Security Labels

By Greg Hrinya, Associate Editor | October 14, 2016

These labels play a key role in the fight against counterfeiting and product tampering.

With counterfeit goods flooding the market at record rates, security labels have never been more relevant than they are today. According to Lori Campbell, chief of operations at The Label Printers, the Department of Homeland Security seized $1.7 billion worth of counterfeit goods at the United States’ borders in 2013. The global value of counterfeit goods is currently estimated to be around $1.77 trillion.

Counterfeit goods could also pose serious risks. Designer handbags and knockoff sunglasses are only the tip of the iceberg. Faulty packaging that has been tampered with can increase food borne illnesses, while counterfeit beauty and cosmetic products could pose health risks, as well. A 2014 study conducted by the International Anti-Counterfeiting Coalition (IACC) valued China’s counterfeit goods at $1.22 billion for total value of IPR-infringing goods seized.

“Some of these products from China include tainted baby formula, which has led to the death of children over the past few years,” explains Bill Cummings, SVP of corporate communications at Thinfilm. “Additionally, the pharmaceutical market is a growing one. In 2010, a United Nations report lists phony medicines as the ‘greatest concern’ when it comes to counterfeit goods.”

“Product counterfeiting knows no bounds,” says Trevor Richardson, market development manager, Americas, at UPM Raflatac. “It seems like no matter what product is manufactured, there is an opportunity to counterfeit and capture monetary gain illegally. Manufacturers spend millions developing unique products with stringent quality assurance steps – having something counterfeited normally means substandard product. It’s actually better to ask, ‘What is the risk of potentially buying substandard counterfeit product?’ Medication, electronics, food and beverage products, cosmetics and skin creams, automotive parts – substandard could mean illness – if not death – by misled consumers.”

Security extends beyond counterfeiting and product tampering. Product diversion can be just as damaging to a brand as counterfeit products, which has increased the need for effective track and trace capabilities.

Security labels are intended to remedy this epidemic.

Alison Schuitema, Avery Dennison’s product and business development manager, pharmaceuticals, defines a security label as that which features tamper evidence and anti-counterfeiting solutions. “Tamper evidence features a pretty straightforward sign that your package or product has been tampered with,” she explains. “It can be a destructible film that’s going to break when you try to remove it from the package to a void film that’s going to leave behind some kind of word or residue upon removal. Anti-counterfeit solutions are generally more customized and difficult to copy. It could be anything from a watermark with a company’s name or logo to a customized hologram.”

According to Joel Ulrich, roll product manager at Spinnaker Coating, there are three types of security labels: overt, covert, and forensic. Overt security measures can be seen with the naked eye, while covert measures are harder to spot. Overt features include watermarks, holograms and tactile effects. Conversely, covert features often require special equipment to locate or read hidden technology. These might include fluorescent or phosphorescent markers, infrared inks and tamper-proof labeling.

Forensic attributes are the highest type of security measure. “They require specialized laboratory equipment to analyze or confirm authenticity,” explains Ulrich. “Forensic measures may include taggants, chemical agents or even biological DNA. They require the label to be destroyed for complete and definitive testing.”

Thinfilm finds that security labels will typically involve invisible inks, holograms, and RFID tags. “As counterfeiters continue to find ways to hack into these traditional labels, there’s an increased need for advanced security labels that are unique, agile and cost-efficient,” says Cummings.

Many brands also develop a style guide for their logo/brand in order to make a determination on the product’s authenticity. These tend to be the cheapest and easiest measures to counterfeit, and they will often elude casual observers.

There are a variety of substrates and printing processes that can be used for security labels. Flexo, digital, offset and gravure printing have all contributed depending upon the level of authentication. Avery Dennison finds that coated PET films are popular, although it will depend on the purpose and functionality of the label. Acetate and frangible films are also commonly used for destructible labels. “There are also solutions like a light-basis weight paper with an aggressive adhesive that will tear when you try to remove it,” adds Schuitema. “There are quite a few substrates for different products that can be used.”

