W140 N9504 Fountain Blvd.
Menomonee Falls, WI  53051

Local: 262.255.6150
Toll Free: 800.444.5144
ATL Home
ATL

Donfucius Says: October 31st, 2014. Random Bits Of Wisdom.

  1. “As a child my family’s menu consisted of two choices: take it or leave it!” — Buddy Hackett
  2. “Nature gave men two ends – one to sit on and one to think with. Ever since then man’s success or failure has been dependent on the one he used most.”Donfucius
  3. Preach the Gospel at all times, and when necessary use words.” — Aaron Rogers Quoting Francis of Assisi
  4. “Diplomacy is the art of saying “Nice doggie” until you find a rock.” — Will Rogers
  5. “Before they invented drawing boards, what did they go back to?” –Patti Molloy
  6. “The way we’re going… if I called up another pitcher, he’d just hang up the phone on me.” — Any Brewers Manager
  7. “When someone is impatient and says I haven’t got all day,” I always wonder, “How can that be? How can you not have all day?” — George Carlin
  8. “We’re fools whether we dance or not, so we might as well dance.” — Old & Wise Japanese Proverb
  9. “Blessed are the cracked – for they are the ones who let in the light.” — Donfucius
  10. “Good judgment comes from experience, and a lot of that comes from bad judgment.” — Will Rogers
  11. “I don’t mind how much my Ministers talk, so long as they do what I say.” — Margaret Thatcher

ATL
RSS

ATL's Quality Corner

Posts Tagged ‘counterfeiters’



Economic Indicator: Even Cheaper Knockoffs.

August 13th, 2010

by Stephanie Clifford – Courtesy of “The New York Times”.

01-1KNOCKOFF1-articleLarge

Photo Above: On Broadway in New York, shoppers can pick up items of questionable authenticity, and not just of the top luxury brands.

After years of knocking off luxury products like $2,800 Louis Vuitton handbags, criminals are discovering there is money to be made in faking the more ordinary – like $295 Kooba bags and $140 Ugg boots. In California, the authorities recently seized a shipment of counterfeit Angel Soft toilet paper.

The shift in the counterfeiting industry, which costs American businesses an estimated $200 billion a year, plays to recession-weary customers looking for downmarket deals, the authorities say. And it has been fueled in part by factories sitting idle in China. Almost 80 percent of the seized counterfeit goods in the United States last year were produced in China, where the downturn in legitimate exports during the recession left many factories looking for goods – in some cases, any goods – to produce. “If there is demand, there will be supply,” said John Spink, associate director of the Anti-Counterfeiting and Product Protection Program at Michigan State University. In China, he said, “It’s all of a sudden them saying, ‘We have low capacity. What can we make?’ ”

The answer is increasingly knockoffs of lesser-known brands, which are easy to sell on the Internet, can be priced higher than obvious fakes, and avoid the aggressive programs by the big luxury brands to protect their labels, retail companies and customs enforcement officials say. The results: Faux Samantha Thavasa bags for $113 and Ed Hardy hoodie sweatshirts for $82.50. And, bizarrely, imitations that are more expensive than the real ones: In 2007, Anya Hindmarch sold canvas totes that said “I’m Not a Plastic Bag” for $15. Now fakes are available on the Web for $99. “If it’s making money over here in the U.S., it’s going to be reverse-engineered or made overseas,” said Jonathan Erece, a trade enforcement coordinator for United States Customs and Border Protection in Long Beach, Calif. “It’s like a cat-and-mouse game.”

The traders in mid-price fakes are employing another new trick: by pricing the counterfeits close to retail prices – which they can do when the original product is not too expensive – they entice unsuspecting buyers. Any savvy shopper, for example, knows a Louis Vuitton bag selling for $100 cannot be the real thing. But when NeimanMarcus.com, an authorized retailer for Kooba bags, sells them for $295, and a small Web site sells them for $190, a deal-hunting consumer could think she has scored a bargain. (She hasn’t. The $190 bag is a fake.) “If the price points are somewhat close, some consumers get duped into believing they’re getting a real product,” said Robert Barchiesi, president of the International AntiCounterfeiting Coalition, a trade group. “They might be looking for a bargain, but a bargain to buy real goods.”

Photo Below: At the Port of Long Beach, an officer at the Customs and Border Protection office inspects a toy for entry into the country.

01K-3NOCKOFF3-popup

The counterfeiters are also lifting photos and text from legitimate Web sites, further fooling some shoppers. “The consumer is blind as to the source of the product,” said Leah Evert-Burks, director of brand protection for Ugg Australia’s parent company, the Deckers Outdoor Corporation. “Counterfeit Web sites go up pretty easily, and counterfeiters will copy our stock photos, the text of our Web site, so it will look and feel like” the company site, she said.

While all of it is illegal, the authorities do not publish statistics on what brands’ products are being counterfeited. But designers and trade experts said the downmarket trend in counterfeiting became more noticeable over the last year, as counterfeiters got more inventive. The field is big: the total value of counterfeit goods seized by United States customs officials increased by more than 25 percent each year from 2005 to 2008, using the government’s fiscal calendar. In fiscal 2009, as imports over all dropped by 25 percent, the value of counterfeit products seized dropped by only 4 percent to $260.7 million. The official statistics capture only a piece of the problem, companies and experts say, because so many counterfeiters market directly to customers on the Internet and many of those sales go undetected by the authorities. “Online is much harder” to patrol and enforce, said Todd Kahn, general counsel for Coach, the handbag and accessories company. That is particularly true for smaller brands, as Anna Corinna Sellinger, co-founder and creative director of the New York clothing and accessories company Foley & Corinna, learned.

A couple of years ago, she began checking out which Foley & Corinna items were selling on eBay. Her city tote, which now retails for $485, was a popular item, but on some listings “there was something off – it’s a color I never did, or a leather I never did,” she said. As other sites proliferated, and Ms. Corinna Sellinger noticed more and more Internet fakes, she stopped looking altogether. “It’s just too frustrating,” she said. “You can try to do something, but it’s so big and so fast.”

While Ms. Corinna Sellinger basically had herself and a computer to patrol for fakes, big companies use legal teams who train customs officials on the nuances of their product, monitor the Web, ask Internet service providers to take down copycat sites and file lawsuits against sellers. (The brands only go after sellers; the law in the United States does not prohibit consumers from buying counterfeit products.) Ugg Australia, the popular boot brand, developed a full enforcement program after it realized how prevalent copies of its boots were. In 2009, 60,000 pairs of boots were confiscated by customs agents globally, Ms. Evert-Burks said. In the same year, the company took down 2,500 Web sites selling fake products, along with 20,000 eBay listings and 150,000 listings on other trading sites like Craigslist and iOffer. That’s despite the relatively low price of real Ugg boots, which cost around $140 for a basic model. Under similar programs, Versace won $20 million in a recent lawsuit against counterfeiters, while Gucci, Louis Vuitton and other luxury brands have been pursuing similar cases. Coach last year announced “Operation Turnlock,” in which it would file civil lawsuits against counterfeiters, and it has sued 230 times, Mr. Kahn said. At Liz Claiborne Inc., which owns brands like Juicy Couture and Kate Spade, the company has gone after 52 Web sites selling counterfeits, and removed 27,000 auction listings so far this year.

Photo Below: Counterfeit boots are destroyed in Australia after a court sided with Deckers Outdoor, owners of the Ugg boot line.

01-2KNOCKOFF2-popup

The lesson for many counterfeiters has been that they have a better chance of getting away with it if they copy smaller brands like Foley & Corinna – even though Foley & Corinna, while popular with celebrities and fashion types, is not widely recognized as a status brand and its bags can be had for as little as $126 on the brand’s own Web site. “Once it’s out there a lot, people won’t even want the real one because then they’re like, ‘People are going to think it’s fake,’ ” Ms. Corinna Sellinger said. “It takes the product away from the designer.”

New York City Crackdown On Counterfeiters.

April 26th, 2010

Michael_R_Bloomberg

Photo above: Michael R. Bloomberg

Mayor Michael R. Bloomberg, Chief Advisor to the Mayor for Policy and Strategic Planning John Feinblatt and Director of Special Enforcement Shari C. Hyman today announced a $800,000 payment to the City that settles the “Counterfeit Triangle” case and reopens a key block of Manhattan’s Chinatown.

The City will receive the payment from the owners of a single triangular block that was notorious for the sale of counterfeit goods. The lawsuit, a civil nuisance abatement action, was filed after a February 26, 2008 raid that shuttered 32 storefronts selling counterfeit goods. Under the terms of the settlement, the property owners must use the building, bounded by Canal, Centre, and Walker Streets, for legitimate purposes.

“Property owners should know that they are responsible for what goes on in their buildings and that hosting illegal activity like counterfeiting is a losing proposition,” said Mayor Bloomberg. “Counterfeiting deprives legitimate businesses of customers and their employees of their paychecks. We will continue to go after the street-level counterfeiters, the wholesalers, and the property owners that look the other way.”

In the raids that triggered the lawsuit, the Mayor’s Office of Special Enforcement seized counterfeit trademarked products, including counterfeit watches, jewelry and handbags purporting to be from Rolex, Tiffany, Coach, Gucci, Chanel and others. These products had an estimated street value of over $1 million.

“Selling counterfeit goods is a form of organized crime it is built on forced sweatshop labor, often done by children and frequently accompanied by violent turf wars,” said John Feinblatt, Chief Advisor to the Mayor for Policy and Strategic Planning. “Counterfeiting has been involved in every illegal enterprise from money laundering to supporting terrorism. This remains an ongoing problem, but we will continue to go after any property owners that look the other way while their tenants flout the law.”

“Counterfeit goods are inferior products that cheat everyone, from the consumer who purchases a poorly-made item, to the legitimate business owners cheated of sales, to the City who loses tax revenue,” said Shari C. Hyman, Director of the Mayor’s Office of Special Enforcement. “Property owners should know that if they play host to illegal vendors, we will use the Nuisance Abatement law to shut down the buildings and exact a serious financial penalty.”

