Daily Archives: August 29, 2008

Protecting Your Brand From Counterfeiting

A few months ago in Does Trouble-Free Mean Fraud-Free, I pointed you to a recent study by Kroll that found that, in some sectors, fraud in the supply chain has increased five-fold in the last six years. Even though these numbers include fixed asset fraud, inventory fraud, distribution fraud, and return fraud, a lot of this fraud, especially in certain sectors (like pharmaceuticals and CPG) is manufacturing — and counterfeiting — fraud. This is because, as a recent Industry Week article points out, counterfeiting is one of the largest and most profitable businesses in the world.

The article quotes YottaMark, a SaaS-based innovator in security coding, who estimates the direct loss due to counterfeiting of technology products alone at over $100 Billion a year, as 1 out of every 10 technology products sold in the world is counterfeited. For example, even before the iPhone 3G was released on July 11, hundreds of iPhone counterfeits were available overseas, for less than half of Apple’s suggested retail price, as reported in the Irish Times.

So what can you do to protect your brand? The article suggests turning to a trusted partner that specializes in brand protection solutions, like YottaMark or Brady Corporation that offer a combination of overt, covert, and semi-covert technologies that uniquely identify your products.

Overt technologies, like holograms or color-shifting ink, include a clearly visible mark of authenticity on the product; covert technologies, that include hidden bar codes and images, allow the product to be authenticated by a trusted party using a specific tool or knowledge of what to look for; and semi-covert technologies blend overt and covert features into a multi-faceted security solution that can be used to instill trust in the consumer and in trusted supply chain participants.

I think the article is on to something here. Sure you could follow the lead of big corporations and create brand protection teams and do your own research into overt and covert technologies to protect your solutions, but how well are you going to do on your own when there are a number of disreputable organizations out there that dedicate all of their resources to cracking the latest security technology? Not well. In comparison, a partner company that is 100% dedicated to creating the best security and anti-counterfeiting technology possible will be years, if not decades, ahead of you and using their solutions will make your products much more secure than you could make them on their own. It’s sensible outsourcing — do what you do well, and outsource the rest to a partner that can do it better, faster, and, most importantly, more cost-effective.