Security Printing and Imaging : Counterfeiting

EFPIA Announcment, HP Hosting Services

StevenSimske — Mon, 26 Oct 2009 17:31:00 GMT

Remember the 24 August announcement on the HP/GS1 food recall service? If not, please enjoy as if new the following article:

http://www.communities.hp.com/online/blogs/securityprinting/archive/2009/08/25/big-news-hp-develops-cloud-service-with-gs1-canada-to-enhance-product-recall-process.aspx

This announcement introduced the HP Cloud Computing Platform for Manufacturing, as described here:

http://www.hp.com/hpinfo/newsroom/press/2009/090824xb.html

More on the overall solution, including the roles of partners Siemens, SAP and HP, is provided at:

http://www.controlglobal.com/industrynews/2009/278.html#

"In the EFPIA pilot project, Siemens IT Solutions and Services is the general contractor in cooperation with Hewlett Packard (HP) and SAP. The IT service provider is responsible for the project management and integration of the information interfaces between the pharmacies and the manufacturers. Siemens IT Solutions and Services is also responsible for operating and maintaining the IT infrastructure, including the technology and information systems, data integration, system security and system development. SAP Belgium will be in charge of the SAP object event repository (SAP OER) and the implementation services. Hewlett Packard (HP) will provide hosting services and SAP solutions testing."

The hosting services are through the HP Cloud Computing Platform for Manufacturing, as described earlier. Feel free to contact me for details.

Cheers,

Steve

EFPIA Announcements

StevenSimske — Mon, 26 Oct 2009 17:12:00 GMT

Hi, all

The next few blogs will point you to information on the recent announcement of the EFPIA 2D labelling scheme. The EFPIA is the European Federation of Pharmaceutical and Industries Association.

In-Pharma's article on this announcement is:

http://www.in-pharmatechnologist.com/Packaging/2D-barcodes-make-faking-less-attractive-says-EFPIA/?c=JiBz%2FX6W8967KGa2Liah%2FA%3D%3D&utm_source=newsletter_daily&utm_medium=email&utm_campaign=Newsletter%2BDaily

Importantly, as our partner Siemens notes,

[Siemens] "will provide connectivity for pharmacies and manufacturers to the EFPIA database, which is hosted by Hewlett Packard (HP). Manufacturers will populate the EFPIA database with the serial numbers of the saleable units shipped, and pharmacies will read those serial numbers at the point of sale (via 2D barcode) and authenticate the unit sold against the EFPIA database."

In other words, the cloud enables the crowd. 2D barcode readers are not just in the hands of the pharmacists. Look for us all--corporations, enterprises, brand owners, shippers, retailers, consumers, environmentalists--to embrace this approach. It helps level the playing field for everyone, except--one hopes--the counterfeiters.

Cheers,

Steve

Variable Data Printing and Improved Pharma Product Protection and Brand/Customer Interaction

StevenSimske — Wed, 14 Oct 2009 04:18:00 GMT

My previous post was a link to the excellent In-Pharma Technologist blog edited by Nick Taylor. Nick solicited a posting from me back in April, but I could not find it on In-Pharma, so given a 1/2 year grace period, I think its time to post here:

Variable Data Printing and Improved Pharma Product Protection and Brand/Customer Interaction

Pharma brands are concerned with the integrity of their product. All successful pharmaceuticals have one thing in common: they improve the quality of life of the customer. Counterfeit pharmaceuticals, on the other hand, are harmful to both the customer and to the manufacturer; that is, they can simultaneously destroy lives and jobs. Brands pay many times over for counterfeits: loss of original sale, loss of future sales due to erosion of consumer confidence, loss of market capitalization due to perceived non-efficacy of the product, and potential legal recourse as a consequence of the consumer receiving phony goods.

All pharmaceuticals share another important thing in common. Information about the product must accompany the product. From packaging to labels to inserts, this information is conveyed by printing. Therein lies the solution to the problem.

Printing is pre-adapted for its use in security. Useful already in product identification, the variability printing provides is a natural fit for security. Variable Data Printing, or VDP, is the technology enabling the varying of every aspect of a print job. This is advantageous for individually tagging an item—a process called mass serialization. Mass serialization is a means of ensuring that each label, package or document contains a different identifier that can be read (which means interrogated and the data encoded successfully interpreted).

