WHITE PAPER PRODUCT SECURITY TECHNOLOGIES THE ROLE OF BRAND PROTECTION IN PACKAGING AND LABELS AUTHENTIX WHITE PAPER Introduction Whether you’re the seller or the buyer, chances tries where goods are critical to human health are you have encountered counterfeit products. In have been most active in the struggle, while other fact, it’s commonly reported that over 80 percent industries have been slower to move to brand pro- of all global consumers have unknowingly bought a tection solutions. Many are still plagued with the falsified product at some point. counterfeit problem as distribution continues to go global and visibility of the supply chain becomes There is an ever-growing epidemic of product blurred. Implementing anti-counterfeiting solutions counterfeiting in a multitude of industries. This to detect and deter product fraud is easier than poses a very serious problem in areas such as food once perceived. To disrupt such criminal activity, and beverage, medicines, health and beauty, ap- the following steps are necessary: parel and a host of other consumer products. The 1. Understand the size of the problem effects of this product compromise extend to finan- 2. Understand the risks associated with cial losses to brand owners, and more importantly, high-value branded products add risks to consumer health and safety. These 3. Understand the implications to the organiza- falsified products are often produced without tion regard to the correct ingredients, quality control, 4. Understand brand protection technologies and government oversight in place to help ensure and their role against illicit trade consumer safety and confidence. In some of the more impacted markets, such as the Some brand owners built dedicated infrastructure pharmaceutical industry, counterfeiting is estimat- and resources to combat product fraud decades ed at over $200 billion per year according to the ago. Many of those early adopters have seen a World Health Organization. In fact, estimates are vast improvement in the detection and reduction that over 30 percent of all drugs sold in develop- of counterfeit goods in their supply chain. Indus- ing countries are fakes, putting millions of lives Total latest estimated value of global trade in fake goods1 $1.0-$1.7 Trillion USD FY 2017 seizures in apparel/accessories, the largest category seized 15% within all merchandise2 Amount of estimated losses due to global online counterfeiting in $323 Billion USD 20173 Total losses by luxury brands due to online counterfeiting4 $30.3 Billion USD INTA and ICC report indicates counterfeiting could reach by 20225 $2.3 Trillion USD Estimate of percent of counterfeiting products seized originating in 70%-80% China6 Value of the secure packaging market by 20207 $153.9 Billion USD U.S. Customs and Border Protection seized worth $1.2 billion USD8 34,143 Estimate of global jobs lost due to counterfeit goods by 20229 Over 5.0 Million 2 AUTHENTIX WHITE PAPER AUTHENTIX WHITE PAPER at risk daily. However, whether you sell medical organization will typically not be well- coordinat- devices, cosmetics, tennis shoes, fashion watches ed to combat the counterfeiters due to the lack of or baby formula, there are nefarious parties aiming detectability to find and measure the extent of the to profit from faking the valuable brand goods and problem. In the end, the event becomes a recovery designs you have legitimately built over the years. process that could take months or even years to For instance, not only can counterfeit drugs lead to fully address. dangerous health side effects and even death, but publicly known product compromise can also quick- There is good news, however; your company, or ly erode consumer confidence and the value of the your client (if you are a printer or packaging con- brand and business overnight. verter) can start the process of planning and im- plementing product security solutions right away. For the affected brand owners who are late to With the advances of today’s authentication tech- deploy counterfeit protection in their supply chains, nologies, there are a host of experienced brand it is likely that soon the costs of addressing a coun- protection solution providers with global reach and terfeiting incident will rise and create chaos, finan- resources targeting the first line of defense – pack- cial harm, and devastating consequences for many ages and labels. Many of these companies offer stakeholders in the organization. Often brand own- a myriad of solutions that are quickly deployable. ers are caught unaware and don’t have processes Learn how future incidents can be dealt with faster, and protocols in place to deal with these issues that your customers will be safer, and the financial im- weaken and disrupt their business. Moreover, the pact of an adverse product event can be far more different departments and stakeholders within an controllable and mitigated. The Role of Brand Protection in Security Packaging and Labeling In terms of brand protection security applications may go unnoticed until the feature is revealed. -- overt, covert, semi-covert or forensic-- each rep- An