A
Active RFID – a form of RFID with its own power source (usually a battery) to power the chip and antenna so as to broadcast information with a higher energy and thus over a greater range than passive RFID. See also semi-passive RFID.
Antenna – part of an RFID tag that forms an aerial to allow the signal to be received from a scanner, to allow power to be induced into the RFID chip, and to transmit the resulting signal back to the scanner. The antenna size and format is a function of the radio frequency for which the attached RFID chip operates. In high frequency cases it is possible to have the antenna integrated on the chip and to take up very little room, but many standard RFID systems have relatively large antennae that require real estate on the product.
Anti-counterfeiting – the process or technology of preventing or identifying counterfeit products, usually by applying something to the product or its packaging, or by undertaking regular surveillance and inspection.
Arbitrage – the ability to make a (higher) profit by moving goods (or services) from one territory to another, capitalising on price differentials or market conditions. See diversion.
Authentication – the process that verifies a product’s or object’s origin, thus establishing its pedigree or validity.
Automatic Identification (Auto ID) – methods of collecting data and entering it directly into computer systems without human involvement. Barcodes, RFID, biometrics and magnetic stripes are some examples of technologies used for automatic identification. See also privacy.
B
Back-to-base – the requirement to send an item back to a central location (such as a regional head quarters, the factory, or a specialist analysis centre) so as to establish the pedigree of a product. Depending on the size and nature of the product, this can be a costly operation in terms of both manpower and freight. See also in-field.
Barcode – black and white stripes forming a symbol that can be read optically to give a serial number or batch number. Well established technology for product tracking, but easily reproduced in the case of a counterfeit. More recently, barcodes have been introduced that are two dimensional patterns or bitmaps. These are called 2D-barcodes and can contain much more information, including more sophisticated levels of encryption.
Biometrics – the measurement (or resulting data-set) of organic features used to establish the identity of a living entity (such as a person or animal). Techniques include recognizing fingerprints, retina patterns, vein patterns and DNA. See also materiametrics.
Bogus parts – term usually applied to a counterfeit spare part in the aviation or automotive industry. Not limited to fake parts, but also includes diverted parts (see diversion), untested parts, and timed-out parts.
Blanks – luxury goods, made to the specification of a recognized brand, and more often than not made by the same contract manufacturer, but shipped without a label, badge or logo. Once imported to a new country, these blanks are often retrofitted with a label showing a brand name, thus evading customs inspectors at international frontiers.
Brand – the identity of a consumer product, service or provider of such products and services. In reality the brand can be the physical representation (logo, packaging, design, etc) as well as the less tangible (reputation, ethos, marketing approach). As such a brand can be a valuable asset to the brand owner.
Brand owner – the company that owns the rights or designs to a particular product that is sold as a specific brand. Brand owners may use subcontractors, licensed distributors, and licensed vendors to manufacture and sell their brands. This sometimes complex supply chain opens up opportunities for counterfeit products and diverted goods.
Brand dilution – where a brand’s strength is reduced possibly because of brand extension, but also because of over other issues such as loss of reputation due to one poor product line, loss of exclusivity due to over supply or loss of a clear message due to poor advertising or inconsistent marketing.
Brand extension – the act of using the strength of a brand to market and sell a generally unrelated product or service, leveraging on the brand name to gain traction. An example would be when a car manufacturer puts its name to a range of pens, cufflinks, or aftershave.
Brand guardian – see brand owner.
Brand security system – a system that allows a company to protect its brand by preventing counterfeiting and product diversion, for example.
Brand stretching – see brand extension.
C
Cabbage – a term used to describe a kind of product overrun made from the left-overs of genuine licensed products. For example, handbags can be made using the left-over high quality leather of a branded good. Because the quality is high, the ability to differentiate a cabbage from a real product can be very difficult if not impossible.