However, VDP can be used for far more than mass serialization in protecting a product. With security VDP, or SVDP, the different printed regions—be they text, image or graphics—contain not just variable data, but usually uniquely variable data. Also, this variable data can be (but isn’t always) read by some type of inspection, authentication or forensic device. That is, every variably printed region contains not just data, but security information. Thus, every region is novel, or unique identified, and so capable of being interrogated for its information.

To prevent counterfeiting, brand owners need to provide a moving target for the would-be counterfeiters, staying one step ahead of them in the deployment of security features. However, this is a tedious game, and often expensive, as brand owners continually research and purchase new deterrents. SVDP offers, however, an innate moving target—the ability to change the very nature of the variability on the fly. With SVDP, a moving target of deterrents is obtained without having to change the technology.

Linking or hybridization is how the set of variable features relate to one other. Examples of deterrent relationships include replication, hashing, sequence fragmentation [sharing the mass serialization data between two or more variable regions], and other techniques for making the multiple variable regions “cooperate” with each other. One particularly powerful method is to use one deterrent—usually one already used for track and trace or point-of-sale—as the registry “look up” sequence from which the signed-in user may then obtain information on one or more other variable regions. The method of hybridization can be changed from one print job to the next, meaning that the would-be counterfeiter must replicate all of the variable features which are monitored to be able to pass the phony product as authentic. Which “extra” features are actually monitored can be varied from day to day, making compliance both simple and thorough.

Monitoring information-containing printed images is getting easier every day. The near-ubiquity of camera-enabled mobile devices, therefore, strengthens the value of SVDP. Already, bar code interpreting software is native or readily downloaded to most internet-enabled mobile devices. Piggybacking image authentication services for other printed patterns is straightforward to implement.

Different variably printed regions can be used for track and trace, authentication, forensics, recall and other contingencies, or just to decoy the would-be counterfeiters. The way in which deterrents relate can be tied to pragmatic product details. For example, if the shelf life of a product is six months, it makes sense to change the relationship between deterrents every six months, so that expired products also exhibit “expired” security strategies. In the meantime, if certain deterrents are being successfully attacked, then adding new variability to the printed material is another way of gathering information on who the counterfeiters might be—insidious insiders, for example, may quickly incorporate these new variable regions, even if they are not tracked by your authenticators, and so tip their hand to you.

Incorporation of SVDP into the printing is straightforward, as there are only three rules: (1) meet compliance standards first, (2) vary several additional regions, and (3) change the relationship between the variable regions (hybridization plan) frequently.

Counterfeiters know all about SVDP, and they’re reading this and other related articles. Recall that there is no security through obscurity—counterfeiters reading this will know what they’re up against, but will not easily be able to spoof SVDP, except one item at a time (which makes the cost of counterfeiting higher). Thus, SVDP offers a means of staying one step ahead of the counterfeiters without running yourself ragged.

Cheers,

Steve

Are you willing to take a placebo 1/5 of the time?

StevenSimske — Wed, 14 Oct 2009 03:46:00 GMT

According to the World Health Organization (WHO), 10-30% of the medicines in the developing world are counterfeits. I assume this means addressable counterfeiting--counterfeiting to which the buyer is oblivious.

http://www.in-pharmatechnologist.com/Materials-Formulation/USP-targets-counterfeits-in-Cambodia/?c=ZS6DWN3IZ%2FJ7P5ONPLFYaw%3D%3D&utm_source=newsletter_daily&utm_medium=email&utm_campaign=Newsletter%2BDaily

Different, caring organizations around the world (see previous blog postings on NAFDAC, for example) are addressing local problems. In the case of the article linked above, the USP and USAID are messaging counterfeiting as a crime "against humanity, against you". A fair assessment. Cambodia and other developing countries will also reasonably address anti-counterfeiting since it is also a huge economic hit for their countries, even if their country is a "net counterfeiter" (i.e. their country makes more money exporting counterfeit goods than they lose on sales of counterfeit goods within their country--this may be true, for example, of China).

Why? Because counterfeiters by definition target monetized transactions. And people with money to pay for what they feel are legitimate pharmaceutics are more likely to be tied into the legitimate economy of the country, and thus adding to the GDP (and thus actually developing these developing countries).

