10 Things You Need to Know About Brand ProtectionBrand protection is a safeguard against anything — physical, financial or otherwise — that could damage a brand or product’s

Protect Your Brand Against Counterfeiters

10 Things You Need to Know About Brand Protection

Pharma: 1M people are killed annually due to counterfeit medicines. Source: World Health Organization, 2018

Spirits and Premium Drinks: More than 50 people have died in Ukraine after drinking counterfeit alcohol, while more than 100 cases of poisoning have now been registered. Source: State Service for Food Safety and Consumer Protection

Tobacco: Worldwide, it is thought that 6 percent to 8.5 percent of the global cigarette trade is illegal. Source: Independent Minds 2018

AgroChem: Officials Say Illegal Pesticide Caused Deaths Of 13 Bald Eagles In Maryland. Source: U.S. Fish and Wildlife, 2018

Health & Beauty: According to the FBI, counterfeit cosmetics can contain paint thinner, which irritates the eyes, nose, and throat in addition to being flammable and poisonous

Auto: Fake car parts are the 7th cause of fatal accidents in the United States. Source: US Department of Transportation 2018

Companies build brand recognition through quality products and services, distinguishing themselves from the competition. A strong brand is an extremely valuable asset; and it makes sense to protect it. If left vulnerable, a company’s supply chain becomes an easy target for illicit activities like diversion, counterfeiting and tampering, which often leads to public endangerment, costly lawsuits, fraudulent warranty claims and other consequences.

Consumers pay for these distinguished products, and the onus is on manufacturers to not only meet expectations, but confirm products are legitimate. Companies that are proactive about brand protection reap the benefits of such a forward-thinking approach.

This eBook provides valuable insight on what you need to develop a proactive brand protection strategy. We’ve compiled 10 things you need to know about brand protection, and outlined how to engage with an authentication partner to deter the counterfeiters.

You are not alone.

Brand Protection/An Authentix eBook | 2

Brand protection is a safeguard against anything — physical, financial or otherwise — that could damage a brand or product’s reputation, erode customer trust and loyalty, create health risks to consumers, and threaten potential earnings and market share.

It is important to define what brand protection means within your organization. This can be done by putting together a brand protection workgroup that consists of stakeholders within the organization representing key functional areas such as:

- Legal & Regulatory- Loss Prevention- Package engineering- Marketing- Quality Control- Manufacturing- Research & Development- Finance- Supply Chain & Logistics

Once a team has been assembled, a holistic brand protection definition can be defined to help deliver a proper assessment of risk for various products and potential solutions that can be deployed to detect, measure, and mitigate the impact of potential product fraud.

The Definition: What does brand protection mean to your organization?1

Brand Protection for us is more than just protecting a product or a brand, but protecting the patient. While traditionally brand protection is often associated with intellectual property protection, for our business there is no higher priority than patient safety.- Associate Director, Global Product Security from one of the largest pharmaceutical companies worldwide.

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Nothing erodes brand trust faster than disclosure of product falsification, a product recall, patient or consumer harm, or a lawsuit to recover damages. Criminal intervention in the supply chain can be one of the key contributors. Criminals have a sophisticated network of willing players throughout the global supply chain in practically every industry. These profiteers typically target products that are high-value, in high demand, and especially those in lucrative industries such as petroleum, pharmaceuticals, spirits, and agriculture to name a few. Here’s a quick look at some of the tactics used by these criminals:

• Counterfeiting: Dangerous chemicals are often mixed with illegitimate ingredients and presented as authentic.• Diversion: Products are smuggled or diverted to higher-priced markets. In some industries, subsidized products are diverted to non-subsidized areas.• Tampering: Packaging or containers can be refilled or reused with illegitimate ingredients. Also, legitimate products are mislabeled and misrepresent the intended concentration or dosage.

The less visibility and control a brand owner has over their supply chain, the more vulnerable it is to these criminal practices. This is why criminals look for products distributed through complex and disaggregated supply chains, to divert authentic goods elsewhere and substitute them with fake products. Often, premium products and popular brands are targeted where product demand is high and / or rapidly growing.

And, criminals seek out products and industries with limited authentication measures, policies, protocols and inspections. Why? Because supply chains with lax procedures are ripe for counterfeiting and tampering.