Avery Dennison recently launched an adhesive at Labelexpo Americas that is suitable for security applications. According to Schuitema, S788P provides fiber tear on varnished cartons, and the product can deliver a tamper evident signal on a package.

UPM Raflatac works closely with its customers in order to tailor a specific security solution to their needs. “At UPM Raflatac we do not push a ‘one mousetrap solution’ for authentication,” says Richardson. “We prefer to work with our customer and the brand owner to identify who will be authenticating the product and what levels of authenticity are needed or make sense. The security label could be as simple as a destructible paper or as complex as a voidable holographic film with multiple customized layers of covert and overt features.

A digital solution
Digital printing has also contributed to the growth of this market segment. The ability to print codes and variable data on an individual item allows for traceability. “Spinnaker Coating has collaborated with a number of digital equipment manufacturers to pre-approve a variety of labelstocks that can be used to print unique labels for individual items,” says Ulrich. “Security solutions often require the use of custom materials or constructions as the solutions are designed to be unique to a particular product and then changed frequently. This often means relatively small volume requirements for a labelstock being used for a security application.”

“Digital printing opens up opportunities to further segment a brand’s products to capture more information,” explains Campbell. “Instead of having to purchase one label that covers a variety of products, they can choose to take advantage of the small run capabilities of digital equipment.” 

According to Domino, digital printing offers several benefits. Digital presses can print more complex variable data, making it an attractive option for converters working with security labels. “For lower level security, we might print a modulus number sequence with check digit,” says Philip Easton, director of digital printing solutions at Domino Printing Sciences. “The check digit is created using a defined formula from the main number that only the brand owner knows, making it difficult to copy when compared to a simple sequential number. For higher levels of security, the UV-curable glue combined with holographic foil (digital cold foiling) may be used with a uniquely developed substrate.”

Easton explains that Domino provides converters with several effective options for digitally printing security labels. A monochrome print bar, such as the Domino K600i, can be added to an existing printing process, or a full color digital label press can be utilized, like the Domino N610i. “Both offer a very efficient way of printing labels with variable data security features included,” he says. “Variable data is a key way to both trace products and make them more difficult to be copied.”

Many of Domino’s digital solutions are added to existing flexo presses or finishing lines. The systems can be configured to print images ranging from 108mm or 4.25" to 333mm/445mm (13" or 17.5") for narrow web applications to up to 781mm (30") for large sheet printing requirements. “The same product can print monochrome – mostly black – for standard variable data printing or can print the adhesive for digital foiling, and now we can print UV readable ink that is invisible unless it is illuminated by a UV light source,” adds Easton. “This product is now being used by a very large number of label converters who specialize in security label printing, both in North America as well as in Europe and in Asia.”

Domino’s machinery also work well with a wide range of substrates. The UV-curable ink applications, including digital foiling, generally benefit from a sealed substrate such as a polypropylene, polyethylene or otherwise coated label materials.

Getting smart about security
Smart technology, including the use of NFC and RFID technologies, QR codes and augmented reality, among others, has the potential to put a major dent in counterfeit goods and item tampering.
“Any time a new technology comes onto the scene, everyone wants to jump on the bandwagon,” says Campbell. “Of course smart technology will continue evolving.  And if we think of where we were 10 years ago, it would be foolish to think more change isn’t coming – things we can’t even imagine. Smart technology needs very careful consideration. Understanding the expertise of the criminal, who may counterfeit or divert the product, and how easy it will be for them to infiltrate or duplicate that technology, is key to setting the expectation of it to be a protection mechanism.”

Thinfilm offers NFC OpenSense, which is a near field communication (NFC) sensor tag technology that has the ability to drive enhanced consumer engagement and product security. The company describes these tags as thin and flexible, enabling them to be integrated into a product’s packaging. OpenSense allows for the dynamic detection of a product’s sealed and open state, where the tag can be traced before it leaves the factory and after the seal has been broken.