Countering counterfeiting, then, protects those who are bringing progress to the developing world. Want to prevent terrorism? Then stop counterfeiting! What better way to nurture a democracy than to support legitimate purchasing. The alternative is loss of faith in the processes of the "free" market. There are, of course, legitimate reasons to lose this faith (look at the current financial crisis caused in large part by the creed of greed in the US financial sector and other locations--obviously some limitations/safeguards are needed), but counterfeit pharmaceuticals should not be one of them.

Cheers,

Steve

Thanks to my friend and colleague, Martina Trucco, for the link

5th Global Forum on Pharmaceutical AntiCounterfeiting

StevenSimske — Sun, 02 Aug 2009 04:32:00 GMT

Reconnaissance International's 5th Global Forum on Pharmaceutical Anti-Counterfeiting is being held in Miami 24-26 February 2010. Details on the event, including submitting a paper and information on the sponsors, is available at:

http://www.regonline.co.uk/builder/site/default.aspx?EventID=751954

One theme of this conference is in "addressing the role of the patient in fighting counterfeit medicines and related products".

Interestingly, the conference overlaps with Graphics of the Americas (February 25-27, 2010, in nearby SoBe district of Miami Beach), which also features an excellent Brand Protection Conference. See:

http://www.graphicsoftheamericas.com/media/news.html

for details. If one of these conferences isn't enough to get you down to Miami near the end of winter, why not the pair?

Cheers,

Steve

A Massive Step Forward on Mass Spec

StevenSimske — Sun, 02 Aug 2009 04:11:00 GMT

Do you get a product from a trusted brand that just doesn't work right? Chances are pretty decent that your brand has failed to keep counterfeits out of its supply chain. Should you still trust your brand? Hard to tell--surely the brand shares some of the culpability for letting the counterfeits into the supply chain. But it's a bit like faulting the clerk at the convenience store for the hold up at gunpoint.

However, the loss of confidence in the product can be fatal. In Africa, for example, malaria kills more than 2,000 children a day -- A DAY -- or nearly a million a year. The medication can be distributed, but no one can trust the supply chain. A recent New York Times article (http://www.nytimes.com/2009/07/21/science/21coun.html?_r=1) describes an advancement in mass spectroscopy that makes forensic analysis of large quantites of pharmaceuticals more feasible.

"For years, scientists have been able to analyze the ingredients of a pill or capsule using mass spectrometers, which identify chemicals by measuring molecular weights. But the overall process was time-consuming, taking about an hour per sample. A scientific breakthrough in 2005 added an “ion gun” to the machines and allowed Dr. [Facundo M.] Fernández to check hundreds of pills a day. A technician simply holds the sample — a pill, dog food or a dollar bill, for example — up to the machine, which emits a jet of helium gas and captures a minute amount of the material, instantly identifying its component parts."

Any technology that helps make on-the-spot assessment of product integrity possible is not only helpful--it's quite possibly life-saving.

Cheers,

Steve

[Thanks to Margaret Sturgill for the link]

HP Gets Tough on Ink Counterfeiters

StevenSimske — Sat, 30 May 2009 05:19:00 GMT

Counterfeiting is like the proverbial bad apple in the barrel. One rotten item ruins the lot. Take this case, for example:

"Customers were irate about defective HP ink cartridges purchased from her firm. Several big corporate customers told her they spent days cleaning up leaky ink. The buyer for one local municipality was so furious about damage to the city's printers that he canceled his contract. She began to worry: Perhaps the $40,000 in ink cartridges her company had purchased at a 10% discount from an Internet supplier were fakes."

Frequent readers of this blog see it coming. Any discount "too good to be true" isn't. And, HP's ink detectives quickly assessed this.

REAL or FAKE?

The full article is on BusinessWeek.com at http://www.businessweek.com/magazine/content/09_23/b4134044747987.htm.

My friend and colleague Peter Hunt is featured. Peter is a top-notch investigator and works with a world-wide team to counter counterfeiting. He could, if he chose, deliver a nasty crosscheck, too. Like me, Peter is a hockey guy. However, Peter's violence will have to remain on the fabled northern (1 degree latitude north of the Equator, that is) ice sheets of Singapore, since he and team are focused on putting the evidence together to point the authorities at the biggest counterfeiters.

