FIGHTING FAKES WITH TECHNOLOGY
Byline: Rosemary Feitelberg
NEW YORK — The story about the guy who sold hundreds of tickets for the same seat at the Super Bowl wasn’t a joke and is symbolic of an endemic problem.
Counterfeiting has long plagued major sporting events and athletic companies, and advancements in digital technology have intensified the problem.
U.S. customs officials seized $4.3 million worth of counterfeit apparel during fiscal year 2000, which ended Oct. 1, according to the International Anti-Counterfeiting Coalition, a Washington, D.C.-based company that helps manufacturers and retailers battle the illegal activity. Hong Kong was the primary source of origin of the fake goods, accounting for 10 percent of the counterfeit apparel obtained by the federal government.
Knocking off designs is easier and more accurate now because of digital photography. The cost is also declining, with more copycats using personal computers. Counterfeiters can now buy a scanner and a color printer for about $300 and set up shop in their homes.
Digimarc, a Portland, Ore.-based company that specializes in watermarking, an invisible pattern that is read by computers, is stepping up its efforts and is reaching out to the athletic set. Activewear and athletic shoes are routinely knocked off, due to their international appeal with consumers and their relatively basic designs.
Scott Carr, vice president and general manager of secure documents for Digimarc, said: “There’s a lot more imaging being done in homes with digital photography. The technology is easier to use and cheaper, and the reproductions are of better quality.”
More and more counterfeiters are now using these tools to make packaging that fools retailers and custom officials alike.
In addition, many athletic companies use the same factories overseas to produce their goods, and “security isn’t all that strict,” as a Nike spokesman said.
“It’s a huge issue for all companies,” he said. “How do you protect your ideas.”
Digimarc uses holograms and watermarking on hang tags, labels and packages for secure identification. Unlike security threads, another anticounterfeiting precaution that requires weaving a metallic thread into printed material, watermarking is a computerized image read by scanners or Web cameras. Watermarking is also harder to reproduce than security threads, Carr said.
By passing a watermarked hang tag or label a few inches away from a Web cam or scanner, officials or stores can determine whether the product is authentic.
The investment per item ranges from pennies to a dollar, depending on how expansive the packaging is, Carr said.
Watermarking can also be used to help manufacturers offset diversion problems, since distributors can scan the shipment to assure its headed to the proper destination. Athletic firms are taking a closer look at their diversion losses, which often result in depressed retail prices, lost revenue and unhappy buyers, Carr said.
“Our focus enables people involved with the inspection and law enforcement process to use these features. People in the distribution channel can also use them to be sure goods are going where they should be going and are genuine,” Carr said. “If that’s not the case, the goods can be held to pursue counterfeiters.”
Digimarc also has teamed with Pitney Bowes to develop watermarking for sports events tickets and trading cards to prove their authenticity and provide additional information. Consumers, headed to a baseball game, can wave their ticket in front of a Web cam to find out things such as where their seats are located in the stadium, stats about the team and the players or to check out parking in the area.
Digimarc is also courting activewear manufacturers to use watermarking in their apparel catalogs. That can be used to link shoppers to the brand’s Web site, to get more product information about the item they are interested in or to check out streaming video that shows the merchandise in action, said John Fread, a former Adidas executive who now works at Digimarc.
The technology also can be used in stores by setting up computer kiosks. Shoppers can scan watermarked images to check out the retailer’s Web site or to play a video on a wall scene.
Digimarc’s strategy is in line with the push by sporting goods firms to fine-tune integrated marketing programs that encompass print, outdoor and online efforts. By using watermark-activated videos in stores, athletic specialty chains and sporting goods stores could offer clinics in their stores, Fread said.
“They’re all talking about controlling their messages,” he said. “You would think they would need something like this if they want to do a complete campaign,”