Holly Gilbert | Security Management

Every year, a staggering $250 billion is lost in the economy due to counterfeit goods being produced and sold in the globally, according to the Organization for Economic Cooperation and Development. Many of those fake goods are touted online, which is all the more reason both retailers and consumers should be on the lookout for counterfeit goods during the holiday shopping season, says Neil Alpert, chief executive officer of Laserlock Technologies.

“The Internet—while we all love it—is also the best friend of the counterfeiter,” says Alpert, who explains that online shopping puts a distance between the consumer and the item, leaving the buyer unable to evaluate its authenticity. “If you think about it, you go online, you buy an item, you never see the person who’s selling it to you, you don’t know where they’re located; you don’t actually get to see the physical item until it arrives at your house.”

Alpert says that counterfeiters are masters at quickly setting up Web sites to sell their items, and can take them down in a matter of seconds. “The other thing about online shopping is that by the time that product is shipped to you, the person on the other side of that Web site could be gone. That Web site is closed down today, a new Web site is open tomorrow,” he says.

Fortunately for consumers, the U.S. government is cracking down on such sites as they’re discovered. Alpert says that Immigrations and Customs Enforcement (ICE) has shut down a number of Websites selling fake goods. “Seven hundred websites selling fake counterfeit goods have been shut down in the last three weeks alone, and those are the ones they can find when they shut one down a new one comes up,” he says.

While there are federal efforts to squelch online retailers selling counterfeit products, Alpert says both businesses and consumers should take a proactive approach to safeguarding what they buy and sell. “There are technologies and ways out there today that could cut down that number significantly. I would be lying if I said it could be cut down to zero, but it could be cut significantly,” he says.

LaserLock Technologies provides one such solution called BrandGuard, a tracking system achieved through the printing of numbers on items and packaging. “The way BrandGuard does that is through something called item level serialization, where every item that a legitimate brand produces, let’s say Louis Vuitton or Pfizer as examples, every package of medicine that Pfizer produces will have a unique serial number associated with it, and throughout the demand chain and right to the end user that item is able to be authenticated,” says Paul Donfried, chief technology officer at LaserLock Technologies.

 

Donfried explains that the solution works for the consumer as well, who can verify the product they are buying is legitimate through an authentication app. “In the case of an online merchant, the consumer could ensure that the online merchant makes the image of that mark available to them, and they can then locally authenticate it through their browser, and then what that can do for the consumer is verify that one, yes this is an authentic genuine article, and this particular merchant has been authorized by that brand owner to sell it.”

LaserLock Technologies has developed their product to make the serial numbers nearly untraceable to counterfeiters to prevent duplication. “We’ve taken two approaches to try and secure [BrandGuard] and make it resilient. One of those is to leverage the security pigments and inks which were our core products that we introduced in 1999” Says Donfried. “Those products allow us to put invisible marks onto products and packages that can be authenticated. And we’ve developed image processing technology that allows us to take conventional smart phones and use those to authenticate and recognize those invisible marks.”

Secondly, the company leverages encryption to ensure that the tracking number, even if detected, would be meaningless to a counterfeiter. “Rather than simply putting open marks onto the packages and products, we take the serial numbers that are unique to each item and we use advanced cryptography to encrypt those,” says Donfried.

The encrypted numbers are then put into a machine readable format, such as a barcode or GS1 DataMatrix. “What that produces is a system where, even if the counterfeiter is able to detect the mark, and even if the counterfeiter is able to recognize the mark, once they decode the QR code or the GS1 DataMatrix, they’re left with the encrypted blob and they have no way of determining what that encrypted blob represents.” For anyone authenticating the product with LaserLock’s app, a request is sent to a cloud service where the barcode or GS1Matrix is verified.

Laserlock Technologies is still in the process of rolling out the full components of BrandGuard, including the app for consumers to crosscheck retail items. Donfried says there is a lot of change already occurring on the side of the retailers in order to get BrandGuard fully up and running. “We have the central components of BrandGuard in place today. There are additional pieces that we continue to develop and work on and add into the system, but the core capabilities of the system, the cloud services for managing, the item level serialization, the inks and dyes for creating and applying the marks, the interfaces for the printing systems, those things exist today and we’re in the process of working with customers currently under nondisclosure,” he says.

Fighting Counterfeiters During the Holiday Season