How big a problem is counterfeiting?

According to the article, "Combating counterfeit ink has become a major priority for HP CEO Mark V. Hurd. Analysts estimate the Palo Alto (Calif.)-based company's imaging and printing group lost more than $1 billion in revenue to illegal counterfeits last year. And the company is concerned that shoddy products will do even more damage to its reputation. 'Counterfeit cartridges hurt HP's business,' says Hurd. 'More importantly, they hurt our customers, who are not getting what they think they are paying for.'"

$1 billion in revenue, and perhaps another $1 billion in lost brand value, and another $1 billion in future revenue due to loss of customer confidence, etc. Counterfeiting is the rotten apple, and the barrel is the brand reputation. Thanks to Peter and team for helping protect this barrel (and the way he skates, perhaps jumping over the barrel, too).

Cheers, Steve

HP seizes 818,000 fake cartridges in Middle East, Q1 2009

StevenSimske — Mon, 27 Apr 2009 03:16:00 GMT

"HP has confiscated 818,000 counterfeit printer cartridges from outlets in the Middle East in the first quarter of 2009":

http://www.business24-7.ae/articles/2009/4/pages/15042009/04162009_4c79bcc2b0724e96a490ba5e574a3c5a.aspx

This constitutes roughly $20 million in counterfeit cartridges. Multiply it by 4 quarters and you get $80 million in seized cartridges, just for this region, for the year. Obviously, HP is a huge target for counterfeiters.

"HP is also auditing 50 per cent of its channel partners checking on counterfeit products. The counterfeit cartridges come from China and are also made in the Middle East. Ernest Azzam, Business Manager, laser and enterprise solutions at HP Middle East IPG, said: 'Counterfeit is happening not only at a cartridge level but also repacking of printer boxes. The reason it is so rampant in this region is the growth and sales have increased tremendously.'"

In other words, there is good news. New sales opportunities, new markets, and new competitors. The bad news is that, increasingly, the new competitors are counterfeiters.

Cheers,

Steve

There is no Security Through Obscurity

StevenSimske — Sun, 19 Apr 2009 15:43:00 GMT

In case you were wondering, "there is no security through obscurity" is a common phrase used by security practitioners. It means that the security community cannot rely on keeping the security approach secret, and instead must advertise the mechanism for security but keep the "keys" to the security transaction protected. Public/private keys and a PKI (Public key infrastructure) provide a generally successful means of "fully transparent" security.

Why not security through obscurity? Let's just say that plays right into the would-be counterfeiter's hand. Jason Aronoff sent me a link to this set of technologies by Arcadia Identification, for example:

http://www.arcadiaid.com/index.php?main_page=product_info&cPath=2&products_id=3

The Original 'Do It Yourself' Home ID Kit

"This kit includes everything needed to make ten identification cards from home by using any printer and computer. Included in this kit are 3 sheets of Teslin or Artisyn NanoExtreme Synthetic Paper, 10 butterfly pouches, ten holograms, a pouch laminator, and sand paper. Your kit can be customized in many ways below. The price of the kit includes the 5% discount. Microperforated Teslin or Artisyn inserts make the process twice as easy! Identification cards created with our kits have many uses. They are commonly used as a secure, tamper proof means of creating ID for small businesses and private schools. Magnetic stripes can be encoded for door access. They are also commonly used as luggage tags. See our Complete ID Tutorial for more information."

Seems innocent enough, on the surface. But scroll down a bit and you see "Add a Razor Knife"...meaning an X-Acto knife. Hmmm. Seems that is a tool more suitable for altering an existing ID than "creating ID for small businesses and private schools".

In case you think I'm being unfair, see the related link:

http://www.arcadiaid.com/index.php?main_page=page_2

which notes "Wallet-sized cards such as driver licenses, credit cards, and your supermarket rewards card are all 3-3/8" x 2-1/8". The materials included in our kits will show you how to make a card this same size."

Sure, there are many legitimate reasons to purchase the Arcadia ID kit, but the salient point is that the technologies to spoof legitimate products are easier and easier to get in this day of Internet commerce, distributed supply chains, aggregated brands, etc. The means to replicate technologies are in the hands of everyone once they're available to anyone. Either through the internet or through inside jobs.

