Attendees were presented with many statistics at the seminar. Troy Brown, from the US Department of Homeland Security, said an estimated 5 to 8 percent of all goods sold in the US are counterfeit. He added that 60 to 70 percent of those counterfeits come from China. According to Glyn Roberts, brand protection manager at the Pentland Group in the UK, a company that represents brands like Lacoste and Speedo, 43 percent of the UK population admitted to buying counterfeit goods.
Some information showed the potential health and safety risks associated with counterfeit products. Jerry Wald, senior director of fraud investigation and dispute services for Ernst & Young, said the World Health Organization (WHO) estimates that 10 percent of drugs sold worldwide are counterfeit. He said in some countries, that number reaches over 50 percent.
Beate Lalk-Menzel, senior counsel for Daimler Chrysler in Germany, spoke about the safety hazards of counterfeit car parts, citing counterfeit Mercedes brakes that caught fire after minimal use. She said one study found that 40 percent of car parts in India are counterfeit.
Speakers shared their experiences with brand protection and offered suggestions about how brand owners can combat the counterfeiting of their products. Roberts of the Pentland Group said that using 2D bar codes, sequential numbering and hidden images can help positively identify genuine products.
Although RFID (radio frequency identification) is a technology that can authenticate goods, Roberts believes it is not a panacea. He said RFID is currently not the right way to go for item level authentication. He believes the cost is still too high for brand owners to become heavily involved and the technology itself is by no means perfect.
Lalk-Menzel talked about the techniques Daimler Chrysler uses to keep its brands, particularly Mercedes, safe from counterfeiters. She said the company uses packaging and security holograms along with number identification with aspects of track and trace technology. Although counterfeiters have begun to make holograms as well, she explained that the numbering system is hard to duplicate, making the counterfeit holograms identifiable. Because every genuine package contains a hologram with a unique identification number, the company is also able to trace the copies by the numbers used by the counterfeiters.
RFID is always a topic of interest when talking about supply chain management. Joseph Pearson, business development manager of RFID systems at Texas Instruments, spoke about securing the pharmaceutical supply chain with RFID. He explained that two types of authentication are possible with RFID: on-line and off-network. The on-line system includes the use of readers. The off-network system uses a public key infrastructure (PKI) where a digital signature is created with a private key and then verified with a public key.
The current off-network system uses RSA digital signature, which Pearson said is slow and difficult to use. (RSA are the initials of the surnames of the three men that created the algorithm for the technology.) Pearson said the next generation of digital signatures is ECC (Elliptic Curve Cryptography), which the US Food and Drug Administration (FDA) says will replace RSA by 2010. He said that the digital signatures are applied during the label production process.
One barrier to full acceptance of RFID item level tagging in pharmaceuticals, said Pearson, is privacy issues. Some consumers are worried that others will have access to their product data. Therefore, PhRMA (the Pharmaceutical Research and Manufacturers of America) is pushing a centralized system in which the RFID tag does not contain a product identification number. Pharmacies, on the other hand, want a decentralized system that includes product numbers.
Supplying consistent packaging images to the market is another important aspect of protecting brands. Barry Jones, global packaging engineering director of Watt Gilchrist in the UK, talked about color and quality control in the packaging process. He explained that color consistency is an important part of thwarting counterfeits because consumers will be able to recognize differences more easily. Shape and type of packaging are also vital. He used the Heinz ketchup label and the Coca-Cola bottle as examples of highly recognizable shapes for consumers.
Jones said that using PMS colors is beneficial since they are standard. He said assessing proofs in a viewing booth or similarly lit area is best to see how the product will actually look on the shelf. He also stressed the importance of quality control, not only because it protects the image, but it also lowers cost.
Ralph Mendoza, smart packaging for Stora Enso, shared information about PackAgent, software for product authentication and tracking. He said that because item level RFID is still a challenge with the technology, other types of techniques are in use. He believes RFID will have an impact on authentication and tracking and tracing products, but not until item level tagging is a reality.
Mendoza explained that the PackAgent software recognizes the parent/child relationship between the case or pallet and the items inside. He said consumers could also verify the product through avenues like the internet or text messages on their cell phones.
Orion Pharma did a pilot program using PackAgent on its Marevan prescription drug from November 2005 to April 2006 that Mendoza said was successful. The pilot used three different identification technologies: HF and UHF RFID tags and individual bar codes. Mendoza believes the ability to work with various types of technology is a positive for the PackAgent software.
Several security companies also talked about their methods of protecting brand identity. Arthur Bobrow from H.W. Sands Corp. talked about his company’s anti-counterfeiting, polarized hidden image technology (PTEC), called Sands-Secure PTEC. The technology can be placed on a label. The image is invisible to the naked eye until it is looked at through a polarized film.
Sands-Secure PTEC is available in two formats: Latentogram, which must be adhered to a reflective substrate and applied through lamination, and Unigram, which contains an internal reflective layer and is applied through hot stamping. Bobrow said the Sands-Secure PTEC is available for lamination films, hot stamping foils and self-adhesive labels.
Graham Sampson from Secure Symbology explained that his company uses a system of serialized bar codes, both linear and 2D. The company embeds information like expiration dates and serial numbers into the 2D bar codes for security purposes. This aids in the authentication at the point of sale.
Sampson explained that track and trace can be done like a price scan throughout the supply chain. Each time the item is scanned, it is authenticated and that scan is recorded. When the product arrives at the store and is scanned, the store owner knows where the that item has been. The track and trace component also alerts manufacturers to potential counterfeits by showing them invalid bar codes, duplicate bar codes, diverted products, and other custom algorithm problems.