Anti-Counterfeit Technology for SMEs

Key Takeaways

• Small and medium-sized businesses are not too small to target: roughly four out of five SMEs experience some form of counterfeiting or brand abuse.
• Effective brand protection follows four steps: detection, validation, enforcement, and reporting, and a strategy missing any one of these leaves a gap for counterfeiters.
• Legacy options like RFID, QR codes, barcodes, and holograms can each be tampered with or replicated, so they only offer partial protection.
• Cypheme's AI-powered labels let any smartphone confirm authenticity in under 5 seconds, at a price point built for smaller brands rather than only enterprise budgets.
• Waiting until counterfeits appear in the market is more costly than building a brand protection budget in advance, since reputational damage is harder to reverse than lost revenue.

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Small Brands Are Growing Fast, But Protection Often Lags Behind

The ease of doing business in most parts of the world is fueling the growth of new brands every day. Small and medium-sized enterprises (SMEs) are launching across the globe at a rapid pace.

Starting a brand is the easy part. Making it succeed while staying true to its values is where small and medium-sized companies face real difficulty, and a SWOT analysis often overlooks counterfeiting as an external threat.

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No Brand Is Too Small to Target

Most SMEs operate within local markets, and many assume that, as a small brand, their products are unlikely to be targeted by criminals. The statistics say otherwise.
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The Numbers Behind the Risk

Counterfeit and pirated goods make up a meaningful share of world trade, and a similarly significant share of goods entering the European Union are fakes. It is short-sighted for a small brand to assume it will not fall victim.
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Demand Attracts Counterfeiters

Wherever there is consumer demand for a brand, its products, or its services, criminally minded opportunists will look to profit from that success. Research suggests that roughly four out of every five small and medium-sized businesses experience some form of counterfeiting or brand abuse.

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Why Small Businesses Face a Bigger Risk Than They Realize

Given the size and global reach of larger businesses, it is easy to assume they carry the higher risk of counterfeiting, since they appear more lucrative to criminals. That is often true, but larger brands typically already have brand protection policies in place, including third-party monitoring for rogue sites and unauthorized marketplace listings.

Smaller brands are generally unaware such infringements are even happening. Even when they notice, they are often unsure how to implement a cost-effective strategy to address it.

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How SMEs Can Be Protected

Most brand protection providers work from a four-step strategy: detection, validation, enforcement, and reporting. Following these steps makes it easier to trace and stop illegal activity before it does lasting damage.
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Detection

Detection means actively searching for infringements. As soon as counterfeits surface in the market, active anti-counterfeiting technology such as Cypheme uses AI-powered software to both alert the brand’s rightful owners and to geolocate and systematically identify illegal operators selling false products under a brand's name, which helps trace the factories and manufacturing sites behind the fakes.
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Validation

Validation confirms whether a suspected infringement actually violates the brand's intellectual property, which protects legitimate sellers from being wrongly accused.
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Enforcement

Enforcement is where a brand protection solution takes action to contain the infringement, a critical step in stopping the illegal trade of goods and services.
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Reporting

Reporting delivers actionable information back to the brand. Analytics help a brand identify the weak point that allowed the infringement, so it can be addressed before it happens again.

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Brand Protection Is Paramount, Regardless of Size

Counterfeiting costs add up quickly across industries. Motor vehicle suppliers, electronic parts manufacturers, and luxury brands have each reported losses in the tens of billions of dollars from counterfeit goods, at both large and small companies alike.

Cypheme's case studies show how this plays out across a range of product categories, from vape and collectibles to smart access hardware.

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What Should Brand Protection Cover?

A solid brand protection solution should cover a few core features: taking down infringements, protecting a trademark, monitoring marketplaces, and offering multi-language protection.
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Taking Down Infringements

This is a prerequisite of any brand protection strategy. It includes filing IP complaints on marketplaces such as eBay and Amazon, or notifying domain registrars about scam and counterfeit storefronts. Cypheme offers takedown of counterfeiters as a service to its customers.
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Monitoring Marketplaces

A brand protection solution should monitor for infringements across marketplaces, even ones where the brand does not sell directly, since fakes can still surface there. With solutions such as Cypheme's online brand protection, SMEs do not need to monitor every marketplace themselves.
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Multi-Language Protection

Counterfeiters selling fakes on one marketplace will often sell in other jurisdictions and languages too. Checking keywords in multiple languages helps trace fake or unauthorized sellers across regions.

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Cost-Effective Brand Protection for Small and Medium-Sized Businesses

With limited budgets that usually go toward marketing and R&D, small and medium-sized businesses often feel they cannot spare funds for anti-counterfeiting technology. This is especially true in categories such as anti-counterfeiting for fashion and accessories and anti-counterfeiting for cosmetics and perfumes, where margins are already thin.
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Where Legacy Options Fall Short

Lower-cost options are available, but QR codes, RFID, and holograms don’t offer a foolproof solution, since each can be tampered with or replicated in some form.

• QR codes: Typically verified only after a purchase, and the linked website itself can be faked.
• RFID chips: No more secure than paper-based options, as the code in a n RFID chip can be copied just as easily as it is read.
• Holograms: Easy for counterfeiters to replicate with modern printing equipment.
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How Cypheme Closes the Gap

Cypheme's AI-powered active anti-counterfeiting technology is backed by an artificial neural network and uses uniquely chemical-generated, inimitable labels that integrate directly with a brand's packaging. It is simple to implement, and any customer, manufacturer, distributor, or wholesaler can confirm whether a product is genuine or counterfeit in under 5 seconds using nothing more than a smartphone camera.

The technology also lets brands geolocate areas where counterfeiting of their products is widespread, which helps track counterfeiters and their activity.
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Pricing Built for Smaller Brands

Despite being powered by cutting-edge AI, Cypheme's solution remains cost-effective. Cypheme offers partner brands competitive pricing, so a switch to active anti-counterfeiting protection does not push product prices higher or make an SME less competitive. Details on plans built for smaller brands are available on the Cypheme pricing page.

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