Campaign – in the context of fighting counterfeit products, a campaign is a coordinated approach combining the introduction of new technology to protect products, the use of field intelligence to gather information, the dissemination of information to educate the supply chain and consumers, as well as enforcement action to catch and punish the perpetrators. Campaigns can occur at the brand level, company level, sector level through industry groups, or indeed the national level through coordinated efforts involving government organizations.
Canal Street – the once notorious street in New York City, running ironically between Little Italy and Chinatown in downtown Manhattan. The street was an open-air market for fake products, grey imports and product overruns, especially for designer goods and fashion apparel.
Class A fake – a term that is given to a very high-quality fake product; usually having been made with the same materials, using the same processes and by the same contract manufacturer as the genuine product. See ghost shift.
Colour shifting – an optical property that changes colour, usually in the form of a flat label that when tilted, provides the observer with a different colour. The premise is that these features are difficult to reproduce, and if the inspector or consumer is educated in what to expect, then a genuine product can be authenticated. See also hologram, and overt.
Copyright - the exclusive and assignable legal right, given to the inventor for a fixed number of years, to copy an original creation in any form.
Counterfeit – fake version (copy) of a product. Not limited to high-end brands, and not just inexpensive and harmless reproductions. Can include dangerous, substandard, ineffectual, and even poisonous products.
Counterfeit medicines, definition according to the World Health Organization: “A counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging."
Covert – A hidden or obscured feature or operation. A covert identifier may include an invisible marking such as a watermark, a magnetic feature or an encrypted feature that an uninitiated observer would not detect. Covert systems allow inspectors and brand owners to authenticate the pedigree of an item without third parties tampering or removing the marking. See also sting.
Cradle-to-grave – the entire life of a product from the point in time it is produced to the point in time it is disposed of (or destroyed). The ability to track and trace the product in this manner ensures safety and security, and provides visibility of products to the brand owner. It also assists with warranty returns and helps avoid counterfeiting, diversion and timed-out parts.
D
Diversion – The process whereby a distributor diverts products to another destination, usually to make more money. This leads to grey market goods that command a higher profit for the distributor and vendor. Sometimes this arbitrage is legal, but disliked by the brand owners because it erodes their ability to control prices in different markets. To control this, brand owners often have license agreements with distributors and vendors, but need to be able to track and authenticate goods within their supply chain to ensure the agreements are being honored. In some cases diverted products are illegal, particularly where versions have not been certified safe by the authorities where the products are diverted to. Examples would include food and medicines that have not been manufactured or tested to the standards required by some territories.
Due diligence – the gathering of intelligence and data to ensure that a product, a service or an agreement is being produced, represented or performed as expected. To avoid counterfeit products, consumers might undertake due diligence on their vendor by establishing their history or reputation, comparing for example an established supermarket chain to a garage / car-boot sale vendor.
E
F
Fake – see Counterfeit.
Faux designer – a street term for a fake designer product, such as a premium fashion accessory or item of clothing.
Fingerprints –unique physical marks that can identify people (in the usual case) or products (by analogy) and that are prohibitively difficult to replicate.
Forensic analysis – the process by which an item is investigated and analysed using a methodological and scientific process. Typically associated with criminal investigations, but equally applicable to back-to-base analysis of products or items to establish their pedigree, perhaps as a result of a safety concern, a product failure or a customer complaint.
G
Geofencing – tracking the location of a person, vehicle or item with respect to a zone such as a mobile phone network’s cell. In the context of a supply chain, it is a means to identify and reduce grey market diversion, as items that are supposed to confined to one region can be identified when they appear elsewhere.
Ghost shift – the time when product overruns are manufactured without the knowledge or authority of the brand owner. The process typically occurs out-of-hours, such as during the night shift, and makes use of the same processes, raw materials, and skilled operators that make the genuine products at other times.
Grey import – where a product is subject to diversion and enters a market through an unauthorised distribution channel. As such the Grey Import (or grey product) is in a jurisdiction or territory against the wishes (or possibly the legal rights) of the brand owner.