example would include a color-shifting ink, as resents a different level of security. This is due to found on many banknotes today. A forensic feature the level of difficulty to identify and duplicate the is only detectable with laboratory equipment. feature, and the complexity of specific detection devices used in authentication. An overt applica- The most utilized type of brand security application tion can be identified by sight. A covert feature is the on-package or on-label approach. Covert uses micro or nano-taggants and can be detected solutions contain some form of taggant in a securi- by using a specialized reader or collection meth- ty ink that is only detectable through a proprietary od. Semi-covert is a visible or semi-visible marking hand-held reader. Products utilizing taggants are which can be seen by the naked eye upon manip- often supplied with this feature in the form of stan- ulation or specialized inspection, but otherwise dard press-ready inks (including over-print varnish- 3 AUTHENTIX WHITE PAPER es and coatings) suitable for direct application or as it is hit or irradiated with light of a different wave- concentrates suitable for blending into plastic for length. In most cases, the emitted light (such as a injection molding, extrusion followed by thermo- laser) is a longer wavelength than the source light forming or blown molding. Additionally, packaging (this is called “down-converting” fluorescence). Flu- or labels can be printed with these security inks orescent inks used for security purposes “glow” in or coatings without having to materially adjust or the IR ranges and are not visible to the naked eye. modify any existing printing equipment or existing This effect is totally reversible and ends once the processes. excitation light source is turned off. Proprietary readers are specifically tuned to look IR fluorescent taggants are the most widely used of for unique optical or other physical elements of a the taggant types due to their high level of security. taggant. These detection devices can be tuned to Standard Type A UV taggants (seen with black light detect multiple special characteristics before inter- sources) are now generally regarded as lower-level nal algorithms make a “yes/no” determination. security, and single-color applied UV marks can be readily located. Such inks are easily sourced on the The most sophisticated optical taggants are usual- open market. However, utilizing highly complex ly from infrared (IR) based fluorescent materials/ UV marks in multiple colors can be an alternative molecules and are detectable by handheld readers. approach to making UV technology much more Fluorescence is the emission of light by matter after secure. Taggants are encoded chemical materials that can be added into inks, coating, films, plastics or other package elements. Similar to a fingerprint, this covert feature is virtually impossible to duplicate. Two types of taggants 1. Optically readable - can be read by a proprietary device 2. Forensic - requires laboratory analysis Continuous Inkjet Covert Ink 4 AUTHENTIX WHITE PAPER AUTHENTIX WHITE PAPER Today’s Product Security Technologies - What You Should Know Traditionally, anti-counterfeiting security solutions authentication data either via the internet can be categorized into five different platforms: or through a proprietary localized database. 1. Overt security - features you can see As decades of experience in the areas of security without devices documents, currency, and product anti-counter- • Holograms feiting efforts have shown, there is no single “silver • Color-shifting inks bullet” technology that can be applied across the • Simple codes board for all products. Usually a multilayered ap- • Watermarks (in paper) proach (as used in currency) is the most effective long-term. Of the five categories of anti-counter- 2. Covert security - features you can see feiting solutions listed, the prevalent technology only with proprietary devices implemented and most often recommended is • Advanced infrared (IR) taggants “on-package” or “on-label” solutions consisting of • Ultraviolet (UV) inks specialized inks or substrate markers. • Complex codes • Laser-activating inks Conversely, direct product chemical or physical • Hidden image technology testing is the least routinely utilized method but • Invisible taggants embedded in is often the last step to forensically determine substrates authenticity if no other method is deployed. It is important to keep all five categories in mind when 3. Semi-covert - features you might not selecting an anti-counterfeiting solution. Your notice until they are pointed out decision should be based on the understanding • Pantographs of the overall risks and objectives of said product • Micro text such as appropriate applications, solution cost and • Metameric inks overall public safety factor. In some cases, a simple • Scrambled indicia color-shifting ink and hidden IR code might be best • Special-effect inks for one product line, while a tamper-evident seal • Coin-reactive inks with an invisible IR ink might be better for anoth- • Thermochromic inks er.