The Risks: Basic Tactics of Counterfeiters and Diverters2


An Effective Supply Chain

Applying Mark

Counterfeit Unmarked Product

Inspect at Points of Distribution

Inspect

Intended Retail Store

Unintended Retail Store

Actionable Insights

Brand InsightsPresented

Data TrendsAnalyzed

InstantaneousAuthentication


The impact of these unlawful activities is far-reaching. Criminals are in the business of padding their own pockets, so from a financial perspective, companies lose significant revenue due to lower sales and a decreased profit margin. Also, brand owners struggle to recoup the massive investment made in R&D and marketing to promote the products affected.

Brand equity is severely diminished as well, and companies can be labeled as untrustworthy, or even become associated with inferior quality products. And depending on the industry, consumer safety and health could very well be jeopardized.Legally speaking, companies might face lengthy and pricey lawsuits, as well as fraudulent warranty and liability claims. Plus, counterfeiters don’t pay taxes, nor do they comply with government-mandated regulations and quality standards. Therefore, governments and citizens both lose out because of decreased tax revenue and health hazards.

Criminals involved in these kinds of activities often re-invest in the same practices and / or fund other criminal activities — to keep the vicious cycle going.

Many companies are keenly aware of these subversive activities, and it’s why they look for brand protection partners that have a proven track record and proven solutions to help with this problem.

The Extent: Illicit Trading Has A Broad Reach3

The amount of total counterfeiting globally has reached 1.2 trillion USD in 2017 and is bound to reach 1.82 trillion USD by the year 2020. Source: Research and markets: Global Brand Counterfeiting Report, 2018


Protecting products throughout the entire supply chain is important, but it’s best to be proactive during product development, where proper risk can be assigned, and security features can be applied and incorporated from the very beginning. It also allows multiple stakeholders to be involved on the front end, such as those in packaging, manufacturing, and / or marketing.

Taking a proactive approach says a lot about company leadership. It means they have the foresight to build in an insurance policy of sorts, stay one step ahead of criminals, and be in prime position to protect consumers. Establishing tight controls and creating visibility and the capability to detect problems in a disaggregated supply chain — long before there’s a problem — helps thwart illegal activity, which in turn boosts ROI and sales revenue. This allows companies to focus their efforts on building the brand, protecting their consumers, and turning their attention to proactive corporate objectives rather than playing defense when discovering an issue for public safety.

Before you can confirm something is fake, or not authentic, you have to know what is authentic, and then develop a plan to be able to authenticate quickly when you have a suspect product. You have to resolve questions like who can authenticate, using what method, at what point in the supply chain, and what do they do with the data? - Retired Director of Product Protection for the Global Brand Protection Group of a large pharmaceutical company

The Ideal Approach: A Proactive Strategy4

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With this streamlined approach, brand owners are better positioned to determine the appropriate multi-layered approach that can be employed to their products with the greatest risk profiles.

The Effective Solution: Multi-Layered Brand Protection5Effective brand protection solutions are rarely one-off activities. Counterfeiters’ technology is constantly evolving, so a simple one-dimensional technology won’t do — it actually takes an arsenal of tools to battle the bad actors. That’s why a multi-layered approach is recommended, because it provides a combination of security features that work together to increase the difficulty in duplication and increase the investment required to try and falsify or redirect the product.

An effective multi-layered approach should consist of four comprehensive phases: Design, Mark, Monitor and Measure.

DESIGN the Solution

MARK the Product

MONITOR the Supply Chain

MEASURE the Program Metrics

Develop customized

solution

Select markers and devices

Conduct security assessments of 3rd party sites

Establish KPIs and reviews

Select product security features

Conduct initial marking trials

Obtain physical retains from

manufacturing

Compare orders to forecasts

Tailor AXIS® modules

Establish procedures and

processes

Conduct QC checks on

retains

Compare security volume forecasts to

expected usage rates

Provide training

Benchmark product returns

Investigate suspected activity or anomalies

Provide oversights to refund programs

Provide case files for investigations and

actions Brand Protection/An Authentix eBook | 8

Multi-layered Options• Authentication - Overt – security ink, tamper-evident seals and labels (visible to the naked eye) - Covert – invisible taggants and security inks detected by some sort of device - Forensic – molecular-level markers visible in labs only• Online monitoring• Analysis – data collection and insight• IP and trademark enforcement

The Pharmaceutical Industry: 10% of pharmaceuticals are counterfeit6When manufacturers employ multi-layered brand protection strategies, they can prevent their brand name from being infringed upon and illicit traders from illegally producing and selling products using their logo or trademark. For certain brands and products, brand protection is critical because it is a matter of consumer and patient safety.