Grey market – the sale of products in a territory where they were not authorized for sale, usually as a result of a distributor changing the final destination of the goods. Grey markets thrive where there is price differentiation (see arbitrage). Diverted goods may not be warranted (or safety tested) for the location they end up in.
H
Heuristics – the use of experience and knowledge to solve a problem. In the world of counterfeit products, this is the approach that often has to be adopted to identify fakes and those responsible for them. This comes about because so many anti-counterfeiting technologies (such as holograms) are routinely copied.
Hologram – flat optical image which looks three-dimensional when viewed with the naked eye. The image, often with complex colours and visual effects, is generated using a laser and so was relatively high tech, costly, and difficult to reproduce when first launched. As a result, holograms have been increasingly used to deter counterfeiting of currency, credit cards, and other products. However, the ability to reproduce passable holograms is now universally accepted, thus providing a very low barrier to counterfeiters.
Host system – a computer on a network, which provides services to users or other computers on that network. Increasingly sophisticated authentication systems rely on the host to provide a central database of product or security information. The most common example is the credit payment card system that hosts the banking information for the credit card issuers.
I
In-field – The ability to perform a task, such as authentication, out in the real world. Thus the pedigree of an item can be verified in the supply chain or at a vendor’s outlet without having to return an item back-to-base.
Intellectual Property (IP) – an invention or creation that has commercial value, including copyrighted property, patents, business methods, and industrial processes. These are usually valued highly by brand owners, as they differentiate their products from their competitors.
International exhaustion – the cessation of rights as described in National Exhaustion, but applying across countries, meaning that after purchase, the owner can export and re-import within the countries where the exhaustion applies without infringing intellectual property rights. The European Union, being a single market, could give rise to this situation. See also parallel trade.
J
K
Knock-off - An identical copy of a product, sometimes a crude imitation and sometimes a sophisticated reproduction. See counterfeit.
L
Label – a sticker that is added to a product to indicate manufacturing or batch information, source or operating instructions, expiry date, etc. Some labels come with tamperproof technology or anti-counterfeiting technology and may contain visual markers (such as holograms) or machine readable markings (such as barcodes) for automatic identification. Also, the brand associated with designer goods, such as fashion items or apparel. The term comes about because traditionally a physical (fabric) label would be stitched on to the item sporting the brand name or logo.
Logisitics – the process by which products move through the supply chain, ideally efficiently, on time and to the correct destination. track and trace technology can assist with successful logistics.
M
Magnetic stripe (Magstripe) – a band of magnetic material that can hold a small amount of written information, such as that commonly found on the reverse of a credit card. Used for automatic Identification of the bank-card and bank owner. Conventional magnetic stripes can be erased in a strong magnetic field rendering them unusable, can be rewritten with fraudulent information, or can be copied to another magnetic stripe (see skimming).
Matermetrics / Materiametrics – the application of statistical analysis to data relating to inanimate items and objects, particularly in terms of identification and their surface or near-to-surface features. Analogous to biometrics.
Meditag - used in Malaysia, is a secure holographic self-adhesive label that can be attached to pharmaceutical product packaging to authenticate it as registered with the Ministry of Health Malaysia. It serves as a seal that the public will recognise and trust as evidence of registration of pharmaceutical products.
N
Nanotechnology - A field of science where the goal is to control individual atoms and molecules to create useful devices and materials, often with properties or features not present in the bulk (larger size-scale) material. One nanometer equals one thousandth of a micrometer or one millionth of a millimeter, and nanotechnology is usually used for technology on the 0.1 to 100 nm scale. Some embodiments of Singular ID’s technology make use of nanotechnology.
National exhaustion – a legal term referring to the termination of any rights of an owner of intellectual property over a protected product once the protected product has been purchased within that country. Therefore, where national exhaustion applies, this means that a purchaser of a product can resell, lease, etc. the product as and when he wishes within the country. See also international exhaustion.