Does this mean high-end overt technologies such as DOVIDs have no place in security? Hardly. When a would-be counterfeiter attempts to "spoof" them, they give away important clues that will help track them down and be usable for evidence. But, complementing the high-end overts with tamper-evidence, unique ID and other copy-detecting deterrence is a safer strategy than obscurity.

Cheers,

Steve

Visit to Princeton

StevenSimske — Sun, 19 Apr 2009 15:33:00 GMT

A heartfelt thanks to the Princeton area ACM/IEEE for hosting me last Thursday to present:

Security Printing and Imaging: Stopping Counterfeit Products

Counterfeit products are a growing problem. Since counterfeiters usually target brands, many companies have developed expensive methods of combating counterfeiting in order to protect their brands. But a better technology might simple printed labels. Consumers may use their camera phone on printed product label to retrieve product information. This talk also gives an overview of the science of security printing and imaging -- from classification to the use of color, and the implications for the future of customer/product interaction.

Apparently, this was the last ACM/IEEE lecture at the Sarnoff Corporation, as they will move to campus next year. Thanks so much to Rebecca Mercuri, Jan Buzydlowski, and everyone else at Princeton for a very pleasant evening and many excellent questions and discussions.

Please see: http://www.acm.org/chapters/princetonacm for more information on this talk and other talks in the meeting series.

Thanks also to my wonderful colleagues at HP Labs Princeton for hosting me, and to my teammate, Matt Gaubatz, for making the trek down to Princeton to meet!

Cheers,

Steve

Where in the World is the Counterfeiting?

StevenSimske — Tue, 07 Apr 2009 04:52:00 GMT

In-Pharma Technologist has an answer to that query. In the form of an interactive (Google) map, to be sure. Find out more about counterfeit-related events, legislation, education, technologies, investigations using the interactive map at:

http://www.in-pharmatechnologist.com/Industry-Drivers/Interactive-map-of-global-counterfeiting-events-in-Q1/?c=JiBz%2FX6W894V65M0E758RQ%3D%3D&utm_source=newsletter_daily&utm_medium=email&utm_campaign=Newsletter%2BDaily

"Examining the map reveals the hotspots for counterfeiting seizures and arrests, although limited reporting may mean some areas are underrepresented, and the actions countries and companies are taking to tackle the issue."

Cheers,

Steve

Who is responsible for eBay fakes?

StevenSimske — Wed, 01 Apr 2009 20:52:00 GMT

The big Internet auction site, eBay, claims it "has delisted millions of items and suspended tens of thousands of seller accounts last year". Tiffany, however, is suing eBay, claiming they do not adequately police their own site. A good summary of the case is provided at:

http://www.thestandard.com/news/2009/03/19/are-rights-owners-too-demanding-online-sellers

The crux of eBay's argument is that they remove anyone who posts counterfeit goods more than once, and that they never actually touch the product. This defense would be stronger if they didn't add: "eBay never has physical possession of the items in question, and with the number of listings processed through the site annually, policing counterfeit goods would be impossible". That, quite simply, is wrong.

Traveling through time is impossible (otherwise someone would have saved Lincoln's life). Eating dinner before 7 PM in Paris is impossible (Make that 8 PM in Nancy). Self-contained perpetual motion machines are impossible. But, protecting products through the requirement of full provenance records through registry with a trusted third party is possible. It's just onerous.

eBay uses PayPal, electronic passwording, and other security approaches for authorization, validation and secure transactioning. It is not defensible, then, that they cannot possibly provide track and trace/provenance.

In fact, part of eBay's defense is "[eBay] reports that 2.1 million listings were removed in 2008 based on VeRO reports, and 30,000 sellers suspended". Doesn't this imply they are simply playing whack-a-mole? Time to treat the disease and not the symptom.

This is not to single out eBay. Compare their counterfeiting rate to, for example, AliBaba (http://www.alibaba.com/). Indeed, all companies involved in electronic commerce (and that is any company with a web presence, which is closing in on 100% of commerce) should be worried about this. eBay's solution can be Barnes and Noble's solution, Abercrombie and Fitch's solution, Dean and DeLuca's solution. There is nothing exceptional about eBay's inability to shut down counterfeiting; that is, as a web "bazaar" they are simply aggregating more counterfeit sources in one place.