As part of the Mayor’s Office of Special Enforcement investigation, 42 undercover purchases were made in a series of the buildings’ 32 storefronts. The investigation uncovered counterfeits of Coach, Gucci, Dolce & Gabbanna, Dior, Prada, Rolex, Fendi, Burberry, Calvin Klein, Dora the Explorer and Oakley. The building addresses in the Counterfeit Triangle are 224 – 230 Canal Street; 232 Canal Street; 234 – 238 Canal Street; 106 Baxter Street; 112 – 116 Walker Street; 118 Walker Street; 120-124 Walker Street; and 152-156 Centre Street.

fake 002

Photo above: examples of fake goods.

Mayor Bloomberg created the Office of Special Enforcement by Executive Order in December, 2006. It replaced the former Office of Midtown Enforcement and expanded its activities to all five boroughs. The Office of Special Enforcement is responsible for coordinating enforcement efforts across City agencies to address quality of life issues related to notorious adult use locations, lawless clubs, trademark counterfeiting bazaars and illegal conversions of apartment buildings into hotels.

The Office of Special Enforcement and its predecessor has, since 2003, shut down 36 counterfeiting locations, seized some $52 million in knock-off goods and forced building owners and counterfeiters to pay $3 million in fines to the people of New York City.

Mixing It Up.

March 21st, 2010

Mixing and rotating overt, covert, and forensic technologies can thwart counterfeiters.

By Donald J. Dobert
President and Chief Operating Officer
ATL Security Label Systems

It has been said dozens of times already, there is no silver bullet against counterfeiters and diverters. You’ve got to layer, layer, and layer some more. In the photograph below we have illustrated the different “layers” of a 3D hologram. These invisible layers give the security label three color kinetic movement.

These “layers”, which are not immediately known to the counterfeiters, can be mixed and rotated to protect original products and documents. In the example below a German ID card has hologram layers that reveal a pattern when the card is moved back and forth.

In the photo below, courtesy of Graphic Security Systems Corporation, Lake Worth, FL, you can easily see how (during manufacturing) each “layer” is structured with different anti-counterfeiting properties.

Just what exactly does layering mean? What layer comes first, what layers need constant updates, and what layers stay put? Who decides when and when to layer, when to update the layers, and when do you need to inform FDA?
A “mix and rotate” approach brings multiple technologies together in one package. To “mix and rotate” can be compared to software updates. As computer hackers invent new “bugs,” software companies develop new “anti bugs.” Every time you as a brand owner produce your product, you can “mix and rotate” the following security features:

Tamper-evident breakaway closures.
Invisible, hidden markers.
Anticounterfeiting holograms.
Color-shifting inks.
Tamper-evident unit closure.
Mass-serialization.
Two-dimensional bar codes.
RFID chips.
Void security closures or destructible tapes.

Here is an example. Tamper-evident substrates can employ destructible, paper-based face stock or nonreproducible covert security fibers. Distribution can be limited to approved secure suppliers for a secure chain of custody. Tamper-evident substrates can make label removal impossible without visible damage. Such features effectively deter remarking and help ensure product authenticity. They also provide simple in-field authentication.
In addition, color-shifting inks and other covert features can be public signals of authenticity. Invisible forensic markers alone can be used to detect whether a product has been repackaged or relabeled. Such forensic markers may be used in the varnish on the package as well as customized or serialized codes and holograms.
Combining these technologies, the hologram would be an overt feature, the forensic marker would be a covert one, and the code could be either overt or covert, depending on what you are doing with it. Special codes can be purchased or created that pertain to only one product, which tells the manufacturer where it was made, how it was distributed and on what days. While there are codes that are very obvious and basically list manufacture date and product code, there is a wide range of options in customized codes.
A Ubiquitous Example
Modern U.S. currency has changed many times over the past few years. With the exception of the one-dollar bill, all of these notes are obsolete (see photo below). This is because the U.S. government “mixes and rotates” (M&R) its overt and covert techniques to stay one step ahead of the counterfeiters.

Shown below are examples of anti-counterfeiting “layered levels” of the “ever-changing” “face” of U.S. notes. You will notice the different colors when compared to the notes that are now obsolete:


Overt and covert M&R anticounterfeiting measures include fine detail with raised intaglio printing on bills. This allows nonexperts to easily spot forgeries. As a side note, on coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, this does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold.
For paper bills, in the late twentieth century, advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. To combat this, national engraving bureaus began to include new (more sophisticated) anticounterfeiting systems such as holograms, multicolored bills, and embedded devices such as strips, microprinting, and inks whose colors change depending on the angle of the light. New technology also includes the use of design features such as the “Eurion Constellation,” which disables modern photocopiers.

Detecting counterfeit bills often isn’t easy to do by eye. One bogus $100 bill believed to have been made in North Korea, for instance, would be nearly impossible for a novice to identify as a fake. It has the security strip on the left side of the bill and a watermark of Ben Franklin (whose portrait is on the bill) on the right-hand side, as well as replicating other security features. However, its paper contains no starch and doesn’t reflect ultraviolet light, which is one sign of a counterfeit.Photo Below. The portrait on a genuine $50 bill (left) compared to a counterfeit. Notice the relative flatness and lack of detail on the fake bill.

Photo Below: The portrait on a genuine $50 bill (left) compared to a counterfeit. Notice the relative flatness and lack of detail on the fake bill.

Photo Below. $50 bill with three security features highlighted. A section of the security thread is visible in the circle near the portrait. The large circle to the right shows the watermark, and below that the color-shifting ink is circled.

There is now a scanner that searches for missing covert features in bogus “Super Dollars.” The device looks at several aspects of the bill to confirm its legitimacy. U.S. paper money is printed with magnetic ink, but that’s also used for many fraudulent bills. On real bills, the ink is distributed in a consistent pattern whose magnetic resonance can be mapped. The magnetic map is stored in the scanner, as well as three other maps containing ultraviolet, infrared, and other measurements taken from legitimate bills. Scanning a bill takes less than one second. If there’s any spike or anomaly in any of the threads of data, the scanner rejects the dollar.

Photo Below. Beginning with Series 2004, $10, $20, and $50 bills received a redesign with several changes to their overall look, notably the addition of more colors (see the picture of the $50 bill above). Probably the most important new security feature is the addition of EURion Constellations, a distinct arrangement of symbols (in this case, numbers) which triggers many color photocopiers to refuse to copy the bill.

SUPER LABELS=SUPER DOLLARS

What I have just described is a “layered” approach in anticounterfeiting. You may not be the government fighting “super dollars,” but then again, you are fighting to protect your brand from counterfeiters. The money a brand owner saves in brand protection and litigation should be considered as “super dollars” to the brand owner. In the process (of saving money), the brand owner will be protecting the public, and he can advertise as such.

PUTTING IT INTO PRACTICE
Here’s how forensic authentication works in a M&R layered approach:
A unique digital code, “ATL 12-IDGJ”, is set-up for a brand.
A digital code is incorporated into the label through multiple-entry points (inks, varnishes, adhesives).
The digital code is also incorporated into (or linked to) the pedigree documentation.
A scanner will indicate that “ATL 12-IDGJ” is the established digital code, allowing traceability.

Such uniqueness cannot be duplicated because the invisible, nondegradable forensic digital code is virtually impossible for the counterfeiters to duplicate. It only takes a second to authenticate a product anywhere in the world.


Today, FDA does not need to know what type of anticounterfeiting measures you are taking. In fact, to protect themselves, brand owners should limit such details to a certain number of trained individuals who are monitoring what features are being used and for how long.
Most important in the anticounterfeiting arsenal is the brand owner’s mindset. Nothing changes until this does. Counterfeiters have the mindset that they can break the laws, provide fake or diluted products, and they do not care if they place the public in harms way. We (you and I) have to assume the mindset that says to the counterfeit, “No, you can’t copy my products.”

Thank you for your time. Donald J. Dobert, President, ATL.

You Bet Your Life – Part I. Fake Pharmaceuticals.

February 4th, 2010

FDA Warns Consumers about Counterfeit Drugs from Multiple Internet Sellers

If you purchase medications from sources that you do not know, and the product you take is purchased on the sole basis of “price”, then I believe you are playing a dangerous game of “you bet your life”.

The Food and Drug Administration (FDA) is cautioning U.S. consumers about dangers associated with buying prescription drugs over the Internet. This alert is being issued based on information the agency received showing that 24 apparently related Web sites may be involved in the distribution of counterfeit prescription drugs.
On three occasions during recent months, FDA received information that counterfeit versions of Xenical 120 mg capsules, a drug manufactured by Hoffmann-La Roche Inc. (Roche), were obtained by three consumers from two different Web sites. Xenical is an FDA-approved drug used to help obese individuals who meet certain weight and height requirements lose weight and maintain weight loss.

Above photos: Counterfeit Xenical, complete with instruction sheet, blister pack with exp. date, and lot serial numbers. What’s missing? ATL’s security labeling/ packaging: This is an invisible (non-degradable) digital forensic code that cannot be duplicated by the counterfeiters.

Photos below: If your prescription medications are not authenticated as genuine, how do you know that (your prescription medications) were not produced (by counterfeiters) on equipment such as this?

None of the capsules ordered off the Web sites contained orlistat, the active ingredient in authentic Xenical. In fact, laboratory analysis conducted by Roche and submitted to the FDA confirmed that one capsule contained sibutramine, which is the active ingredient in Meridia, an FDA-approved prescription drug manufactured by Abbott Laboratories.
While this product is also used to help people lose weight and maintain that loss, it should not be used in certain patient populations and therefore is not a substitute for other weight loss products. In addition the drug interactions profile is different between Xenical and sibutramine, as is the dosing frequency; sibutramine is administered once daily while Xenical is dosed three times a day.

Other samples of drug product obtained from two of the Internet orders were composed of only talc and starch. According to Roche, these two samples displayed a valid Roche lot number of B2306.
Roche identified the two Web sites involved in this incident as brandpills.com and pillspharm.com. Further investigation by FDA disclosed that these Web sites are two of 24 Web sites that appear on the pharmacycall365.com home page under the “Our Websites” heading. Four of these Web sites previously have been identified by FDA’s Office of Criminal Investigations as being associated with the distribution of counterfeit Tamiflu and counterfeit Cialis.