O
Optical – an item or technique that makes use of light, such as a hologram. Thus authentication relies on the human eye or a machine capable of detecting and recognizing the optical properties. Other examples of optical systems make use of colour shifting systems and invisible optical properties such as infrared and ultraviolet properties.
Overruns – product made to the same specification, often using the same materials and processes as a legitimate branded product, but without the brand owner’s knowledge or authority. Usually made during an extra shift (see ghost shift).
Outsource – the delegation of an activity to a subcontractor, often to cut costs or make use of domain experience in manufacturing, processing, logistics or vending.
Overt – a visible feature that in this context is used to authenticate a product. Overt features include serial numbers, barcodes, holograms, and conventional RFID. See also covert.
P
Parallel trade – the importation or re-importation of products to a market after they have first been in circulation in a market, against the wishes of the brand owner. This is not necessarily illegal (for example it is legal within the European Union), but is not always in the best interests of the brand owner (trying to control price and availability in a particular country) nor necessarily in the interests of the buying public (obtaining items designed for a different market, e.g. language, power supply options and other specifications may be unsuitable).
Passive RFID – a format of RFID that has no built-in power supply. The energy required to transmit a signal from the RFID chip is derived from inducted energy from the scanner unit. Generally passive RFID broadcast over a shorter range than active RFID.
Pass-off – derived from the legal term of ‘passing-off’ in which a trademark is used by one company to result in a product that is similar to that of another, such that the consumer is fooled. Therefore, a pass off may have a similar name, a similar packaging format or a similar model number, for example, to an established brand owner’s product. As such, a customer can be fooled in to believing they are buying a reputable branded product. The situation can become complicated when a trademark is not registered in a particular territory. As such, pass-offs may or may not be illegal, depending on the local laws as well as the degree of similarity between the imitation and original.
Pedigree – the origin and history of a product.
Point of sale – the time and location at which a consumer product leaves the traditional supply chain and is sold to a customer. Credit cards and integrated banking systems have enabled electronic point of sale (EPOS) cash payment systems to proliferate, providing an opportunity to monitor sales transactions much more easily.
Price differentiation – differences in the retail price of goods in different territories, usually based on the wealth of a nation and the price a product can command. However, legitimate goods may require certain tests and safety standards to be met in certain territories, and illegitimately diverted goods may not meet these prerequisites.
Privacy – the issue, particularly with sophisticated automatic identification systems and large integrated host systems in which the privacy of an individual may be compromised. For example, RFID can be read remotely and have information stored within it. In some countries, particularly in the European Union and United States of America, the legal system has very strict regulations about privacy.
Piracy – the unauthorized duplication of goods protected by intellectual property law.
Q
Quantum dot – a very small crystal of a size on the order of just a few nanometers and containing only a few tens of atoms. Generally being difficult materials to produce they can be used to provide markers to authenticate items.
R
Reader – see scanner, sometimes refers specifically to the dedicated sensor elements within a scanner.
Real estate – in this context it refers to the space that is taken up on a product or package. For example, a label, barcode, hologram, and RFID tag all require physical space and physical surface area. This can be limited on certain items, or impact on the visual quality of a product or its packaging.
Re-importation – another term for parallel trade, used widely in the United States of America.
Repackaging – replacing the packaging of products to reflect local language requirements, local labeling legislation or to meet other market requirements (such as lot size or expectations in presentation). This can lead to opportunities for counterfeit products to enter a market, as genuine packaging can be used inappropriately; a particular problem in the pharmaceutical industry.
RFID – Radio Frequency Identification. A technology that broadcasts a serial number and possibly other information to a reader. There are a variety of specifications and formats, including passive RFID and active RFID, used to help with authentication and the supply chain. However, there remain privacy and cost concerns for some applications.