I routinely speak with CxOs of branded companies. After giving the overview of how HP "practices what it preaches" on brand protection and anti-counterfeiting, I will often get a bemused smile and the comment, "Interesting. Well, we don't have a counterfeiting problem, but I'll definitely contact you if we have one later." It amazes me, then, how these same companies have no provenance system in place, no supply chain investigation team in place, and no auditing system in place. We've recently seen what the lack of adequate auditing has done to the world's financial institutions.

If anything, web-based commerce (due to the ability of bad guys to be in another jurisdiction) is more prone to counterfeiting. Web-based commerce, therefore, should be leading the way for track and trace, not throwing up its hands. "Stopping" counterfeiting after it's happened is not a solution. It's not about eBay, it's about eBuying.

Thanks to Margaret Sturgill for the link.

Cheers,

Steve

HP Anti-Counterfeiting Site

StevenSimske — Mon, 09 Mar 2009 00:30:00 GMT

Those of you interested in seeing how a big brand (in this case, HP) advertizes its anti-counterfeiting overt deterrence, please take a look at:

http://www.hp.com/sbso/product/supplies/whybuy_fraud.html?jumpid=ex_R295_go/anticounterfeit/supplies

Please click on ">>See Demo Of Ink Package" to see our training/information video.

The deterrents shown on this link provide the three key functionalities of a successful brand protection and anti-counterfeiting deterrent, as described in previous blogs:

1. Unique identifier (in this case, the 10 character unique number on each medallion)

2. Copy-prevention (since the overt deterrents are color-shifting, they lose this capability when copied)

3. Tamper-evident. These deterrents are damaged when peeled from the package, and destroyed when the package is opened normally (by an underlying tear strip). Sure, an assiduous counterfeiter can probably re-use the medallion, but it will take time and effort. Legitimate users are "encouraged" to destroy the label when they open the package.

Also of interest is the definitions of counterfeiting and fraud:

Counterfeiting--unauthorized application or use of a trade mark on goods that do not originate from or with approval of the brand owner. The "intent to deceive" is also very important. Note also that counterfeiting is NOT the same as refillingor remanufacturing, which are fully legitimate businesses. Fraud--all acts decieving or intentionally misleading. Counterfeiting is therefore a subset of "fraud".

Cheers,

Steve

Price too good to be true? Then indeed it is...

StevenSimske — Sat, 28 Feb 2009 15:28:00 GMT

I have spent the last two days at the Brand Protection conference here at the Graphics of the Americas (http://www.graphicsoftheamericas.com/conferences/bpc.html). With the world's economy in a tailspin, there have been numerous discussions of how unemployed but creative people can find ways to augment their diminishing incomes. Sure, counterfeiting is one we focus on here, along with product diversion, smuggling, package reuse and warrantee fraud. Often forgotten in the mix is the creative thief in your retail store's front lines--the sticky fingers in the cash drawer.

One scenario is when the rogue at the register brings a few extra coupons to work, and every time the associated item is sold--voila!, magically, the customer has the right coupon for a reduced rate. Security printing--the use of microtext, void pantographs, and other copy prevention/copy voiding methods will help you tell which teller is tolling the till.

Your tellers, quite likely, are the most honest folks in your store--or in your "web presence". Retail crime, not surprisingly, is on the rise. A recent Yahoo article gives an overview:

http://news.yahoo.com/s/nm/20090225/us_nm/us_usa_retail_crime

"Consumer demand for hot new products at huge discounts is fueling organized retail crime, with goods stolen from retailers finding an audience in secondary markets like the web, a retail trade group said. High on the list are the latest video games or trendiest new handbags that can be easily resold. The demand for product at a reduced price is significantly up. Consumers are looking at alternative resources to find products. Unfortunately consumers and the economy are fueling a drive for this illegal or anonymous commerce that is taking place across the country. Black markets for stolen goods can be deceptively bright: flea markets, swap meets and corner markets teeming with bargain hunters, as well as online auction sites like eBay Inc and classified sites like Craigslist.com, accoring to one expert."