At this point, it appears that these Web sites are operated from outside of the United States. Consumers should be wary, if there is no way to contact the Web site pharmacy by phone, if prices are dramatically lower than the competition, or if no prescription from your doctor is required. As a result, FDA strongly cautions consumers about purchasing drugs from any of these Web sites which may be involved in the distribution of counterfeit drugs and reiterates previous public warnings about buying prescription drugs online. Consumers are urged to review the FDA Web page at www.fda.gov/buyonline/ for additional information prior to making purchases of prescription drugs over the Internet.
The 24 Web sites appear on pharmacycall365.com.
AllPills.net
Pharmacy-4U.net
DirectMedsMall.com
Brandpills.comEmediline.com
RX-ed.com
RXePharm.com
Pharmacea.org
PillsPharm.com
MensHealthDrugs.net
BigXplus.net
MediClub.md
InterTab.de
Pillenpharm.com
Bigger-X.com
PillsLand.com
EZMEDZ.com
UnitedMedicals.com
Best-Medz.com
USAPillsrx.net
USAMedz.com
BluePills-Rx.com
Genericpharmacy.us
I-Kusuri.jp

If you are a brand owner, ATL can show you how to authenticate your products in the field. If you are a consumer, we suggest that you purchase only authenticated prescription drugs from reliable sources.

We thank the FDA for materials used in this article.

You Bet Your Life – Part II. Dangerous (Fake) Pharmaceuticals. A Lesson For You In Loss Prevention.

February 3rd, 2010

You Bet Your Life: The Fakes. A Lesson For You In Loss Prevention.
A counterfeit drug or a counterfeit medicine is a medication or pharmaceutical product which is produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness. For legal drugs, a counterfeit drug may be one which does not contain active ingredients, contains an insufficient quantity of active ingredients, or contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate, incorrect, or fake packaging. Fake medicines and generic drugs which are deliberately mislabeled in order to deceive consumers are therefore counterfeit, while a drug which has not received regulatory approval is not necessarily so. Counterfeit drugs are also related to Pharma Fraud.

Most illegal drugs are produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness, at least to some degree. The counterfeiting ranges from drugs which do not contain any active ingredients (e.g., when a bag of lactose is sold as cocaine), to cases where the active ingredients are “cut” with a dilutant or “spiked” with a chemical “enhancer”, to cases where the actual active ingredients differ from the purported active ingredients (e.g., when methamphetamine is sold as cocaine).

You Bet Your Life: Brand Piracy. Prescription and over-the-counter drugs.

Counterfeit legal drugs include falsely-labeled drugs that were previously expired, drugs where the active ingredient is fraudulently diluted, adulterated, substituted, completely misrepresented, or sold with a false brand name. An individual who uses a low quality counterfeit medication may experience a number of dangerous consequences to their health, such as unexpected side effects, allergic reactions, or a worsening of their medical condition. A number of counterfeits do not contain any active ingredients, and instead contain inert substances, which do not provide the patient any treatment benefits. Counterfeit medications may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.

The extent of the problem of counterfeit drugs is unknown. Counterfeiting is difficult to detect, investigate, and quantify. What is known is that they occur worldwide and are said to be more prevalent in some developing countries with weak regulatory regimes. It is sometimes estimated that upwards of 10% of drugs worldwide are counterfeit, and in some countries more than 50% of the drug supply is made up of counterfeit drugs. In 2003, the World Health Organization cited estimates that the annual earnings of counterfeit drugs were over $32 billion (US).

The high prices of patented medicines and the great divergence between manufacturing costs and prices are seen as important incentives for counterfeiting, including cases of high quality counterfeiting which can be difficult to detect. Fake antibiotics with a low concentration of the active ingredients can do damage world wide. Courses of antibiotics that are not seen through to completion allow bacteria to regroup and develop resistance.

Above Photo: Which are real and which are fake? Without traceability and authentication, how do you know? Would “You Bet Your Life” on not knowing?

You Bet Your Life: Some Solutions (RFID & Mass Serialization).

There are several technologies that may prove helpful in combating this problem, such as radio frequency identification (RFID). These are electronic devices to track and identify items, such as pharmaceutical products, by assigning individual serial numbers to the containers holding each product. The FDA is working towards an Electronic pedigree (ePedigree) system to track drugs from factory to pharmacy. This technology may prevent the diversion or counterfeiting of drugs by allowing wholesalers and pharmacists to determine the identity and dosage of individual products. Some techniques, such as spectroscopy and Energy Dispersive X-Ray Diffraction (EDXRD) can be used to discover counterfeit drugs while still inside their packaging.Some of the proposed anti-counterfeiting measures present concerns regarding privacy, or the possibility that drug manufactures will seek to use anti-counterfeiting technologies to undermine legitimate parallel trade in medicines. The term “counterfeit” should not be applied to generic drugs that are legally manufactured and sold, and which do not have deceptive labeling concerning the product. According to BBC reports, many of the fake drugs came from the same countries that make normal drugs, especially China and India. In the case of India, while it is against the law to sell fake drugs for domestic use, there is no regulatory regime that applies to the export market.

Graph Above: The top 5 anti-counterfeiting techniques are date codes, various printing, tamper evident, UPC codes, and mass serialization.

China
Many counterfeit drugs sold in the Third World or on the Internet originate in China. The State Food and Drug Administration is not responsible for regulating pharmaceutical ingredients manufactured and exported by chemical companies. This regulatory hole, which has resulted in considerable international news coverage unfavorable to China, has been known for a decade, but failure of Chinese regulatory agencies to cooperate has prevented effective regulation.
The Chinese press agency Xinhua reported that the World Health Organization had established Rapid Alert System (RAS), the world’s first web-based system for tracking the activities of drug counterfeiters, in light of the increasing severity of the problem of counterfeit drugs.

Russia
A few years ago, the Coalition for Intellectual Property Rights, an independent Russian group, conducted a survey that found that 12 percent of the prescription drugs distributed in Russia were counterfeit.

India
According to a report released by the Organization for Economic Co-operation and Development (OECD), 75 per cent of fake drugs supplied world over have some origins in India, followed by 7 per cent from Egypt and 6 per cent from China. It must be noted that India also is a leading source of high quality drugs sold by legitimate drug manufacturers, including most leading brand name drug makers operating in the US and Europe.

United States
The United States has had a growing problem with counterfeit drugs, and to help address it, the U.S. Food and Drug Administration (FDA) holds regular hearings to review trends and problems. The U.S. is an especially attractive market for counterfeiters because 40 percent of worldwide annual prescription drug sales were sold in the United States in 2007.

You Bet You Life: Anti-Counterfeit Platforms.
In 2007, the world’s first free to access anti-counterfeit platform was established in the West African country of Ghana. The platform relies on existing GSM networks in that country to provide pharmaceutical consumers and patients with the means to verify whether their purchased medicines are from the original source through a free two-way SMS message, provided the manufacturer of the relevant medication has subscribed to a special scheme. Still in trial stages, the implementers of the platform announced recently that they are in partnership with Ghana’s Ministry of Health and the country’s specialized agency responsible for drug safety, the FDB (Food & Drugs Board), to move the platform from pilot to full-deployment stage.

An Epedigree is another important system for the automatic detection of counterfeit drugs.

Photo Above: Hard copy of typical pedigree papers.

Photo Above: Pedigree papers can provide traceability of your prescription medications.

States such as California are increasingly requiring pharmaceutical companies to generate and store ePedigrees for each product they handle. On January 5th, 2007 EPCglobal ratified the Pedigree Standard as an international standard that specifies an XML description of the life history of a product across an arbitrarily complex supply chain.

You Bet Your Life: Illegal Drugs.
Illegal drugs can be counterfeited easily because the illegal drug market is an unregulated underground economy that rarely adheres to quality norms or safety standards. While there are some isolated examples of illegal drugs being sold under “brand names” that indicated that certain standards or dosage levels were being adhered to, this is the exception. The illegal “brands” can also be counterfeited by drug dealers who want to be able to sell their product at a higher price.
The use of dilutants in illegal drugs reduces the quality and potency of the drugs, and makes it hard for users to determine the appropriate dosage level. Dilutants include “foodstuffs (flour and baby milk formula), sugars (glucose, lactose, maltose, and mannitol), and inorganic materials such as powder.” The type of dilutants that are used often depend on the way that the drug purchasers will typically consume the drug in a given part of the illegal market. Dr. Hirsch, the New York Medical Examiner, claimed that buying illegal drugs is “… like playing Russian roulette.”

This is why we say that if you take prescription medications without “drug authentication”, you are playing a dangerous game of “You Bet Your Life“.

End.

Below: Article break. Are prices “sky high”?


Fools Rush In Where Angels Dare To Tread: Anti-Counterfeiting Measures Require Patience And Wisdom. Donfucius’ Presents A Modern Day “Ten”.

February 1st, 2010

Counterfeiting stinks! Anti-counterfeiting takes patience and wisdom.

Point Number 1: Counterfeiters are perfectly willing to eat a legitimate brand owner’s lunch. Anti-Counterfeiting measures take patience and wisdom. Just as “shoplifting is stealing”, counterfeiting is not a victimless crime, “it can be (and is) murder”. — Donfucius

Point Number 2: “Diplomacy is the art of saying “Nice doggie” until you can find a rock.” — Will Rogers

Point Number 3: “My father said there were two kinds of people in the world: givers and takers. The takers may eat better, but the givers sleep better.” — Marlo Thomas

Counterfeiters Are Copy-Cats.

Counterfeiters are copycats.

Point Number 4: “No matter how much cats fight, there always seem to be plenty of kittens.” — Abraham Lincoln

We, as a nation, must take positive action against the counterfeiters.

Point Number 5: “Don’t talk about what you have done or what you are going to do. Do you want to know who you are? Don’t ask. Act! Action will delineate and define you.”
Thomas Jefferson

Point Number 6: “First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst.” — Dale Carnegie

Tough Laws are needed to fast track anti-counterfeiting systems, and stiff fines and jail terms are necessary for those that place the public at risk.

Point Number 7: “I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the US Congress.” — Ronald Reagan

Counterfeiting requires tough measures. We're not in Mayberry any more.

Above: Anti-Counterfeiting measures require tough and decisive actions. We’re not in Mayberry anymore.

