Are you a brand that has just been introduced to the market and scared of your product getting sold illegally? Or are you an established brand that is regularly victimized by counterfeiting? Do you incur regular losses in business owing to counterfeiting or having trouble winning the trust of your customers? Then you are not alone as many businesses are susceptible to either of the above. Although counterfeiting has been around for a long time, the advent of technology has intensified the activities of illegal trade more than ever before; The situation is such that an increasing number of brands across the globe are facing the brunt of counterfeiting.
According to findings of a joint report by the Organisation for Economic Co-operation and Development (OECD) and the EUIPO, the global trade in counterfeit and pirated products increased from $461 billion in 2013, representing 2.5% of the world trade to as much as $509 billion in 2016, estimated to be about 3.3% of world trade. What makes the numbers truly alarming is the fact that they occurred during a relative slowdown in overall world trade. And interestingly enough, these numbers are based only on global customs seizures. They do not include domestically produced and consumed counterfeited goods or pirated digital products distributed online.
Researches also show that the value of counterfeit imports into the EU currently exceeds 121 billion eurosannually. The sectors reeling the most under the effects of counterfeiting are luxury goods, cosmetics, toys, alcoholic beverages, electronics, clothing, chemicals, and pharmaceuticals. The rampant increase in the trade of counterfeited illegal goods is becoming alarming for both big brands as well as small.
The Hazards of Counterfeiting for Brands
Besides tarnishing the brand image and ruining consumer trust, counterfeiting has other adverse effects too with far-reaching consequences for governments, businesses and populations globally.
Tax Loss and Hampering of Economic Activities
Lack of potential tax revenue is one of the biggest impacts of counterfeiting. It is unlikely that a group of people working within a syndicate of organized crime as counterfeiting will declare the earnings of their illegal enterprise to the government. The money that is generated from taxation goes into welfare activities like the construction of roads, schools, hospitals, etc. that keep citizens healthy and foster economic growth. Governments also apply taxes collected in the promotion of education and future innovation. This loss of revenue badly affects the economy and the countries at large.
Loss of Employment
If researchers are to be believed, as the counterfeiting industry continues to grow, around 5 million jobs are likely to be displaced by the end of this year; This is likely to lead to a global unemployment crisis.
Supports Black Market
Counterfeiting is closely associated with other forms of criminality since for the most parts, the counterfeiting organization requires a shady network of support to sustain these operations. Majority of the times proceeds from counterfeiting activities go further to fund illegal activities directly or indirectly.
Fake and adulterated products can pose serious health risks to consumers, especially with medicines and other edibles. Imagine unknowingly taking fake medication to cure some acute and deadly illnesses with the hope of getting better, but instead one ends up getting worse and even sometimes losing their life because of the ineffectiveness of the “supposed medication” they were taking.
Anti-counterfeiting Technology Explained
Tools, devices, applications… there is a host of things anti-counterfeiting technology can be. Some of the techniques of counterfeiting can be verified by human senses while some require the intervention of special recognition devices. However, one thing that remains common to all anti-counterfeiting methods is the use of special recognition devices. These markers are inextricably linked to the products and contain a specific set of information which enable the technology in the prevention of counterfeits.
The markers used in most counterfeiting technologies entails either of these features:
– Remote sensors associated with the Internet of Things
– Unique identification prints that add more authentication to products
– RFID or NFC tags that help in tracing and tracking
– Nondestructive, anti-tamper labels
Different Types of Anti-counterfeiting Technologies
From electronic identification to tracking devices to blockchain, brands can choose from a variety of anti-counterfeiting solutions. Let’s take an expanded look at some of them:
– Electronic Technologies: The use of special electronic devices lies at the core of electronic anti-counterfeiting technologies. These devices help to uniquely identify, authenticate, and track products, while also providing the same product specific information or access to the database that stores the master data. The most common solution in this category is based on radio frequency identification associated with the Internet of Things. Other electronic technologies include Radio Frequency Identification (RFID), Near Field Communication (NFC), Sensors, Electronic Fields
– Marking Technology: This anti-counterfeiting technology is primarily used to authenticate rather than identify products. Products are marked with unique security features through the application of graphic models of special coding systems. The security against faking or tampering provided by markers is derived in two ways. Either from the nature of the technology itself where security is granted through visual indication, or from the information it contains, wherein security is drawn from difficulty of cloning or reproduction of information. Some of the commonly used markers are Optical Memory Brands, Security Holograms Watermarks, Invisible Ink, Microtexts etc.
– Chemical and Physical Technologies: These technologies are used for authentication without simultaneous unique identification of the product. However, they require the use of specialized hardware or laboratory tests to read and verify the generated markers. Through exploitation of inherent randomness of patterns produced when certain processes or chemicals are applied to materials, they act as markers. This can be categorized into 4 types namely, DNA coding, chemical coding and tracers, glue coding, and surface analysis.
– Mechanical Technologies: This kind of anti-counterfeiting technology works with the physical properties of materials to prevent counterfeiting and create effective tamper barriers. They generally perform simple authentication functions. However, when used with other technologies, they get equipped to perform identification and tracking functions alike. Labels, seals, security films, anti-alteration devices, and laser engraving all make up this type of technology.
– Digital Technologies: Digital technologies consists of several methods of embedding and identifying information in digital files, computers, and electronic devices for protection, identification, and tracking of intellectual property content. Digital Watermarks, Fingerprints, DRM Systems, and Hashing are some of the types best defined in digital technologies.
Benefits of Anti-counterfeiting Technologies
In this age of non-linear competition, Brand Protection is of utmost importance. Prevention of brand abuse is the most important role of Brand Protection, and counterfeiting is one of the gravest forms of brand abuse. Products of brands, both big and small are getting forged and sold illegally and this affects both customers as well as the manufacturers. While it leads to a massive loss on the part of brands, it can also pose a serious threat to customers who at times are not even aware that they are being offered fake products. Imagine shelling out loads of money only to take home fake products (this happens more often than we know). To nip this nemesis in the bud, anti-counterfeiting technologies have stepped up to usher in a win-win situation for stakeholders.
Anti-counterfeiting technologies like those that Cypheme makes provide 360-degree protection to the brands and much more. The Artificial Intelligence-powered labels developed by the company has proved to be one of the best solutions to counterfeiting across a diverse range of industries. The AI technology used is constantly learning, which helps to improve its ability to recognize attempts of fakes by criminal minds. It is an easy-to-use solution where customers are only needed to use the camera of their smartphone to prevent themselves from purchasing fake products.
Cypheme has helped in saving close to 75,000 lives and eliminated over 10 million fake products from markets across the globe. It is the next-generation solution to brand protection and aptly defines why anti-counterfeiting technology is the need of the hour for every brand.