As you might expect, there will be legislation to fight this. "Three federal anti-retail crime bills are expected to be introduced this week in Congress, designed to give law enforcement more authority to fight organized retail theft, including online." And EBay contends that they have "been working cooperatively with other companies and law enforcement in order to fight the online sale of stolen goods." EBay called "discriminatory the legislation soon to be introduced in Congress. These bills are less about fighting shoplifting and more about big box retailers wanting to crush legitimate small-business online competition that delivers real value and greater choice to consumers."

The article continues:

Craigslist called misuse of its site for illegal purposes "absolutely unacceptable" and cited its work with law enforcement to combat it. Criminals are unwise to use craigslist, since they create an electronic trail to themselves that police can follow," said Chief Executive Jim Buckmaster in a statement...An estimated nearly 40 percent of goods sold on auction websites advertised as "new in box" were stolen or fraudulently obtained.

The FBI, in fact, estimates that "U.S. retailers lose $15 billion to $30 billion each year from organized retail crime. To combat the escalating crime, retailers have been using global positioning systems (GPS) to track cartons and suspect vehicles. They are also hiring staff from law enforcement, sharing intelligence information and putting their investigators through specialized training, the NRF said. But lower staffing levels at stores trying to cut costs are leaving a door open to some criminals."

In other words, the Yahoo article portrays a situation in which every sale or potential sale is a battle between the legitimate producer and multiple sources of fraud--from theft in-store or in-transit. It doesn't have to be this way. And, in the case of foodstuffs, pharmaceuticals, airplane parts, automobile parts, and many other products where "sticking it to the man" could end up creating another victim, it simply shouldn't be. Trying to roll back the clock is a self-defeating approach. Products will be sold in brick-and-mortar and on-line. Qualify your on-line sales, and let customers have access to the product-unique and brand-registered variability on that unique product before and after the sale. It will allow you to find the fraud faster.

Benny Landa famously said "everything that can be digital, will be digital, including printing." More germane to this discussion, everything that can be variable, will be variable, and every variation that can be interrogated, will be interrogated. Make that variability count. It's one way to catch a thief--in-store or on-line.

Cheers,

Steve

World Economic Forum and Counterfeiting

StevenSimske — Wed, 04 Feb 2009 18:46:00 GMT

A quick set of thoughts from the World Economic Forum meetings in Davos last week (http://www.weforum.org/en/index.htm). The first addresses Threats to Security: "The cross-border flow of global proceeds from criminal activities, corruption and tax evasion is well over US$ 1 trillion, with illegal drugs and counterfeit goods each estimated to account for about 8% of world trade. Global Agenda Council Members and experts examined the impact of a global economic slowdown on the growth of illicit activities and transnational crime."

This is a not-surprising but still stunning admission of the extent of the competition. Which is what counterfeiters are to all of you trying to make products that legitimately offer the brand quality they (supposedly) represent. Scary--8%. The GDP of Mexico ( http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) ).

Next, from the session on Organized Crime: "Organized crime is a huge and growing business that pervades societies, undermines countries, encourages wars and deepens poverty in developing countries. The global economic crisis affect some of its operations, such as prostitution and recreational drugs, as the money available to clients dries up. But as a highly opportunistic conglomerate, it looks for commodities in short supply and is already moving into the credit business, stepping up loan-sharking operations for small businesses that can no longer obtain funds from banks and other legal sources. Counterfeiting of consumer goods will also rise sharply."

What a shock, then, that there was "consensus that with the economic crises, we will observe a sharp increase in counterfeiting, as argued by Naim Moises and Richard Noble from Interpol." Speaking of Mexico, one Common Internet rumor is that it will collapse this year...http://www.strategypage.com/dls/articles/The-Coming-Collapse-2-2-2009.asp. Is there an Internet term for "urban myth"? Hmmm...http://www.elpasotimes.com/ci_11606866?source=rss. Regardless of what happens to Mexico, imagine what its collapse would do to the world economy. Its manufacturing and oil alone put it in an elite list of economic powerhouses. The key point is that the counterfeiters are now as big an influence on the world economy as Mexico. Much as the world will work to help keep Mexico from collapsing, the world will work to make the counterfeiting menace go away...

Thanks to Justin Picard of Advanced Track and Trace for the update on the WEF. --Steve