- July 01, 2008, By Mike Fairley
Counterfeiting of packaging and labels has become far easier to perpetuate in recent years. Originally a problem related to items such as currency, passports, identity documents, and payment cards, counterfeiting has extended into the illegal copying and selling of all kinds of branded goods — together with all the associated labeling and packaging — to make the goods appear as if they were genuinely produced by the legal trademark or brand owner.
Computers, scanners, tabletop color printers, and digital cameras have made it far easier to reproduce a brand owner's original label or package. The bigger and better known the brand — and the more the promotion and marketing of it — the greater the possibility of it being counterfeited.
A Global Problem
Put together, global lost revenues through counterfeiting now are said to be close to $1.5 billion a year or about 7%-8% of world trade. More than 200,000 jobs are believed to be lost worldwide because of counterfeiting, and hundreds of people die or are injured each year through ineffective or faulty counterfeited goods such as drugs and electrical products.
Add to that the losses through tampering, diversion, the gray market, and retail theft, and it means brand owners have a major global problem. Any highly visible, well-promoted, branded product is a possible source of attack for the counterfeiter, and it is not necessarily very expensive or highly coveted items.
Although the initial cost of many day-to-day products is quite small — and the return for counterfeiters is low per item — the sheer volumes that come onto the market make them legitimate targets for the counterfeiter. Enforcement expenditures and/or the legal penalties on those caught producing or selling this type of product also may be minimal, making them low-risk targets for the counterfeiter. Having said that, it is generally the well-known brand name products that are most likely to be the ones that reach the headlines.
Brand Protection Solutions
It might be said that adding brand protection technologies into or on packaging and labels is a significant add-on cost to the brand owner and the printer. Certainly it can be if it is done as an afterthought and additional features are added after the package has been designed.
Remember, however, that the package or label needs to be designed at the very beginning: It may have background colors, tints, or images on it; it probably will contain lines or logos and maybe photographs; and it may incorporate various sizes of text or graphics. If the right software package is used in the design and origination of the pack, it is possible today to incorporate various security background designs, micro-texts, hidden images, etc., which are difficult or impossible for the counterfeiter to copy or scan.
In the same way, labels and packages need to be printed, which means using inks and varnishes. Again, there are a range of security-type inks, varnishes, and coatings that can be used during the printing process to discourage or combat counterfeiting or to provide pack authentication: inks that fluoresce or glow under certain lighting conditions; inks that change color in special light, heat, or pressure situations; inks that provide extra thick, raised images; and inks that can be rubbed off to reveal hidden images. There are a variety of solutions the printer can use — even biometric and optically variable inks.
In terms of packaging materials and label substrates, suppliers have developed a range of possible brand protection/authentication solutions: paper and board containing watermarks, special colored security flecks or fibers; DNA impregnated materials; holographic image films, etc., and VOID or tamper-evident label materials.
On the printing and converting line, other security-related features can be incorporated into packaging and labels. Embossed images; perforated images; spot, matte, or gloss varnish areas; rainbow colors using a split duct; security cuts; and micro-perforating. On a label converting line, it also is possible to produce security foiling solutions, on-sert holographic images, and much more.
Bar coding, numbering, and date and batch coding, etc., have long been used as part of today's packaging and labeling, yet the package printer could offer much more to help protect and authenticate packs — special codes that carry much more data than an ordinary bar code, the use of sequential numbers and codes, optical and magnetic encoding, invisible codes — there are many such options, including RFID.
In total, there are many hundreds of brand protection and security solutions available to brand owners through their packaging, label, and technology suppliers. Yet few printers and converters make use of even a small part of this arsenal of technology solutions. Yes, they can add cost to packaging, but if they are designed from the very beginning and not developed as added-cost extras at a later stage, the cost at least can be minimized.
The real challenge for the pack and label printer is to be proactive in suggesting brand protection solutions, in developing unique security applications, in helping to track-and-trace or monitor goods in transit, and in assisting with authentication devices. The earlier this is planned and implemented in the packaging and label process, the better and more cost-effective the result.
Talk to the brand owners and take up the challenges. Develop your markets and opportunities.
Mike Fairley is the author of Encyclopedia of Labels and Label Technology and the RFID Smart Labels — A How To guide book. He was the original founder and managing editor of Labels & Labeling magazine in 1978, and he has undertaken and worked on many market and technology research studies for the label industry's suppliers and converters, as well as for Frost & Sullivan, the Economist Intelligence Unit, PIRA, and Info Trends.
The Counterfeiter's Job
How does the counterfeiter actually work to defraud manufacturers of genuine goods and deceive the purchaser or general public at large? There are a number of routes they use.
Counterfeiting of the whole product range, plus the packaging and labeling
Counterfeiting the packaging and labeling only to enable rejected or out-of-date products to be repackaged and passed-off as good
Reusing genuine packs/labels with counterfeit products
Unauthorized use of look-alike or registered brand names or logos with a counterfeit product
Counterfeiting of ownership/sale/bill of lading documents, including guarantees
Counterfeiting methods of payment for goods, such as checks, credit cards, gift vouchers, etc.
The Role of Packaging
The package designer and the packaging origination and repro house, as well as the package and/or label printer, can play a significant role in the brand protection and authentication process if they work closely with the brand owner and packer.
Build counterfeit deterrence, product authentication, and brand protection technologies into the design of the label or pack.
Look at how to best combine such technologies to provide the most effective overall solution.
Strive to make each individual pack or label unique. This might be through sequential coding, marking, or numbering, for example.
Aim to keep ahead of the counterfeiter by changing the solutions used on a frequent basis — by batch, daily, monthly — even each individual unit if digital printing is utilized.
If you need ideas on the many brand protection and security technologies and solutions available today, attend the 2008 Labelexpo Americas show, September 9-11 in Rosemont, IL, where brand protection and security will have a prominent place — represented by suppliers on the exhibition floor and as part of the conference program.
The show can open new cost-effective routes for you to get ideas and to get started in the challenging world of brand protection. For more information visit www.labelexpo-americas.com.
Additional resources are available at www.pffc-online.com, key words Special Reports and Brand Protection. Our annual special report on product authentication and brand security can be found there.