Point Number 8: “Wise are those who learn that the bottom line doesn’t always have to be their top priority.” — William A. Ward

The counterfeiting problem is not insurmountable.

Point Number 9: “Don’t let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use.” — Earl Nightingale

The only thing we have to fear is not doing anything.

Point Number 10: “You never change the existing reality by fighting it. Instead, create a new model that makes the old one obsolete.” — R. Buckminster Fuller

Mindsets. Counterfeiters have the mindset that they can break the laws, provide fake or diluted products, and they do not care if they place the public in harms way. We (you and I) have to have the mindset that says, “No, you can’t do this“. — Donfucius

Recent Counterfeiters And Their Illicit Deeds – Leonardo DiCaprio In “Catch Me If You Can!”

January 24th, 2010

I am amazed when people look at a problem and choose to do nothing. It is very similar to talking about the heavens and stars. Why is it that when you tell a person that there are 400 billion stars in the sky – he will believe you? But tell this same person a bench is wet and he will have to touch it. The same holds true for counterfeiting. Most people know it’s a big problem, yet most people stay in denial, hoping the problem will not affect them (when in reality it already has). To help give you a perspective on the huge scope of the counterfeiting problem, I have chosen to tell you five stories about counterfeiters:

Counterfeiting History – Part 1: Frank William Abagnale Jr worked under 8 identities during the 1960s, including his first as Pan American Airlines Pilot Frank Williams. In 5 years, he passed over $2.5 million in counterfeit checks. This fraud was in 26 countries and all 50 states. He was arrested in France at an Air France ticket counter when an agent recognized his face from a wanted poster. In the movie based on his life, “Catch Me if You Can”, the real Abagnale made a cameo appearance as a French policeman (photo above). Leonardo DiCaprio and Tom Hanks were the stars.

Counterfeiting History – Part 2: Anatasios Arnaouti is a criminal from Manchester who led one of the most ambitious forgery operations in history. He and his accomplices were jailed in 2005. The total amount of counterfeit money they printed is unknown as their forgery operation had been in production for several years, and was capable of producing tens of thousands of counterfeit notes each day. The extent of the crime was considered so severe that it could have driven the United States and UK economies into panic.

Counterfeiting History – Part 3: In 2004, French police seized fake 10 euro and 20 euro counterfeit bank notes worth a total of around 1.8 million (pounds) from two laboratories and estimated that 145,000 counterfeit notes had already entered circulation.

Counterfeiting History – Part 4: In 2006, a Pakistani government printing press in the city of Quetta was accused of mass producing huge quantities of counterfeit Indian bank notes. The “Times of India” reported this scandal, based on Central Bureau of Intelligence investigation. The money was allegedly used to fund terrorist activities inside India. It is believed that bombings in Mumbai were funded using this fake currency.

Counterfeiting History – Part 5: Today the (hardest to detect) counterfeit notes are claimed to be US dollar bills produced in North Korea, called “Super Dollars” because of their high quality. The US government believes they have been circulating since the late 1980s and that they serve two purposes: as a source of income and to undermine the US economy. The United States has taken steps to “Mix & Rotate” the production of dollars. For more details, please reference “The President’s Corner” from October 7th, 2008.

How To Fight Back
Detecting counterfeit bills often isn’t easy by eye. A bogus $100 bill (believed to have been made in North Korea), would be nearly impossible for a novice to identify as a fake. The paper it is printed on contains no starch and doesn’t reflect ultraviolet light, which is one sign of a counterfeit. It has the security strip on the left side of the bill and a watermark of Ben Franklin (whose portrait is on the bill) on the right-hand side, as well as replicating other security features.

There is now a scanner that searches for missing covert features in bogus “Super Dollars”. The device looks at several aspects of the bill to confirm its legitimacy. U.S. paper money is printed with magnetic ink, but that’s also used for many fraudulent bills. On real bills the ink is distributed in a consistent pattern whose magnetic resonance can be mapped. The magnetic map is stored in the scanner, as well as three other maps containing ultraviolet, infrared and other measurements taken from legitimate bills. Scanning a bill takes less than one second. If there’s any spike, any anomaly in any of the threads of data, the scanner rejects the dollar.

What I have just described is a “Layered” approach in anti-counterfeiting. You may not be the government fighting “super dollars”, but then again, you are fighting to protect your brand from counterfeiters. The money you save in brand protection and litigation should be considered as “super dollars” to you. In the process (of saving money) you will be protecting the public.

Here How Forensic Authentication Works: (1) A unique digital code, “ATL 12-IDGJ”, is set-up for your brand; (2) Your digital code is incorporated into the label through multiple entry points (Inks, Varnishes, Adhesives) (This is a “mix and rotate” “layered” approach); (4) The digital code is also incorporated into (or linked to) the Pedigree Documentation; (5) If the scanner indicates “ATL 12-IDGJ” then the established digital code allows traceability; (6) This uniqueness cannot be duplicated; (7) Thus it is impossible to counterfeit.

It only takes a second to authenticate your product anywhere in the world (scanner photo above). This is because the invisible, non-degradable forensic digital code is virtually impossible for the counterfeiters to duplicate. This amazing technology is from ID Global, the leader in scientific identification.

Counterfeiters are attacking us on all fronts. Protect yourself and your brand. Benjamin Franklin said it best: “Even a tiny leak can sink a great ship.”

“To Counterfeit Is Death: Y2K+10 Version”. The Bucket Shops. How Counterfeiters Harm The Public.

January 23rd, 2010

What is a Y2K+10 (year 2010) bucket shop? How does a bucket shop affect the manufacturer of legitimate brands? Look at the two photos below, one of a counterfeiter’s equipment (the bucket shop), and one of a counterfeiters press (also a bucket shop). These facilities can be in a basement or garage, and are usually filthy.

If you are a regular visitor of “The President’s Corner”, then you know that counterfeiting has been around since the birth of our nation. Early United States currency had “To Counterfeit Is Death” printed on the notes. This was a serious crime in the years 1759 – 1777 (and beyond). But let me try and get you to think about a new paradigm: “To Counterfeit Is Death – Y2K+10 Version”. The counterfeiters of the new millennium (Y2K) really do kill people. Diluted vaccines, tainted baby formula, prescription drugs with very little (or no) active ingredients at all – these are the lowest of all possible crimes. The counterfeiters seldom see their victims. If they get caught, their fines are minuscule, no more than just a “slap on the wrist”. How do the criminals attack your legitimate products? And more importantly – how do you fight back?

Counterfeiters rip you off by reformulating (dilution or complete fakes) and re-packaging – the replacement of labels with copies. This is huge problem at all levels of the supply chain. Fraudulent labels are used to change the dates of expired product, make false claims or misrepresentations, and inflate pricing. (Pricing can be inflated because a 5 mg dose can be reprinted to claim a 40 mg dose). Quite often these (counterfeited) prescription drugs are administered to very weak cancer or aids patients, and the doctors think the drugs are not working because of the advanced state of the disease. Little do the doctors realize they may be giving their patients diluted or fake medicines. This is why I say “To Counterfeit Is Death”.

Brand Owners Can Fight Back. Tamper Evident Labels (ATL Secur-Lock or Pharma- Void) use substrates that effectively deter re-marking and counterfeiting fraud. This helps prevent a negative economic impact on your brand. The label face stock combines a tamper evident feature with covert authentication. Labels using this substrate are very difficult to remove (they destroy themselves when removed) . . . and can be easily distinguished from a fake.
When combined with ATL’s covert printing, tamper evident substrates can be your cornerstone of a highly protective labeling solution. Tamper evident substrates features include:
- Destructible, paper-based face stock
- Non-reproducible covert security fibers
- Distribution limited to approved secure suppliers

Tamper Evident Substrates Benefits
- Label cannot be removed without visible damage
- Effectively deters re-marking
- Assures product authenticity, or provides or provides simple in-field authentication
- Secure chain of custody
- Covert Authentication
- Tamper Evidence

Twelve Elements Of A secure Supply Chain/ Cold-Chain. Quality Management of the distribution channel begins and ends with the brand owner. Below is the first slide of a presentation I recently made to “Cold Chain Distribution Professionals” at the Philadelphia Convention Center.

I recommended a 12 step approach to strengthen their cold-chains (the logistical system of safely delivering their products). My advice to them is detailed in “The President’s Corner” published October 4th, 2008.
If you would like to discuss your anti-counterfeiting needs, please contact ATL for a no obligation conversation” about your supply chain. We feel that we have solid experience in anti-counterfeiting. I’ll say this over and over – our main focus is not that you buy something from ATL, rather that you learn from knowledgeable people about the perils of counterfeiting.

I will end this segment with the following words of wisdom: “Believe it is possible to solve your problem. Tremendous things happen to the believer. So believe the answer will come. It will.” — Norman Vincent Peale

U.S. Anti-Counterfeiting History – Recent Demoninations And “Layered” Covert Techniques.

January 22nd, 2010

Criminals around the world have found that they can maximize gain with relatively little capital outlay through product fraud. It could be pharmaceuticals, baby formula, toothpaste, brake pads, or toys. The more fraud that we allow to take place, the more patients will be put at risk for counterfeit medicines, or, the more chance that your children (or grand-children) will have toxic lead paint on their toys. The problem goes beyond violation of intellectual property rights. Counterfeiting is not a victimless crime. People die each day from unsafe counterfeited items. The problem is as old as mankind.

Early currency was plainly labeled “To Counterfeit Is Death”. The example below is a 4 Pound Note issued by Pennsylvania in 1777.

The theory behind such harsh punishments was that one who had the skills to counterfeit currency was considered a threat to the safety of the state, and had to be eliminated. Far more fortunate was an earlier practitioner of the same art, active in the time of the Emperor Justinian (527 A.D., mosaic shown below), who got the nickname “Alexander The Barber”. Rather than executing the counterfeiter when he was caught, the Emperor decided to employ his financial talents in the government’s own service.

