Counterfeiters are persistent, sophisticated, and determined criminals. As such, brand owners would benefit from a comprehensive anti-counterfeit strategy. But you can safeguard your brand in many ways, so what is anti-counterfeiting? What does it include?
In short, anti-counterfeiting is the practice of applying covert and overt protections to packaging, authentication certificates, or directly on the products themselves. These measures often include technology to track, trace, and verify an item’s authenticity from end to end since counterfeiting can occur at any point in the global supply chain. With anti-counterfeit defenses in place, brand owners can rest assured that counterfeiters won’t be able to trick consumers into believing items are authentic. Here’s what else brand owners should learn about why anti-counterfeit protections are valuable and worth the time to implement.
What is considered counterfeiting?
The most efficient way to address the problem is to start at the core. What exactly is counterfeiting? Are there any gray areas in the market? And if something is illegal in one country, will it also be illegal in another? Questions like these abound when narrowing down what counterfeiting means in the real world. Some nations are notorious for allowing counterfeiters to ply their illicit trade because laws are vague or poorly enforced, if at all.
Nevertheless, counterfeiting occurs when someone infringes upon the rights of a trademark’s legal owner. Faking intellectual property (IP) counts as counterfeiting, too. Yet, the crux of the problem is that gray markets really exist and provide an avenue for con artists to fool customers. Trade laws may differ widely from one place to another, so criminals subtly find ways to abuse them without getting caught.
For example, parallel trading from one European Union member state to another happens more often than you assume. The freedom of goods to cross borders is a boon to the European economy. Still, it also opens the door to unscrupulous individuals who intentionally take advantage of business-friendly trade laws. Here’s how else con artists can fool consumers into believing products are genuine.
Examples of counterfeiting
Counterfeiting comes in many varieties. In fact, con artists and fraudsters never stop trying to perfect their tactics, techniques, and procedures to circumvent countermeasures. We’ve already touched upon parallel trading, so let’s give a concrete example. Overall, the con is relatively straightforward, and that’s what’s most concerning. Counterfeiters legally import products to one country but trade the items in another nation, which may have less strict trademark protections. In this case, the brand owner suffers because their products – despite being genuine and authentic – aren’t licensed for sale in that particular country.
Another example of counterfeiting is so-called over-run goods sold on the black market. Let’s use the auto industry as a quick example to demonstrate what might happen. In Asia, a global parts supplier fulfills orders to a U.S. auto manufacturer for proprietary components like a fuel filter or a new spark plug. But in this case, an unscrupulous manufacturer might intentionally overproduce the authorized parts and sell this “over-run” on the black market, thus infringing upon the rights of an unwitting company on the other side of the globe.
As you can see, counterfeiting doesn’t always entail faking an entire item since criminals don’t necessarily need to go that far to turn profits. QR codes do well for verifying authenticity if the technology on the back end can accommodate serialized codes; QR stickers in and of themselves don’t automatically deter counterfeiters. The deterrent is overt and obvious, so fraudsters can simply apply their own QR code stamp, and consumers never know the difference.
Not only that, but other sensitive markets, such as the pharmaceutical industry, are also at a high risk of counterfeiting. Making matters worse, fake medicines and life-saving medical devices like insulin pens or heart monitors can cost lives if they malfunction, which brings us to our next point of emphasis – the impact of counterfeiting on unwitting customers’ safety.
Impact of counterfeiting on customers
The impact of counterfeiting on customers is significant. They might unknowingly purchase an item that isn’t of the same quality, or the products may be completely defective. When this occurs, customers won’t trust a company to have their needs in mind. The consumer might assume that the business doesn’t care to provide an authentication measure of some sort. In that sense, the brand won’t be able to connect with the consumer. However, the good news is that anti-counterfeit technologies come in many forms, some more sophisticated than others.
Types of anti-counterfeit technologies
The specific types of technologies used to prevent fake goods from entering the market vary, and interestingly, some safeguards have stood the test of time. The most popular defenses include:
- Die-cut special shapes
- Digital watermarks
- Fluorescent taggants
- Highlight foils
- Micro text/microprinting
- Optical variable devices
- Product fingerprints
- QR codes
- Raman spectroscopy
- Radiofrequency identification
- Scratch-off codes
- Secured QR codes
- Security threads
- Smart embossing
- Thermochromic ink
- Tracking and tracing systems
- Traditional watermarks
Indeed, you have a comprehensive menu from which to choose when it comes to selecting an anti-counterfeit solution.
Why is anti-counterfeiting important?
As you can see, counterfeiting is an international concern. The damage caused by counterfeiters to the brand can be severe. If consumers can’t trust that a company sells genuine, high-quality goods, the impact will be substantial. Not only that, but the brand owner could have a difficult time determining exactly how counterfeiters are getting away with their crimes.
After all, the government in a particular country can only allocate a finite amount of resources and law enforcement to catch counterfeit items before they reach store shelves, yet the statistics show the fraudsters are having a reasonable amount of success. Thus, these types of criminals flood the market and persist in their efforts to fool customers.
Anti-counterfeiting on packaging
So, the next question is this: where do you start building comprehensive safeguards to deter counterfeiting and strengthen anti-counterfeiting verification measures? For many organizations, the most accessible low-hanging fruit to pluck is to secure packaging and labels with covert protections unbeknownst to counterfeiters, yet which solution works best? Indeed, we believe our packaging and label protection technology – Cryptoglyph – is leading the anti-counterfeit landscape.
Cryptoglyph – Packaging and Label Protection
AlpVision’s digital anti-counterfeit tech – Cryptoglyph – excels at secure packaging and labeling when digital authentication is necessary. Invented in 2001, Cryptoglyph originally worked by printing small dots with traditional ink spread across the packaging. The concept involved punching dots to be invisible to the naked eye without the need to implement additional hardware.
Offset printing techniques and equipment were helpful to a degree, but the actual authentication at this time was performed with a document scanner. The issue is that this method raises the likelihood of errors during verification. As such, we began using smartphones to detect Cryptoglyphs on folding boxes. The only downside used to be that reflective materials couldn’t be seen, but today, those concerns are a thing of the past since our algorithms have evolved alongside smart technologies. Now, you can deploy Cryptoglyph on materials, such as plastic bags, stick packs, and more.
Today, the solution works by imparting thousands of microscopic holes in the varnish layer of packaging, labels, and certificates of authenticity too. Simply put, fraudsters and counterfeiters can’t duplicate those types of measures since they have no alternatives to the underlying technology. Cryptoglyph is both state-of-the-art and incredibly effective at deterring counterfeits while not impacting efficiency and growth.
Cryptoglyph allows your company to scale up defenses and deploy them at a better price point when integrated with enterprise-grade IT. There is no need to code custom APIs or add an entirely new data architecture. The software integrates with the tech your company already has in place instead of requiring significant changes on the back end.
Cryptography is already powerful enough to thwart counterfeiters, yet you can develop an even more robust system when you add other protections like AlpVision Fingerprint to the strategy. This way, you will have added protections to boost the effectiveness of your anti-counterfeit measures. You may not eliminate counterfeiting, but you will make it much harder, if not impossible, to have a negative impact with Cryptoglyph.
If you’d like to learn more about our collection of anti-counterfeit solutions, download our latest white paper for more information.