Thinfilm has also partnered with Xerox for two products that feature Thinfilm Memory – Xerox Printed Memory and Xerox Printed Memory with Cryptographic Security. According to Cummings, Xerox Printed Memory can collect and store information about the authenticity and condition of products, storing up to 36 bits on rewritable memory – or 68 billion points of data.

“We have already started to see the market change and shift with OpenSense technology,” says Cummings. “Though it is still new to the market, in many instances it is a better alternative to some of the other options out there. This technology has the opportunity to shift the market and help reduce rampant counterfeiting throughout the world. Our vision is that consumers will be able to tap a wide range of everyday items with their smartphones to check their authenticity before purchasing them, thus significantly reducing the counterfeit market all together.”

As with every market, however, there are challenges with smart technology destined for security labels. One of the primary concerns is cost. “That is one of the main considerations that has to be taken into account when selecting a security solution for your product,” says Schuitema. “Especially for high-value anti-counterfeit solutions, it will be somewhat of an investment to bring that level of brand protection to your product. The end user or brand owner needs to take a hard look at how much they’re willing to invest there.”

In addition to cost, Cummings claims that many of the current solutions, such as 2D bar codes and QR codes, can be copied and hacked. “The hologram labels that you often see when you are shopping in a store can be easily copied and counterfeited as well, meaning you still aren’t sure if the product you are purchasing is authentic,” he explains. “On the other end of the spectrum, there are clunky security tags that are attached to clothing, which can also be duplicated or easily removed from products.” 

In many cases, the technology has to evolve rapidly in order to stay a step ahead of the counterfeiters. “Unfortunately, there is no single technology that has been developed to meet all the requirements of protecting a product,” adds Mike Marasch, vice president of roll marketing and sales at Spinnaker Coating. “Thus, layering in several technologies in unique combination is the most effective way of staying ahead of the sophisticated ways that counterfeiters get around or copy security technology. With that backdrop, it makes sense that security labeling measures must be changed frequently to make copying more difficult.”

Expanding markets
According to Spinnaker Coating, security labels are most commonly destined for markets with high-value items. Although they are most often seen in the food and beverage, cosmetic, and pharmaceutical segments, nearly every market can benefit from this type of label.

Any market where public health and safety is at stake will see an increased use in security labels. Temperature tracking sensors can ensure proper handling throughout all areas of the supply chain. These measures can be taken with food products, as well as pharmaceutical products. Certain medications are required to remain at a certain temperature before becoming inactive or even dangerous.
“Diverted, adulterated or counterfeited pharmaceuticals and foods are creating the greatest challenges for brand owners now, as these products will need cost-effective solutions that protect the integrity of products and ensure the public trust that the pharmaceuticals and foods that they use are safe,” explains Marasch. “Both pharmaceuticals  and foods are viewed as potential terror threats, and therefore much work is going into secure solutions for protecting their respective supply chains.”

At the end of 2017, new legislation in the US – The Drug Supply Chain Security Act (DSCSA) – will make serialization mandatory for pharmaceuticals. Medicinal track-and-trace measures are expected by the end of 2023, as well. Ulrich says the food industry will see similar actions when the Food Safety Modernization Act is fully implemented. 

“Security is a horizontal across many verticals that we play in,” explains Schuitema. “In addition to pharmaceutical and medical device, you see security labels going into consumer electronics, alcohol – wine and spirits, high-volume beer – tobacco, and other high-value segments. There are quite a few different areas that are somewhat regulated where these labels are being used.”

According to Campbell, security labels can affect even the most obscure segments. “Almost every market has some level of brand protection need,” she says. “There is almost no type of product that is not being compromised today. One of the strangest ones I have run across is counterfeit eggs. No product is immune; it is all up to the brands and if/how they choose to combat the problem.”      

“Every year we see something new added to this list,” says Richardson. “If it’s a hot product that consumers want, you can bet there is a counterfeit option out there.”

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