S
Scanner – a device (sometimes handheld) used for automatic identification of objects or products containing machine readable information or features such as barcodes, magnetic stripes, and an RFID chips. Scanners of different technologies often have limitations on the format or range in which they can operate. For example, barcode scanners need to be in line of sight, magnetic scanners usually need to make contact with the surface containing the information, and RFID scanner can read from a varying distance depending on the surrounding environment and specification of the system. The scanner can also influence issues of privacy.
Secondary market – although this term has several meanings depending on the industry being discussed, in this context it refers to when goods are resold (e.g. to collectors) or to others when the original owner has tired of the products (secondhand market). In such market places it is common for genuine (but used) goods to be mixed with counterfeit (new and used) goods.
Semi-passive RFID – a format of RFID that is very similar to passive RFID except for the addition of a small battery. This battery allows the tag integrated circuit to be constantly powered, which removes the need for the antenna to be designed to collect power from the scanner during interrogation. The antenna can therefore be optimized for the transmitted signal that it responds to the scanner with. See also active RFID.
Serial number – a unique product number, identifying the item individually and usually related to manufacturing data. The serial number may be printed, stamped or inscribed on the article. Although a unique number improves product traceability, unless it is rigorously verified, it is not a large barrier to counterfeiting, as it can be easily reproduced and assigned in high volumes to fake products.
Skimming – the reading and reproduction of a magnetic stripe, particularly on a credit card, so as to create a clone that can then be fraudulently used. Cards can be skimmed using modified credit-card readers and combining the magnetic information with the information obtained from the paper imprint of a credit card routinely used and retained at vendors’ outlets.
Sting – an undercover operation to identify the cause of counterfeit products or product diversion. It also applies to the covert technology that is added to packaging to provide the evidence. For example, it is possible to supply a distributor with packaging that contains a covert identifier. If this packaging later turns up in the wrong territory, the sole distributor can be investigated.
Supply chain – the path through which raw materials and eventually finished goods travel from the source through the manufacturing process (see outsourcing), through the distribution network to the territories and finally the shops or outlets from which they are sold to the customer. Supply chains are becoming increasingly complex and convoluted, particularly as parts are sourced globally, freight is consolidated, trans-shipments are common, and territories have their own rules and regulations about the import, export and taxation of products. This creates a major problem for the brand owner to effectively track and trace products, especially to avoid diversion. It also presents ample opportunity for counterfeit goods to enter the supply chain undetected.
T
Tag – similar to a label, but often specifically referring to a microchip or RFID that is attached to a product as means of authentication.
Tamperproof – a technology that prevents a package or label from being tampered with. For example, labels that are removed may leave a residue or message and packages that are opened and resealed may be visually recognizable. Tamperproofing is an important part of a brand security system, as it helps ensure product integrity and to indicate if products have been interfered with through the supply chain.
Timed-out – expired or out-dated product, particularly referring to automotive, engineering and aviation spare parts. In such instances, timed-out parts are replaced to ensure safety and reliability. A poorly managed process can result in timed-out parts being resold and reused, sometimes by passing the timed-out component off as an unused original part. This problem is related to product diversion and anti-counterfeiting, but the cycle begins from what should be the end of a supply chain.
Trademark – A word, name, phrase, logo, symbol, colour, sound or smell used by a brand owner to identify a product and distinguish it from those created or sold by competitors. To provide extra protection, trademarks can be registered in territories. See also blanks.
Track and trace - The process of retrieving information about the movement and location of goods though the supply chain and increasingly to the end of the product’s life (see cradle-to-grave). Various technologies can be used, for example RFID chips can be read and updated as they pass through the supply chain. An integrated host system can provide real-time track and trace information from a central location.
U V
W X Y Z
Watermark – Traditionally a distinctive design created in paper (such as paper currency) during manufacturing, which becomes visible when it is held up to the light. More sophisticated watermarks may be entirely covert and be used for a sting. Watermarks are usually the same marking or feature across many products, rather than being individual and serialized, thus providing protection for a batch rather than an individual.