COUNTERFEITING isn’t often a matter of life and death. But at an international conference on product piracy last month, the deadly potential of fake goods was on everyone’s mind.
The wake-up call came from China, where dozens of babies have died and hundreds are suffering malnutrition after being fed counterfeit formula milk with no nutritional value. Parents and carers were unwittingly feeding their babies on nothing but water.
Coming just a week before the first Global Congress on Combating Counterfeiting, held in Brussels on 28 May, the affair brought the potential risks of piracy into sharp relief. Run by Interpol and the World Customs Organization, the congress aimed to pool knowledge, plan action and discuss technologies that can help defeat piracy. A huge range of products are affected, from drugs and contraceptives, to food, cosmetics, shoes and car parts. “When people buy counterfeit condoms in Africa it can cost them their life,” says Michel Danet, secretary-general of the WCO.
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Many see the answer to such problems in various “product authentication” technologies designed to help consumers recognise the genuine article. Andrew Machnicki of European firm Securis, sees the huge array of options as the “picks and shovels” in a new antipiracy gold rush.
But Machnicki’s picks and shovels were not on open view in Brussels. His technology was hidden in a tightly shut briefcase which he would only open when no rival was in the vicinity. His idea, it turns out, is to emboss holograms onto a metal surface, using a finely engraved, ultra-hard, nickel stamp to create a holographic image. “The potential market is huge. Levi’s alone needs 300 million rivets a month for its jeans,” Machnicki says.
Another idea is to use radio-frequency identification (RFID) tags to authenticate products. Each tag is, in effect, a sticker that incorporates a microchip and a coil that transmits an encrypted ID code when “interrogated” by a radio signal from a reading device. But while RFID tags and readers are useful for suppliers and retailers tracking consignments, Ian Lancaster of market research firm Reconnaissance International said the idea is flawed as a consumer tool because the reading devices are too expensive.
Another technology, called Holospot, developed by Tesa Scribos of Heidelberg, Germany, may hold more promise. Tesa’s technology etches the maker’s name, logo and product number onto a 1-millimetre square of a polymer that can be placed somewhere on, say, a bottle of shampoo. The tags cost around 10 cents each and the details are just readable with a simple 10× magnifier – conjuring up Clouseau-like image of customers wandering around shops and street markets peering at the goods through a magnifying glass. But Daniel Weber of Tesa Scribos warns that technology for the consumer is no cure-all. “You can’t rely on consumers to verify products,” he says. Makers, wholesalers and supermarkets need to be just as wary.
Others at the conference were more concerned about the long-established practice of faking not goods but cash. And until now, technology seems to have been making the problem worse rather than better. For example, all-in-one machines that function as ink-jet printers, copiers and scanners are available for under £100, and can produce copies of banknotes that are good enough to pass for real currency in dimly lit bars and nightclubs.
To tackle this, the Central Bank Counterfeit Deterrence Group has developed a telltale mark that is already hidden inside many banknotes around the world, and which digital imaging software licensed by the CBCDG can recognise. The latest version of Adobe’s Photoshop image manipulation software already includes safeguards that prevent it being used to copy images that include the telltale mark.
But the internet’s newsgroups are already buzzing with ways to defeat the system, and the CBCDG wants to kill the practice at source by ensuring that the makers of printers and copiers build the technology into their machines, so that they refuse to print such images even if the software does allow it to be handled.
Just before delegates left Brussels to ponder their future anti-counterfeiting measures, a salutary tale started doing the rounds. The WCO produces a CD database of the codes needed to identify goods by type so that local customs authorities can collect the appropriate duties. The discs sell for €1000 apiece, but WCO investigators have found that staff at some border posts, which are supposedly the front line in counterfeit detection, are not using the official CDs.
Instead – you’ve guessed it – they are buying cut-price pirated copies, complete with crudely photocopied, plainly fake covers and sleeve notes.
How big a problem is product piracy?
• The World Health Organization estimates that 10 per cent of all the drugs on sale globally are counterfeits
• In 2001, clothing and footwear companies in Europe alone lost €7.5 billion to design piracy
• US customs says the annual number of seizures of counterfeit goods increased by 12 per cent in 2003