Modern U.S. Currency has changed many times over the past few years:

With the exception of the one-dollar bill (above), all of these notes are obsolete. This is because the United States Government “Mixes & Rotates” (M&R) its overt and covert techniques to stay one step ahead of the counterfeiters. Shown below are examples of anti-counterfeiting “layered levels” of the “ever-changing” “face” of U.S. notes. You will notice the different colors when compared to the notes that are now obsolete:

Overt and Covert M&R (Mix And Rotate) anti-counterfeiting measures include fine detail with raised intaglio printing on bills. This allows non-experts to easily spot forgeries. As a side note, on coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, this does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold.

For paper bills, in the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. To combat this, national engraving bureaus began to include new (more sophisticated) anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, microprinting, and inks whose colors change depending on the angle of the light. New technology also includes the use of design features such as the “Eurion Constellation” which disables modern photocopiers.

This is very similar in concept to the “Canada Green” overprint on the U.S. 1862 note (used almost 150 years ago). The tint made it very difficult to photograph (complete story and photo are in the President’s Corner dated October 6th, 2008).

To protect your intellectual property, ATL recommends that you educate yourself about overt and covert anti-counterfeiting (anti-piracy) technologies. We also recommend that you take a long look in the mirror. You, as a brand owner, have the power to do the right things. You have the power to protect the public against diversion, dillution, and counterfeiting. By taking these extra steps you will find out something very surprising in the journey – you, in all likelihood, will be saving money in the process.

Bill Cosby said it best: “A word to the wise ain’t necessary – it’s the stupid ones that need the advice.”

Benjamin Franklin’s Anti-Counterfeiting Secrets

January 21st, 2010

Counterfeiting has been in existence since the dawn of civilization. Did you know “The United Colonies” had to deal with counterfeiters? This Four Dollar Bill (November 29th, 1775), printed in Philadelphia by “Hall and Sellers”, had an actual “leaf” in the design on the reverse side. This idea came from Benjamin Franklin. The uniqueness of the leaf made the currency very difficult to counterfeit. In this era, counterfeiting was considered so serious that it was punishable by death, and was so noted on some currencies. Today, as in 1775, counterfeiting is not a “victimless” crime.
Twenty Shilling Note, To Counterfeit is Death. (Philadelphia: Printed by Franklin and Hall, 1759). Paper money printed from ordinary type was easy to counterfeit, but Franklin ingeniously solved that problem by printing pictures of leaves on every piece of money. Counterfeiters could not duplicate or even imitate the fine lines and irregular patterns. In the Twenty Shilling note (shown below), the phrase “To Counterfeit Is Death” is printed directly above the leaf.
If you make something of value, everything from jeans to life-saving pharmaceuticals, counterfeiters are studying your supply (or cold) chain. They will strike where you are most vulnerable. For you to think that you are not at risk is to be in a state of denial.

A very wise man at Abbott Labs, Mike Douma, said: “Don’t be afraid to uncover things that you are not proud of when you look at your products and processes.”

ATL has many overt and covert techniques to provide you with a “layered approach” in brand protection. We strongly recommend a mix and rotate (M&R) approach. In this mode, manufacturers vary the size, location, and amount of anti-counterfeiting “layered” protection. In this manner you are a step ahead, and counterfeiters will be trying to catch up to you.

Article Break: Donfucius’ “Election Whimsy-A Collection…”
“If life were fair, Dan Quayle would be making a living asking ‘Do you want fries with that?’” — John Cleese

Faking It. Nothing Phony About Profits In The Knockoff Business.

January 21st, 2010

President’s notes: The IACC (International Anti-Counterfeiting Coalition) is an organization dedicated to fighting counterfeit goods. This article courtesy of Ambrose Clancy, Long Island Business News.

A couple of years ago a building inspector in North Hempstead was checking out a warehouse when he noticed something was wrong with the back gates. As he walked in to inform the owner about the problem, several Asian women bolted past him, piled into a van and sped off.

Faking It

Photo above. Fake goods. Bad quality and very bad for the economy. Why? Counterfeiters do not pay taxes, but you do.

Inside were boxes of Timberland boots. Well, the label said Timberland. Actually they were cheap knockoffs manufactured in China and smuggled into the Port of New York/New Jersey.

“They were moving thousands and thousands of boots out of there,” said Detective Sgt. Thomas Riley of the Nassau County Police Department.

Trademark counterfeiting is ” where a brand name is essentially stolen and slapped on a cheaper and vastly inferior copy”. This is big business. On Long Island, fakes are sold at nearly every flea market, in carwashes, delis, mom-and-pop stores and at kiosks in the malls. They change hands at shopping parties in people’s homes and from the trunks of cars by so-called “bag ladies.” These are not homeless women but crooks hawking what on first glance looks like a Louis Vuitton bag for a quarter of the price, but in reality is a inferior product, doomed to fall apart in six months.

Figures on the size of the counterfeit market are murky. More than $600 billion has been mentioned as the amount of cash generated by worldwide counterfeiting of apparel, luggage, handbags, sunglasses and other designer goods.

But Susan Scafidi, a law professor at Fordham University and an expert in intellectual property law, said all figures are suspect, since counterfeiters don’t file with the Internal Revenue Service.

“The $600 billion is a vague number taken from estimates that something like 7 percent of world trade is counterfeit,” said Scafidi, who also runs the up-to-the minute blog Counterfeit Chic, tracking the fashion industry’s battle against fakes.

Bob Barchiesi, president of the International Anti-Counterfeiting Coalition, had no problem with the $600 billion global figure, adding that the total for the United States is a quarter of a trillion dollars. Formed in 1979, the IACC works with investigators and law firms, lobbies politicians and gets the word out.

“This is a serious problem and not getting any better,” said Barchiesi.

Photo below. Counterfeits are a world wide problem, including fake baby formula. Hong Kong’s two biggest grocery chains removed all milk made by the leading Chinese dairy after traces of a chemical that killed and sickened babies was found in products in mainland China. (AP Photo/Kin Cheung)

Above: Logo Of Product Being Removed From Chinese Stores

Above: Logo Of Product Being Removed From Chinese Stores

The criminal enterprises began in the late 1960s when fashion designers figured out that copyright and patent laws don’t protect designs, Scafidi said. As a response, designers placed visible logos on garments and bags, in part because the logos were copyright protected, even if the designs were not.

But then the counterfeiters moved in, copying those logos in an effort to trick buyers into believing their wares were the real thing.

Fifteen years ago when China became a manufacturing powerhouse, the illegal trade boomed, said Barchiesi, who estimated that 85 percent of trademark counterfeiting comes from China.

The goods are moved in shipping containers, mislabeled from electrical equipment to actual clothing, Riley said. Some clever importers recently moved winter coats with a Chinese label and when the New York contact picked them up, the Chinese labels were peeled off to reveal a North Face logo, he added.

The classic crime success story is very low risk and very high reward. Trademark counterfeiting is all of that, said Barchiesi, adding that the illegal trade is safer and more profitable than importing heroin.

“The low risk is the judicial system doesn’t levy out significant penalties for this type of crime,” he said.

Trademark counterfeiting law in New York has two degrees of felony offense, with a second degree charged if more than $1,000 worth of merchandise is sold, according to Deputy Inspector James Burke, commanding officer of the Suffolk County Police Department’s District Attorney Squad.

“But the real rub is that a first-degree offense is only when $100,000 worth of illegal goods are sold,” Burke said. Stay below $100,000 and if you’re convicted, you can expect one to four years in jail. Cross the line and it’s five to 15.

Another low-risk factor for criminals is diminishing resources in law enforcement, Burke said. There is no trademark counterfeiting squad in any Long Island department. “Violent crime trumps trademark counterfeiting every time,” Burke added.

Law enforcement mainly works with companies, trade associations and private investigators to fight the fakes, he said.

Investigator Andrew Oberfeldt has been ferreting out counterfeiters on Long Island since 1991 for the Manhattan firm Abacus Security & Investigation. He works mainly on tips from jealous competitors.

“Informants are motivated by greed and envy,” Oberfeldt said.

He’s seen fake goods in beauty parlors, gas stations, small clothing and shoe stores. Bag ladies go to Manhattan’s Chinatown twice a month and load up on bogus handbags, he said. “They drive around the Island with stuff in their trunk and sell it where people work,” he added. If they know the receptionist at a doctor’s office, for example, they will drop by and hustle the bags in the waiting room.

It has become so commonplace that many people don’t consider it a crime. Oberfeldt had a friend in the Nassau County Police Department who was approached by a secretary at headquarters offering to sell designer clothes. He said, “Sure, lead the way,” the investigator said. “Out in the parking lot, he took one look at the stuff and locked her up.”

To those who say trademark counterfeiting is a victimless crime, all experts beg to differ. Not only do legitimate businesses suffer, but taxes are never paid on the goods sold. (Estimates on annual unpaid taxes approach $1 billion.)

Buying these goods supports violent criminals. Buying a knockoff pair of designer jeans also supports Third World sweatshops, where children labor for slave wages in appalling conditions.

Going for an illegal bargain can also be physically dangerous, Sgt. Riley said, referring to the brisk trade in fake electronics products.

“Buy a replacement cord for your coffee maker and if it’s counterfeit you’ve got a fire hazard,” he said.

game-boy-exploding

Photo above. Fake goods can hurt you. Here is an exploding counterfeit battery from a hand held video device. Cell phones are also at risk.

Another hazard could be related to knockoff Major League Baseball items. Jerseys and caps for adults and children are often processed with toxic chemicals and contain no flame-resistant elements.

According to MLB spokesman Matt Bourne, in the past five years organized baseball has seized more than four million pieces of counterfeit goods.

On a slow morning last week at the mammoth indoor Attitas Flea market in Sayville, Mets home jerseys were going for $35, more than half off the MLB price.

Genuine MLB merchandise is identified by a hologram attached either to the product or to a hang tag. Some jerseys at Attitas had the hologram, most did not. When someone brought the lack of holograms to the merchant’s attention, he said, “All I know is these are official.”

He then wasn’t interested in continuing the conversation.

zp-005-fake-and-real-hologram

Photo above. Fake and real hologram. Once a counterfeiter targets a product, a fake hologram can be made within 24 hours.

Rip-off artists

A crime related to counterfeiting trademarked goods is music piracy, which is swamping the recorded music industry. The Recording Industry Association of America said pirates cost the music industry $12.5 billion annually and that 71,000 jobs have been lost over the past five years. Thieves have also cost the government $422 million in unpaid taxes.

