The role of labels in brand protection

Mike Fairley, co-author of the new Encyclopedia of Brand Protection and Security Printing Technology, looks at the challenges and opportunities for label converters to develop anti-counterfeiting solutions

Annual global losses through counterfeiting have recently been estimated to be as high as $600 billion. A staggering sum.  A sum which includes lost revenues to brand owners, lost government taxes, lost jobs at product manufacturers, and death or injury of hundreds of people each year due to products such as fake medicines, fake and faulty electrical goods, counterfeit and dangerous car components. Indeed the list of counterfeit products today is absolutely extensive. 

In another recent study by the Organization for Economic Co-operation and Development (OECD) it was estimated that pirated products worldwide cost companies over $250 billion – a rise of more than 53 percent above the 2007 figure. 

With both the recent counterfeiting and piracy studies it has been shown that the pharmaceutical, medical and cosmetics industries have posed a particularly high risk to the public − often because of ineffective filling agents instead of genuine, more expensive medical substances; and cheap ingredients instead of high-quality cosmetics agents.

Indeed, according to the World Health Organization, counterfeit or fake medicines can have active ingredients missing or the product be adulterated with toxic substances, or with ingredients which clash with other medicines.

This can undoubtedly have significant cost implications for drug manufacturers, pharmacies, medical insurance companies, hospitals and health services. 

But it’s not just counterfeit and fake medicines that are at issue. Counterfeiters will target almost any products that have a value to them that can be sold through street markets, car boot fairs, on the internet, or in pubs and clubs. Products and goods which include, sports and other clothing, footwear, perfumes, automotive parts, toys, electrical goods, games and business software, fashion accessories, and many other items. 

What’s interesting for the label and packaging industries is that a great many of the genuine products are extensively labeled and packaged to make them attractive to buyers in the retail environment. So, apart from the counterfeit products, the counterfeiters also have to counterfeit the labels and packaging − and even the guarantees and warranty documents for some products. 

Just look at some of the ways that counterfeiters and pirates work: 

• They counterfeit the entire product and the packaging and labeling
• They counterfeit packaging and labeling only to enable reject or out-of-date products to be re-packaged and passed-off as genuine
• They re-use genuine packs and labels with counterfeit products
• They use an unauthorized look-a-like or registered brand name with a counterfeit product
• They counterfeit ownership and sale documents – including guarantees
• They even counterfeit instruments of payment, i.e. checks, credit and debit cards

The obvious question that perhaps arises from all of this is: ‘Why don’t the brand owners, packaging printers and label converters work more closely together from the very beginning to build brand protection and security features into the packs and labels at the early design stage?’ Is it a lack of understanding of what can be done, or worries about cost considerations, or simply not talking at an early enough stage? 

After all, packs and labels have to be designed, printed on a substrate, with inks, by different printing processes, finished in different ways, and packs closed or labels applied. Every one of those steps has the possibility of building-in security and brand protection features. So what can the label and packaging industries − and brand owners − do to help better authenticate products, reduce counterfeiting, enhance brand security and minimize theft or product tampering? 

Well, wherever possible, they should look to build counterfeit deterrence, product authentication and brand protection technologies into the design of the label or pack from the very beginning. They should aim to combine different (low and higher-cost) technologies to provide the most cost-effective overall solutions. If possible, they should look to make each label or pack unique. Then, once a pack or label has been developed with security and brand protection features they need to keep ahead of the counterfeiters by changing the solutions and technologies they have used on a frequent basis. 

Part of the challenge for converters is that few of them are aware of the wide range of security technologies and solutions that are available to them. Some solutions are only available under license or restricted usage; some require specialized equipment to produce; some are probably too expensive to use on consumer products. Nevertheless, there are still literally hundreds of possible options, either on their own or in combination. 

Put together, the possibilities for label and package printing companies to offer anti-counterfeiting solutions to their customers is extremely diverse and includes security designs and backgrounds, security substrates, security inks, varnishes and coatings, security printing and converting, sequential coding and numbering, Optically Variable Devices (OVDs) – primarily holograms, optically variable inks, films and coatings, and newer innovations such as bio-codes, DNA, RFID and other ‘smart’ label solutions. 

Certainly an ever-more sophisticated and ingenious range of security design features have been developed in recent years, many of which − such as Secuseal − are finding applications in brand protection, anti-counterfeiting and security labeling. This is an Agfa Graphics dedicated design and verification tool for designers, label and package printers and producers of counterfeit-sensitive  products such as pharmaceuticals, tobacco products, luxury goods, perfumes, liquors amongst others that generates complex security designs and patterns that will make counterfeits recognizable and traceable. 

Then there are security substrates which have been developed to include one or more special identification features, such as chemicals, metallic strips, taggants, security threads, colored fibers, reactive dyes or watermarks that will assist in detecting fraud and in preventing counterfeiting. 

Security inks, varnishes and coatings are perhaps a perfect medium to provide authentication and brand protection on labels and packaging because almost all packs and labels will be subjected to a printing process of some sort. Therefore, inks that will provide some kind of special security or authentication feature(s) can offer an effective solution to security problems. 

Close cooperation at an early stage between brand owners, designers, printers and a specialist security ink manufacturer can be a cost-effective pf protecting packaged and labeled goods. Many of the security inks can be printed by most printing processes, although not all printing processes are suitable for every variation of security ink. 

Many converters will also be aware of hologram (Optically Variable Devices or OVDs) solutions which have become powerful tools in the prevention of counterfeiting of packaging, labels and tags. Both overt and covert machine readable features, variable data and unique serial numbering can also be incorporated. 

Holograms offer a wide variety of different features which can be matched to different levels of security requirements, form those used in relatively low-cost applications such as labels and packaging, up to more sophisticated security methods used to protect currency. Easily identifiable holograms are primarily used for first-level identification devices and are designed to enable successful authentication at point of inspection. 

While not wishing to review every kind of security and brand protection technology, it can already be seen that discussion at an early stage between brand owners, designers, printers and security solution providers can frequently offer cost-effective solution − particularly if some basic guideline rules are adopted. 

Firstly, aim for the highest possible level of security with optimum cost. Secondly, look to combine low and high security elements to enhance protection, for example, by printing a sequential number over a hologram. Thirdly, use different types of security technologies to maximize counterfeit protection. 

At the end of the day it should remembered that labels and packs have to be designed, they have to be printed with inks, they all need to be printed on a paper, board, film or other substrate, and they mostly need to be varnished, coated and go through some kind of converting or finishing operation − all of which can include some kind of security feature.

So why not suggest security inks, substrates, designs and converted solutions to customers from the very beginning so as to enhance their brand protection in the most cost-effective way possible? 

Having said that, the real challenge is that while there are many hundreds of brand protection, security printing and authentication materials and technologies available today, few label or packaging printers generally offer more than a handful or so of the available solutions to their customers. And few really discuss all the available options with their clients from the very beginning. 

Little wonder that the counterfeiter continues to thrive.

This article was published in the 2011 L&L Yearbook