restaurants, concerts and festivals," said Precision Dynamics spokeswoman Paula Moggio.
By not having to check IDs at a large venue, serving speed at pouring stations increases, and managers and bouncers can easily spot gate crashers and underage drinkers.
In addition, the system offers customers revenue opportunities through selling sponsorships on the wristbands themselves or on the panels of the cart which holds the reader and supplies.
The wristbands come in a wide range of colors and include tamper-evident adhesive closures. The Smart AgeBand features an RFID inlet for use in e-commerce, access control, identification, and event analysis by capturing data such as age, gender and patron flow.
The Smart AgeBand system also works with the Smart Kiosk cashless point-of-sale solution—an ATM-like machine where patrons can load money directly onto their wristband. Patrons can purchase food and drinks from a concession stand, swipe the wristband over a reader at the point of sale, and not have to hassle with credit/debit card transactions or standing and waiting for change.
Used at the Jacksonville, Fla., SuperFest, an official SuperBowl event, the Smart Kiosk system helped to increase per-capital spending by an estimated 10 percent and increased revenues by an estimated 15 percent, according to Bill Schumpp, Jacksonville Suns director of food and beverage.
Convicts and Corpses
Such wristband innovations are making inroads in other markets as well. The RFID wristbands offered by Precision Dynamics can be used in health-care for positive patient identification, medication administration and surgical sites verification, as well as in correctional facilities for inmate identification.
The Clincher wristbands used in jails stay on inmates at all times, and utilize a bar code or RFID to both identify inmates and track if wearers are in an authorized area, as well as commissary use and medication distribution.
Ankle bands are now being used instead of toe tags for post-mortem identification needs and the company also makes a non-transferable secure wristband with a plastic snap and a clear-adhesive shield for optimal scanning. "There is a lot of advancement and innovation in regard to RFID-enabled wristbands," Moggio noted.
It may be tough to keep a step ahead of crafty counterfeiters, but creative companies prove that they're up to the challenge in a security-conscious world.
By Janet R. Gross
- People:
- Doug Johnston
- Places:
- London
- Spokane, Wash.