Although it’s a worldwide problem, there are homegrown illegal manufacturers as well, mostly involved in pirating music with CD “burner factories” set up in office parks on Long Island and funded in some instances by organized crime, said Bob Barchiesi, president of the International Anti-Counterfeiting Coalition.

The music pirates have made the music makers change strategies. Since 2003, music companies sued 35,000 individuals for copying music online. Last December, however, they waved the white flag.

This was a combination of ineffectiveness and disastrous public relations. The practice of suing teenagers and single moms came across as bullying.

Instead, the RIAA asked for help from the Internet service providers to stop music piracy and a preliminary agreement has been reached. When file sharing is discovered, RIAA will inform the provider and the provider will then tell the offending customer to stop. If the customer is unwilling to do so, the provider can then cut off access to the offender.

Til Death Do You Part?

March 12th, 2009

We would like to give you a glimpse of the counterfeit drug issues as they exist today. The simple fact is that your life may be at risk, or the life of someone close to you. As you read of the startling facts, please look for the words “ATL Security Note”. At this juncture we will recommend a solution that will inhibit (or eliminate) the counterfeiters ability to provide you (the public) with fake or diluted medicines.

Photo Above: Illicit drugs that were gathered during a law enforcement raid.

Counterfeit Medications – History

First documented cases of counterfeit medicines date back to 4th century BC. For more than 2,000 years, issue of fraudulent production of medicines has mostly been ignored.
Today it is multi-billion-dollar worldwide trade. Fake drugs are estimated to lead directly to the deaths of more than 500,000 people a year across the globe.

WHO (World Health Organization)

Definition of a Counterfeit Medicine

“A counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with correct ingredients, wrong ingredients, without active ingredients, with insufficient quantity of active ingredient or with fake packaging.”

Counterfeit Medications

The illicit business is worth $18 billion. It is estimated that it will double in the next two years. It represents about 10% of all pharmaceutical sales worldwide.
30% of medicines in Russia and some countries in Africa, Asia and Latin America are counterfeit. In wealthy nations this figure is approximately three percent.
In the United States this equates to eight million packs of medicines worth approximately $975 million a year.
Approximately 25% of all emails – 15 billion messages a day – are spam advertising drugs. 50% of medicines offered by websites that conceal their physical addresses are fakes. Counterfeited, diverted, and diluted medications make more illicit money than cocaine and heroin.
In 2005, more than 500,000 single doses of fake medicines were discovered across Europe. In 2006 this number had shot up to 2.5 million. Only because fake drugs have spread from local markets to more global outlets, aided by the rise of the internet, has the world recognized the magnitude of the problem.

Photo Above: This machine is manufacturing fake drugs.

WHO & IMPACT

In February 2006, WHO created first global partnership known as International Medicinal Products Anti-Counterfeiting Taskforce (IMPACT). It is made up of all 193 WHO Member States on voluntary basis. The goal is to improve coordination and harmonization across and between countries so eventually production, trading and selling of fake medicines will cease.

IMPACT focuses on following key areas:
Looks at existing laws in countries.
Provides effective models countries can use.
Develops set of principles for establishment of appropriate legislation and penal sanctions.
Coordinates action at local levels between health authorities, police, customs, and judiciary institutions to ensure proper regulation, control, investigation and prosecution.
Helps countries with weak regulatory systems to strengthen them.
Comprised of five working groups to combat the spread of counterfeits:
- legislative and regulatory infrastructure
- regulatory implementation
- enforcement
- technology
- communication

The United States and Fake Medicines

The US is a lucrative market for counterfeiters of medicines and medical devices. This is because of high prices, a large market, widespread internet connectivity, and complex supply chain. Counterfeits are not normally manufactured in US. They are distributed through online pharmacies, most of which are outside the United States.

50% of medicines sourced from websites that conceal their physical address are counterfeit. These websites advertise and supply medicines illegally, with no prescriptions.
The fake drugs are discovered in the regulated supply chain, through licensed wholesalers, parallel traders, and pharmacies.

Thus, counterfeit medicines reach patients necessitating batch recalls. Fake medicines found in US regulated supply chain are designed to deceive pharmacists and patients into believing that they are genuine. Often only laboratory analysis reveals counterfeit product.

ATL Security Note: the need for lab analysis can be reduced by the use of a mixed and rotated “layered” security approach in labels and packaging. Invisible forensic digital markers can authenticate the product as genuine from virtually anywhere in the world.

Counterfeit medicines discovered in US typically contain reduced amount of active
pharmaceutical ingredient, or wrong ingredient, or no ingredient.

All counterfeit medicines are dangerous.

There are also reports of counterfeit medical devices discovered in US, or seized on their way to US.
Drug counterfeiting occurs less frequently in the US due to strict regulatory framework that governs production of drug products and distribution chain, and enforcement against violators.
The FDA works to ensure overall quality of drug products that consumers purchase from US pharmacies remains high.
The FDA advises pharmacists, physicians, and other healthcare professionals on drugs most likely to be counterfeited and how to identify them.

A suspect patient may have received counterfeit drug if:
He has unexplained worsening of medical condition or unexpected side effect.
He reports drug tastes or looks different, tablets chipped or cracked.
He experiences unusual burning at injection site.

Photo Above: Are you willing to keep taking drugs that are not authenticated as genuine? Will you do this until “death do you part?”

The Internet

Online pharmacies offer benefits of convenience, privacy, and (often) cheaper prices.
Many online pharmacies appear reputable and similar to legitimate retail pharmacy websites BUT sell fake pills that:
- do not contain medicine approved by regulators.
- have doses that are too strong or too weak.
- contain dangerous ingredients.
- aren’t manufactured using safe standards.
- aren’t labelled, packaged or shipped properly.
- are out of date.

Online pharmacies flourish because the public cannot get many new medicines for cancer, dementia, or influenza from publicly funded services. Many sites connected to other sites and have multiple links making investigation difficult. There are jurisdictional challenges as regulatory and enforcement issues cross international lines. The system is difficult to regulate – but governments can do more to warn public of the dangers.

India

India accounts for approximately one-third of counterfeit (fake, diverted, or diluted) drugs.
The EC claims India largest source of 2.7 million counterfeit drugs was seized by its customs in 2006.
India is the number one source of counterfeit medicines, followed by UAE and China.
India’s existing regulations pose little deterrence to unscrupulous drug vendors.

India is to introduce the death penalty for sale and manufacture of fake and counterfeit medicines that cause grievous harm. The minimum prison sentence is to be increased from five to ten years. There will be higher fines for those convicted for trading in fake drugs.

Drug regulatory officials are often in collusion with manufacturers of fake medicines.
It is against the law to sell fake drugs for domestic use, but no regulatory requirements apply to India’s export market.
Common fake drugs are antibiotics, drugs for tuberculosis, malaria, and cough syrups, as well as ingredients for lifestyle drugs.
Exportation of Active Pharmaceutical Ingredient (API) plays integral role in the manufacture of counterfeit medicines.

ATL Security Note: the use of a mixed and rotated “layered” security approach in labels and packaging works just the same when protecting the public for the purity of API (Active Pharmaceutical Ingredients). Invisible forensic digital markers, color-shifting inks, and other covert features can protect the public by ensuring the API are genuine. This is commonly known as maintaining the “pedigree”.

During first six months in 2005, more than 250kg of sildenafil citrate, Viagra’s active ingredient, were exported from India to Europe. Out of one kilogram sildenafil citrate, approximately 14,000 tablets of counterfeit Viagra-pills can be produced. If sold at normal market price of genuine Viagra a profit of up to 2,000% could result.

Photo Above: Real and fake drugs, side by side. Which would you take?

China

In China, between 200,000 and 300,000 people are estimated to die each year because of counterfeit or substandard medicines. The current baby formula incidents are a sad reminder of the human pain and suffering.

China has 80,000 chemical companies, and the FDA does not know how many sell ingredients used in drugs consumed by Americans. China exports “drug ingredients” to customers in 150 countries.

China’s State Food and Drug Administration is not responsible for regulating pharmaceutical ingredients manufactured and exported by chemical companies.
Corruption and lack of protection for whistleblowers undermines China’s attempt to establish a more rigorous drug regulatory system.

In 2007, a series of scandals involving counterfeit pharmaceutical exports led to intense international pressure on the Chinese government. This resulted in conviction and subsequent sentencing to death of the country’s two top drug regulators for accepting bribes.
Some counterfeiters have the same equipment used by pharmaceutical companies.
Cases have occurred of pharmaceutical laboratories that manufacture genuine drugs during business hours and produce counterfeits at night.
Counterfeiters have set up companies that provide service of disposing of expired medicines, thus they obtain real expired medicines that they repack and re-label.

ATL Security Note. Repackaging and relabeling (as described above) could be detected if an invisible forensic code was used in security packaging for the pharmaceuticals. If this covert technique was used, the break in the pedigree could be discovered before the consumer is harmed.

Photo Above: Fake hologram (left), and genuine hologram (right).

ATL Security Note. The following is a portion of the FDA’s conclusions from 2006: “The FDA’s vision of a safe and secure prescription drug supply chain is based on transparency and accountability by all persons who handle the prescription drug throughout the supply chain. With the implementation of the pedigree regulations in December 2006, the FDA expects that supply chain stakeholders will move quickly to adopt electronic track and trace technology, implementing RFID or an alternative track and trace technology in a phased-in approach. Although there are important issues that still need resolution, these issues should not hinder the forward progress and momentum toward widespread adoption. In the meantime, the FDA believes that public health would be better protected if all stakeholders work cooperatively to enable all distributors to pass pedigrees.”

The 2006 Report also considered several technical issues related to adoption of electronic track and trace technology that were perceived as obstacles to implementation and are in need of resolution. These include:
Mass serialization and unique identification of each drug package; and Universal pedigree with national uniform information.

As a brand owner ATL believes that you can protect the public by maintaining a record containing information regarding each transaction that results in a change of ownership of a given drug or pharmaceutical ingredient. This includes its sale by the manufacturer, through the wholesalers, distributors, and pharmacies.
As a brand owner, ATL can work with you to develop:

Lot or batch codes;
Integrated Mass Serialization;
2D DataMatrix Codes;
Forensic (invisible, non-degradable, nano-molecular markers);
Many other covert techniques.

