In 2011, everything is being counterfeited, even beer. So noticeable was the trend for imported fake brews that the Australian Customs and Border Service made particular mention of it in its 2009/10 annual report. It demonstrates just how far beyond the ubiquitous imitation Louis Vuitton bags counterfeiting has spread. In fact, while the retail value of all counterfeit goods seized by Australian Customs in 2009/10 was estimated at over $37 million, a February 2011 report by Frontier Economics estimates the global value of counterfeiting and piracy at US$650 billion annually.
While the dollar value of the black market may be ticking through extraordinarily high numbers, there are new technologies rolling out to help catch counterfeiters at every turn. Unlike years past, these technologies are now so tiny they are smaller than a grain of sand, small enough to be incorporated in fashion products without being visible to the eye.
One company producing many of the new technologies is DataDot, a publicly listed Australian business headquartered in Sydney. DataDot general manager of business development, Greg Gothard, says it is the company’s DataTraceDNA product which offers the most exciting possibilities to textile, clothing and footwear (TCF) operators. DataTraceDNA is a forensic marking system that adds tiny unique markers, or ‘tracers’, to a product at the point of manufacture. The tracers bond to the molecular structure of a product and remain invisible until you shine a DataDot supplied reader over its surface. Then DataTraceDNA shows up instantaneously.
“It’s about two to four, up to eight microns in size – you can’t see it,” Gothard explains. “It can go into the buckle, it can go into the belt on things, it can go into the arm or be coated onto any of the metal parts on a product as well. So if you’ve got a zip, when the zipper is being manufactured it can actually be coated on top of it.”
There are a number of ways this embedded technology combats counterfeiting.
“You want to be able to walk into a shop or walk into a market and go bang, that’s not ours, straight away,” Gothard explains. “For the inspectors on the road, it eradicates the area of debate and gives them more confidence to walk into a shop or walk into a market, because they can prove it straight away.”
Unlike other measures against counterfeiting such as hologram stickers, DataTrace can’t be removed from a product. It is built into a product and has been designed to withstand explosions, fire and heat up to 1000° Celcius.
“To replicate the technology, you’d have to try and reverse engineer it. They just can’t.”
Gothard adds that the garment industry has been “slow” to respond to the technology, first released approximately five years ago, but thinks that is all about to change.
“It’s about to become massive with some of the things our distributors are doing,” Gothard explains. He refers specifically to a deal signed between VerifiTT, DataTraceDNA’s distributor in New Zealand, with industrial yarn and thread producer Coats. The two companies have formed a joint venture to incorporate DataTraceDNA into sewing thread. According to DataDot’s press release, “the thread will then be used in the manufacture of garments, footwear, bags, and other items to determine the authenticity of products marked with specific brands”. Gothard hints another deal with a US-based TCF supplier is imminent.
Another company embarking on a joint venture is Checkpoint, a name perhaps more familiar to fashion brands and retailers due to its longstanding supply of security labels and tags to the retail industry. Checkpoint labelling business development manager, Steve Schenk, reveals the company has joined with an Australian business called NanoTag Technologies to offer a new product to the market: the Checkpoint NanoTag Labelling Protection System. In this system, tiny NanoTags (also known as microdots) are secured to garments either via a woven surface such as a care label or a paper surface such as a swing tag. The NanoTags are smaller than a grain of sand but contain on their surface a brand logo and an alpha-numeric security code, both unique to the company that orders the tags.
“The NanoTags are suspended in a UV sensitive adhesive,” Schenk explains. “All investigators have to do is shine a UV light over the product. The UV sensitive adhesive will react with the light and tell whoever’s conducting the investigation that NanoTags are present. Then, once you examine the NanoTags through a magnifying glass or a scope, you can see the retailer’s logo on the NanoTag, and their unique code.”
Unlike DataTrace, NanoTags can easily be removed from a garment, for example via chopping off labels or swing tags. Schenk explains there are many reasons why consumers would want to keep the tags in place.
“One of the things about eBay resale is that generally a product has a higher value to the purchaser if the seller can show all swing tickets are in tact. If that’s the norm, then if you impregnate your swing tickets with NanoTags and the seller needs to keep them on for them to be able to achieve the highest resale price, then they won’t be defeated. They’ll be left on and you can identify where the goods have originated from.”
Schenk also believes brands should be loud and proud about their use of new security technologies like NanoTags, rather than relying on their invisible presence to catch out unsuspecting thieves or copycats.
“Put it out there to the marketplace that if it doesn’t have a NanoTag, please don’t buy it,” Schenk says. “There’s some ideas floating around whereby you could have your own Gucci magnifier so at the time when you buy your $3,000, $4,000 Gucci handbag you can actually validate the purchase by identifying the NanoTags on the goods. Or ask the attendant to show you where the NanoTag is located. When it becomes the market norm, you’ll be able to say ‘This particular brand, protected by NanoTag’ and it will become the validation for the consumer that it’s a legitimate purchase.”
There are other ways the tags are designed to protect against counterfeiting too. A brand can use them to secure their supply chain, for example. Each factory in the supply chain could be asked to apply NanoTags at the point of manufacture, with each factory given a unique batch of tags. Say Louis Vuitton then discovers 200 of its bags have ended up at an unauthorised reseller, it will be able to identify which factory sold those bags on to the unauthorised outlet. In an alternative scenario, if Louis Vuitton were to order the manufacture of 1000 bags, the company can supply its manufacturer with only 1000 NanoTags. If the manufacturer were to make an extra 1000 on the side to sell illegally, the bags would not have the tags that mark them as genuine, alerting retailers and customers to their illegitimacy.
The Checkpoint NanoTag Labelling Protection System will hit the market around September and Schenk has high hopes for it.
“We’d be confident as a business to impact shrink or loss of brand by at least 50 per cent – that’s the type of impact we want NanoTag to have on the marketplace. Once adopted as a market standard, upwards of 50 per cent reduction in counterfeiting is more than likely.”
Beyond the businesses using microtagging technologies, there are others also offering invisible-to-the-eye security against counterfeiting. DNA Technologies is one such business. Based in Queensland, the company combines actual human DNA with inks or resins which are then used in apparel, for example. The technology was used to mark each and every piece of official memorabilia from the Sydney Olympic Games, allowing counterfeit inspectors to separate legitimate products from fakes. Today, 30 sporting codes across Australia and New Zealand use the technology to mark all of their merchandise, from jerseys to towels to balls to shot glasses. The idea is that any revenue generated by means of a sporting code remains in the hands of official licensees and is not lost to dodgy manufacturers. DNA Technologies managing director Ron Taylor says one of the advantages of the technology is that it doesn’t rely on the goodwill of the consumer.
“Holograms were a novelty device before they became a security device. In China, manufacturers can copy them. You show me one, I’ll give you 10,000 in a week. They look pretty, but there’s minimal security value. People like putting them on products because they think the concept of relying on the market, the consumer, to make sure the product is genuine works, but it doesn’t.”
Nearly all the companies Ragtrader canvassed for the latest information on anti-counterfeiting technologies were keen to warn TCF businesses to be careful when dealing with companies that claim to deal in microdot technologies or similar.
“The reality is there’s a lot of smoke and mirrors in this type of industry, so it’s really important that any garment manufacturer who’s launching into this scopes it out properly and understands what they’re actually asking for and that it can be delivered,” Gothard says. “The last thing you want is to have anything that goes back to a lab for analysis because that’s a delay in time.”