Indentif should help firms recover revenue and improve consumer safety, writes Derek Scally, in Berlin
Joan Collins stormed into Harvey Nichols, London's luxury goods store, recently to complain that the strap on her Louis Vuitton handbag had snapped. Although she said she bought the bag elsewhere, she demanded it be repaired immediately but without success. Embarrassed staff had to tell the star they couldn't repair her bag because it was a fake.
From Louis Vuitton handbags in London to Nike sports gear piled high on Dublin street stalls, global counterfeiting and piracy makes up 5 to 7 per cent of world trade each year. The European Union estimates that counterfeiting accounts for more than €300 billion in lost revenue for companies.
Most of the fakes originate in Asia, where authorities do little to halt the flow of bath-tub Coca-Cola and homemade CDs.
Customs officials have no problems identifying Hollywood blockbusters on DVD as fakes if the film is still running in cinemas. But not all pirated products are easy to identify and the resulting confusion costs companies money and can put customers at risk. For instance, cheap imitations of children's toys may use toxic paints or have dangerous parts.
November AG, a biotechnology firm based in Bavaria, has developed Identif, a genetics-based, fool-proof way to identify brand-name products from fakes.
"We are aiming the product at companies which place great value on their customers getting the real product and not a fake," said Dr Georg Bauer, one of the researchers at November. "Indentif will help companies recover lost revenue but it will also mean greater safety for consumers."
The company develops security tags containing a unique computer code for each individual brand. This code sequence is similar to those found in DNA, the genetic blueprint for all life forms.
A robot takes the computer code and creates the artificial DNA in a fluid by combining the components from the computer sequence such as cytosine, guanine and thymine. The artificial DNA strand created is woven together with a second strand, just as in natural DNA, to create a unique code strand. No two DNA strands are alike and, as the number of DNA combinations in nature is limitless, there is only one possibility for a match.
The researchers then embed one of the matched strands in a security tag. The other half is kept in its liquid form and soaked into a special felt pen. This pen contains the second half of the artificial DNA strand and will be sent to customs offices. A customs officer can then swipe the pen over the security label of a suspect product. The pen will only light up under a special laser light if there is a DNA match.
Indentif comes on the market in October but there is great interest already from pharmaceutical companies anxious to protect their patents and their customers.
The World Health Organisation estimates that 5 per cent of the world's medicines are fake. The fakes have passed no quality control checks and the companies are not responsible for the side effects of taking counterfeit medication.
Dr Bauer is unwilling to name any of its existing customers but he says that several major drug companies will soon use Identif tags, one visible and one covert, on all their medication packaging. He adds that Identif is cost effective enough to be incorporated into a huge range of products, from CDs and DVDs to clothing.
"It would be technically possible to incorporate Indentif into euro bank notes for example, though we have not yet discussed this with the European Central Bank," he said
The only flaw in the plan is that it assumes that, like Joan Collins, the customer was tricked into buying a fake rather than the real thing. Nevertheless, by making it easier to identify and seize high-quality fakes, Identif could soon put the squeeze on the market for $10 Rolex watches and a $20 Gucci handbags.