In the 1950′s, when W. Edwards Deming tried to teach U.S. Manufactures about statistical quality control, he was not listened to. At the time, the stigmas of the past (as well as arrogance and ignorance) lived within the powerful decision makers in this country. Dr. Deming went on to huge success in Japan. He believed in quality before it was a buzzword.

“We are here to make another world.” W. Edwards Deming

Photo Above: W. Edwards Deming.

I believe that U.S. pharmaceutical manufacturers (and other brand owners) must protect the public from harm by providing safety and security for the genuine purity of their products. The citizens of the world must demand this.

“We must not inhibit our forward thinking by the comfort levels of the past. If something is not working, you must fix it, repair it, or invent a new paradigm. If you don’t, how many people are you willing to harm for the sake of a few dollars?” Donald J. Dobert, President, ATL.

The Tainted Baby Formula/ Milk Tragedy – From Wisconsin To China. Is It Zhende (Real) Or Jiade (Fake)? How To Fight Back.

October 17th, 2008
Chinese Child Lies In Hospital - Victim Of Tainted Milk

Chinese Child Lies In Hospital - Victim Of Tainted Milk

A hundred years ago, babies who couldn’t be breast-fed usually didn’t survive. Today, although breast-feeding is still the best nourishment for infants, infant formula is a close enough second that babies not only survive, but thrive. Commercially prepared formulas are regulated by the Food and Drug Administration.
The safety of commercially prepared formula is also ensured by the agency’s nutrient requirements and by strict quality control procedures that require manufacturers to analyze each batch of formula for required nutrients, to test samples for stability during the shelf life of the product, to code containers to identify the batch, and to make all records available to FDA investigators.
The composition of infant formula is similar to breast milk, but it isn’t a perfect match, because the exact chemical makeup of breast milk is still unknown. Human milk is very complex, and scientists are still trying to unravel and understand what makes it such a good source of nutrition for rapidly growing and developing infants. John C. Wallingford, Ph.D., an infant nutrition specialist with FDA’s Center for Food Safety and Applied Nutrition, says that “infant formula is increasingly close to breast milk.”
More than half the calories in breast milk come from fat, and the same is true for today’s infant formulas. This may be alarming to many American adults watching their intake of fat and cholesterol, especially when sources of saturated fats, such as coconut oil, are used in formulas. (For adults, high intakes of saturated fats tend to increase blood cholesterol levels more than other fats or oils.) But the low-fat diet recommended for adults doesn’t apply to infants.
“Infants have a very high energy requirement, and they have a restricted volume of food that they can digest,” says Wallingford. “The only way to get the energy density of a food up is to have a high amount of fat.” While greater knowledge about human milk has helped scientists improve infant formula, it has become “increasingly apparent that infant formula can never duplicate human milk. Human milk contains living cells, hormones, active enzymes, immunoglobulins and compounds with unique structures that cannot be replicated in infant formula.”

Illicit Baby Formula In Wisconsin
In 2007 a New Berlin (Wisconsin) grocery wholesaler was under investigation by the FBI on suspicion of buying and selling large quantities of stolen infant formula. Among other things, FBI agents saw approximately 200,000 cans of infant formula, some of which bore indicia (indications) of having been stolen. The FBI indicated that the company regularly received shipments of suspected stolen formula and repackaged the formula before it was sold.
The company “cleaned” the cans by removing store labels and price tags, wiped dust from the cans, repacked the cans into cartons of six, and shrink-wrapped the cartons. One search of trash at the firm’s warehouse (by agents in 2006) revealed that the company had sold more than 17,000 cans of infant formula over an unknown time period. These illicit sales would have generated more than $200,000 in revenue. More about safety risks below (at formula safety).

The China Tragedy. A Blow To Free Society.

Fear Grips Parents Over Tainted Milk & Baby Formula

Fear Grips Parents Over Tainted Milk & Baby Formula

In China, recent deaths related to tainted baby formula should trigger an alarm on more than one front. In the Chinese language, there is one pair of words that you hear constantly: zhende (meaning real, authentic), and jiade (meaning fake, imitated). This pair of words is especially important when shopping, as it depicts the difference in quality between brand name and counterfeit goods. But beyond a difference in quality, zhende and jiade also imply a difference between trust-an unwritten contract-and distrust-the absence of such contract. The deadly, ongoing scandal with tainted baby formula signals an erosion of Chinese trust in supposedly high quality, brand name products-zhende-and a setback to the development of a contract society.

The Chinese economy is growing by double digits. Their citizens hope that this will develop into a “reform and opening” to bring a higher standard of living. Part of this standard of living is symbolized in brand name products. Both small and large cities alike, with the support of officials at all levels, have stores emblazoned with names like Nike and Adidas, among others. Many of these stores and products are jiade (fake). The labels may be inscrutably similar, but the quality will almost assuredly be different. To domestic consumers willing to spend the money on the real deal, however, there is an unspoken contract: we are willing to pay if you are willing to deliver. When it comes to the well being of children, parents are universally willing to pay for zhende (authentic).

The company that is responsible for the tainted baby formula (we will call Comp-X) has essentially become a counterfeit of itself. During months of questions, tests, and reports from both parents and at least one pediatrician, the company continued to sell a product that was not zhende (authentic). Many believe that the Olympics propaganda and journalistic “security” measures stifled coverage of the fake baby formula, the “tainted product”. China is not yet a free and open society, so I believe that China’s period of strict censorship actually provided the company with a real (zhende!) opportunity. It was an opportunity they did not seize.

Hong Kong Police Check Shelves For Counterfeited Baby Formula And Tainted Milk Powder

Hong Kong Police Check Shelves For Counterfeited Baby Formula And Tainted Milk Powder

Above: Logo Of Product Being Removed From Chinese Stores

Above: Logo Of Product Being Removed From Chinese Stores

Comp-X did not quietly recall their tainted formula. They did not instruct health care centers to warn parents of babies with kidney stones that their children’s formula may be playing a role. Instead, Comp-X bribed noisy victims, ironically, with offers of more of their products. The responsibility that Chinese citizens expect from Comp-X was absent. Customers expect to fulfill their part of a public contract with Comp-X through paying more. In return, they expected a product that was not jiade (fake). Yet, for months, infants were suffering the result of Comp-X’s broken contract.

Inspection And Testing Of Counterfeited Milk Powder/ Baby Formula

Inspection And Testing Of Counterfeited Milk Powder/ Baby Formula

This is not the first deadly crisis involving baby formula. In 2004, 13 children died after being repeatedly fed formula that, unbeknownst to their parents, contained no nutrients whatsoever. The difference between the two crises, however, again illustrates the larger problem. The perpetrators of the 2004 incident were the makers of a counterfeit, off-brand product-jiade (fake). This time around, the perpetrator is Comp-X, a brand long held as zhende (authentic).

The difference between buying zhende (authentic) and jiade (fake) generally just means the difference between enjoying a treat and suffering upset stomach. For others, buying zhende or jiade can mean the difference between a year’s salary and a herd of dead livestock, as in cases of counterfeit animal feed. In 2004, although no parent wished his or her child ill, the price of buying jiade was a child’s life. Now, however, to the horror of millions, and a huge setback in the development of a contract society, the lines have blurred.

Why Target Baby Formula?
In the United States, baby formula is one of the more popular items with counterfeiters because of the ease of selling it. It has great street value. There are a lot of young mothers who are willing to pay 50 cents on the dollar for stolen formula. There is a high demand because baby formula is expensive. The consumers buying the stolen formula are young parents with not a lot of money to spend. Today, stolen formula is sold at places like flea markets or over the Internet. This poses a health risk because baby formula is temperature-sensitive.

Formula Safety
The conditions in which counterfeiters are warehousing perishable goods (including those with an expiration date) can be dangerous-even fatal-to consumers. Some baby formula has been stored in garages with rodents running across storage facilities that have no temperature controls whatsoever. When it gets hot the baby formula will break down in nutritional value if it is kept out of its correct temperature range.

The counterfeiters are good at hiding their craft. As part of their operations, the counterfeiters will clean, repackage, and re-label goods to make them appear as legitimate products. They will also switch labels, particularly if items are damaged or out of date. They think nothing of switching labels from one brand of formula to another. Counterfeiters also make counterfeit labels. (see article dated October 8th, 2008, “The Bucket Shops”).

In some cases counterfeiters may even sell the products back to the retailer, unbeknownst to them. And frequently, counterfeiters will sell the products via Internet Web sites, such as eBay. The ease with which criminals can use the Internet to sell the stolen goods now makes it more difficult to investigate these crimes.

Fighting Back

In addition to working with law enforcement, many retailers are trying to make it harder for counterfeiters to disguise the origin of the product. Many of them now stamp their product with their company name and logo, and a store number so that the retail source of the product can be identified if uncovered in a theft or for other purposes, such as a product recall.

Above: Parents In China Worry - The Chain Of Custody Has Been Lost And Children Are At Risk

Above: Parents In China Worry - The Chain Of Custody Has Been Lost And Children Are At Risk

Combating The Counterfeiters. ATL Security Solutions: Each member of the supply channel has to understand that the solution must be a collaborative, united effort to assure the safety of products that pass through their hands. This includes confirming the legitimacy of the item’s source; the doctor, wholesaler, ADR, distributor, manufacturer, and API (Active Pharmaceutical Ingredient) sources.

All it takes is one bad apple: It could be one counterfeiter; one diluted product; one re-dated product; one product with fake labels; one false repackaging run… if any of these events occur, and the secure supply channel is broken, the patients are at risk.

ATL Security Labeling Systems (TM) has a solid product line to assist you in the detection of counterfeiting and diversion. Our brands make it more difficult to steal.
From the pedigree papers to the end user, our SecurBook (TM) labels can provide a complete (100%) supply channel authentication. Identical forensic markers on (pedigree papers, bulk containers, individual units) can be scanned and read to ensure 100% accuracy. This will verify that the brand has not been counterfeited. Patented, portable-scanning units can verify and authenticate in the field.

How Does This Work? ATL Pharma utilizes the unique technology of IDGLOBAL. This consists of custom forensic markers with digital data for tracking. Specific ATL SecurBook labels contain an invisible and non-degradable forensic marker. When applied (or linked) to pedigree documentation, packaging, and containers, the supply channel becomes “secure”, because all “digital data” scans must match as identical. If they match, brand authentication and anti-counterfeiting are ensured. This is why we call ATL brands the “Secur” product line.

Invisible (Non-degradable) Forensic Marker Is Your Assurance Of Brand Authenticity

Invisible (Non-degradable) Forensic Marker Is Your Assurance Of Brand Authenticity

ATL can provide custom solutions tailored to your specific supply channel.
Other ATL Pharma brands include:
SecurLock: Tamper-Evident breakaway closure;
SecurDetek: Invisible, Hidden Page Marker;
SecurMark: Anti-Counterfeiting holograms;
SecurStretch: Tamper-Evident Unit Closure;
SecurPly: Booklets for soft squeeze tubes;
PharmaVoid: Security Closure/ Destructible Tapes;
Triple-Ply: Three-Tier overt and / or covert levels of anti-counterfeiting;
D2 WAO: Wrap-Around style (up to 19 panels) that fit most cylinders-
(U.S. Patent Applied For).

Brand protection (safeguarding the public) doesn’t cost much more than the labels and packaging in use today. If you are a brand owner, why not do the right things. Provide your customers with layered anti-counterfeiting overt and covert protection.

Remember always: “It is a terrible thing to see and have no vision.” Helen Keller

Ringo-John-George-Paul. Counterfeit Beatles Albums.

October 16th, 2008

Above: Two Beatles albums from the “Capitol” days. Did you know there were thousands of counterfeit Beatles albums before Capitol (B.C.)?

I came across an absolutely fascinating article written by Frank Daniels in 2002. It was all about “The Beatles” early albums B.C. (Before Capitol). As I read this I wondered: “If counterfeiters will go through these extreme measures to flood the market with fake records, then I had better be very careful when buying medicines or safety related items.” Here are parts of Mr. Daniels writings:
Fakes and Fantasies
A counterfeit or fake record is one that attempts to pass itself off as a genuine record that was actually issued by a legitimate record company at one time. Sometimes, counterfeits do not look exactly like the genuine copies that they mimic but are slightly different. A fantasy record or sleeve is one that pretends to be a rare and otherwise unknown item. However, no legitimate record company ever pressed or printed an item like that one.

A pirate copy of a record is a counterfeit that is made while the legitimate record is still selling. These lower quality “knock-offs” are intended to dupe people into buying them at a lower price than the genuine record album would cost. While Vee Jay and Swan (Record Companies) were still producing Beatles records, there was certainly no need for anyone to make “pirate,” “counterfeit,” or “fantasy” records on those labels. However, during the late 1960′s demand arose for Beatles records on those two labels. Counterfeiters filled that void, making counterfeit copies of “Introducing the Beatles” and of the Swan “She Loves You” single. The 1970′s and ’80′s saw even more counterfeits being circulated. Since there were no legitimate copies selling, these counterfeits are — strictly speaking — NOT “pirate” copies, even though they were not being sold as “collectors’ items.”

“She Loves You”/”I’ll Get You” – (Counterfeit) Swan 4152: white label with red print or black label with silver print.

It has been believed for some time that “thin print” copies with quotation marks were reissues available in 1966 and 1967 (just before Swan Records folded in 1967). These rumors are false, for Swan had a contract to release the single for two years and stopped pressing “She Loves You” in 1965. There are two common issues of these fakes: (1) The matrix numbers are stamped into the trail-off by machine. Unlike the genuine Swan issues, the matrix numbers are only 1/16″ high, and neither the “Reco-Art” nor “Virtue Studio” company information appears in the matrix. (2) The matrix numbers are etched by hand, otherwise as above.

The “stamped matrix” fakes have been promoted as reissues. Even though these fakes are almost as common as the ‘black label’ issues and are not genuine, public opinion for years that they were genuine has caused them to sell for $40 to $50 each. The “etched matrix” fakes have been recognized as counterfeits and usually sell for under $10.
Some counterfeit/fantasy copies of the white and red label “She Loves You” were pressed in red vinyl. These tend to sell for about $20, twice as much as the more common black vinyl counterfeits.

“Please Please Me” – “Ask Me Why” – (Fantasy) Vee Jay 498 sleeves: Since the Beatles were complete unknowns in the USA in early 1963, Vee Jay Records never issued a picture sleeve for their first release. Bootleggers have filled the void by producing fantasy sleeves. Each of the above sleeves first appeared after 1980. The first sleeve, shown above, features an early photo of the group. Like the actual single, the sleeve misspells “Beatles,” using two T’s. There are promotional markings on the reverse side, as though the sleeve had accompanied original white/gray label promo copies. In reality, the sleeve came about 20 years too late.

The second sleeve sports four drawings of the Beatles that Vee Jay actually did produce. These are the drawings that appear inside “Songs, Pictures, and Stories”. On this fantasy sleeve, the brackets logo was used, even though Vee Jay hadn’t come up with it in early 1963. The group’s name is also spelled correctly.

“From Me to You” – “Thank You Girl” – (Fantasy) Vee Jay 522 sleeves. As with the above single, there were no original picture sleeves accompanying the Beatles’ second single for Vee Jay. Bootleggers have produced at least two fantasy sleeves for the record. Again, both sleeves are of recent origin. The first sleeve is a pale imitation of the genuine sleeve to Vee Jay 581, with the photograph flipped around. The second sleeve uses the photo from the 1982 re-release of “Love Me Do.” This second-generation picture is blurry.

“Please Please Me” – “From Me to You” -(Counterfeit) Vee Jay 581 sleeves. The first of these sleeves is actually a counterfeit/fantasy item, not intended to fool someone but to simply occupy the missing place of a rare item in someone’s collection. The sleeve is clearly unlike the genuine sleeve, for the group’s name appears here in green (above photo, top) and in red on the original sleeve. The sleeve on the bottom is a different matter! Look at the top (opening) of the sleeve. Genuine copies of the VJ 581 sleeve have the slick cut so that the corners at the top are slightly rounded; copies that have the corners cut square are counterfeits.

Clearly Counterfeit Covers
Let’s first look at some fakes that are clearly identifiable just from the cover:

The cover is ugly and yellowed. The photograph is clearly a second-generation copy. The word “STEREO” is printed on the front cover (since the counterfeiters did not actually own a stereo cover). These fakes date to the late 1960′s.

Below: Here’s another “easy loser.” There are no genuine copies of the LP with a brown border around the album. Most likely, these were semi-fantasy items that were never intended to pass themselves off as genuine. Since they first appeared in the mid-to-late 1970′s, some people have forgotten that they are fakes.

Clearly Counterfeit Labels
The vast majority of counterfeit copies of “Introducing the Beatles” cannot be easily identified by their covers alone. Chances are, though, if it claims to be in stereo and claims to have “Love Me Do” in the titles on the back, it’s a phony. The best test to determine whether your item is genuine is to look at the symbols that are stamped into the matrix of the record. Since this can be difficult — even confusing for some — we’ll take the next best route: to look at the labels.

Above: This is an all black label with large brackets. These were first introduced in the late 1970′s, along with fakes of “Songs, Pictures, and Stories” and “Hear the Beatles Tell All”. The label is of higher quality than some of the “rainbow label” fakes, but since the artist name and title are separated by the spindle hole, it’s a clear fake. Also, during the 1960′s, Vee Jay never released a “large brackets” version of an “all black label.” Finally, these usually come in covers claiming that the record is in stereo; the label does not say “STEREO” — another sign of a counterfeit. Some “all black” counterfeit labels from the same period list “Ask Me Why” and “Please Please Me” — since the counterfeiters did not own copies that had “Love Me Do” and “PS I Love You” on them.

Above: This style counterfeit label was very popular — some copies date back to the 60′s. Notice the thin print on the catalog number. Like the other fakes, the mono catalog number is shown on the label; the bootleggers did not have stereo copies to copy from. That’s why the songs are in mono, too. Here, we see again the telltale sign — that the word “STEREO” is absent, and the title and artist name are separated by the spindle hole. Either one of these is the sign of a fake.

Above: By the late 1970′s, some copies of the same style fake as the one above were being made sloppily. Notice that the label is not the right size. Part of the color band is missing around the label’s edge. Otherwise, it exhibits the same counterfeit characteristics as the label above.

Above: This counterfeit, from the early 1980′s, looks slightly better. The colors in the color band are more realistic. However, the word “STEREO” is still missing, and the cover this record came with claimed it was in stereo. It’s also got the title and artist’s name separated. Another fake.

Above: Here’s another fake, again slightly more professional looking. This one came out during the mid 1980′s. Once again, though, we have a brackets label copy without “STEREO” (and the cover promised us stereo). And even more clearly, the title and artist’s name are separated by the spindle hole in the middle. A disappointing effort.

Above: This counterfeit was color photocopied from a genuine MONO copy of the LP, so the title and artist’s name are in the right place. The colors are strange, but it would fool most people. It came in a “stereo” cover, though, so again something is wrong. Notice that the color green is missing from the label. The record also lists “Please Please Me” and “Ask Me Why,” since that’s the kind of genuine copy that was being photocopied. The label also has a large pressing ring, a kind not found on genuine 1964 releases.

Fast Forward To 2008

Many thanks go to Mr. Frank Daniels for his highly interesting work on different Beatles counterfeits. As he pointed in 2002, counterfeiters were running wild when a buck was to be made. Today, why would you risk buying prescription medicines and “genuine” OEM auto parts that cannot be authenticated as “the real goods”?

If you are a brand owner, it doesn’t cost much to secure packaging and provide consumers with labeling that has “layered” overt and covert anti-counterfeiting protection.

If you are a consumer, we encourage you to ask manufacturers what they are doing to protect you from purchasing counterfeited goods. After all, if there are “hundreds” of Beatles counterfeits, it is logical to assume that there are thousands of chances that you are purchasing “fake”, “illicit”, “diverted”, or “diluted” prescription medications. Fight back. Insist on brand protection.

It’s time to take bold leadership and protect the public. Mark Twain said it best: “Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great, and your ideas have merit.”