Take pharmaceuticals, for example. Criminals can significantly profit on fake pharmaceuticals, through counterfeiting, diverting and tampering with products in the supply chain. Some even set up rogue pharmacies online. According to a 2017 World Health Organization report, 10 percent of pharmaceuticals are counterfeit, which represents a staggering US $200 billion annual business for criminals, a huge financial loss for manufacturers, and most importantly, an incredible health risk to consumers.

The societal impact is devastating as well, as millions of patients die annually from toxic counterfeit pharmaceuticals. And the more fake drugs are consumed, the greater the risk to consumer health and safety. In many cases, doctors have unknowingly administered counterfeit drugs to patients with life threatening illnesses. Given that these fake drugs contain little or no active pharmaceutical ingredient(s), many patients’ lives have been adversely affected due to lack of effective treatment. Often these cases are not reported.

Authentix is trusted by some of the world’s largest global pharmaceutical companies to ensure patient safety and brand integrity. In our experience, any brand protection solution for pharmaceuticals companies should meet the following minimum criteria:

• FDA requirements and other international standards of use, with options for both in-product and on-packaging• Allow companies to assess exceptions and suspect product at multiple points in the supply chain• Ability to measure or quantify the total potential impact of any adverse event quickly through additional inspections and inquiries• Establish a proactive program review and continually allow for adjustments, which includes actionable insights through data collection and interpretation


The Government Impact: Brand Protection Can Effect Government Funding7According to a 2018 global study by Euromonitor International, 25.8 percent of alcohol consumed within 24 different countries is illicit. This amounts to over US$3.6 billion in fiscal losses, to brand owners, due to illegitimate alcohol sales in these coun-tries studied, which include Africa, Eastern Europe and Latin America.

Counterfeit pesticides take a significant toll on the EU’s industry, tax revenues, and employment levels, as stated in a report published by EU Intellectual Property Office. They estimate that legitimate industry loses about €1.3 billion of revenue annually due to counterfeit pesticides, while the direct impact on employment is also significant.

Particularly, the survey notes that thousands of jobs are lost in the EU and taking wider implications in account, total lost jobs could be tens of thousands.

These statistics demonstrate that criminals study these supply chains intimately to find areas of opportunity to exploit. These nefarious operators keep track of which countries legislate and enforce criminal penalties for counterfeiting. Moreover, in some countries, the penalties aren’t severe enough to act as deterrents. Besides, consumers are relatively unaware that they are purchasing counterfeit goods unless and until an adverse event occurs.


Spirits Case StudyAuthentix successfully deployed a multi-layered solution for a Spirits operation owned by the government in Columbia.

Results:25% increase in sales52M Liters markedSee how at www.authentix.com/spirits

https://authentix.com/brand-owners/commercial-consumer-goods-protection/wine-spirits-brand-owner/

The Integration with Manufacturing: Brand Protection Should Be Seamless8When manufacturers need a brand protection partner, they should select one that uses technology, which integrates seamlessly into existing product line production and/or printing methods. Otherwise, implementation becomes a long and potentially expensive process with risk of delays or complete failure.

What to look for in a partner when implementing an easy-to-use solution:

Quality Control process - Train/collaborate on QC measures - Application and process of ink - Implementation of inks applied correctly for accurate security reading on printed packaging

Industry Experience


Minimal disruption to your current operations

Understand entire supply chain process including lifecycle implications - Assist in understanding and quickly updating supply chain to bring inks in - Validate the order process, how long it takes for ink delivery, from one location, etc.

Authentix Experience• Certified over 75+ global printers• Implemented over 150 security ink programs

The Data: Drives Brand Protection9Data is a crucial element in the fight against criminal activity in the supply chain. In fact, it is the lifeblood.

The responsibility of managing the complex supply and distribution chain falls on multiple stakeholders within a commercial brand. The value added through a reliable flow of accurate and timely data provides actionable insight for these stakeholders to measure and reconcile information quickly and enforce, react and remediate illicit activities. Manufacturers can use data analytics to quickly detect the introduction of illicit products in the supply chain. And through fast enforcement action, increase revenue and provide effective means of remediation in a programmatic, ongoing fashion.

Enhance your brand protection.Having the right data at the right time will help you manage better reaction times, faster diagnosis of issues, and to better understand which corrective actions are more effective than others.

Authentix offers the AXIS® Brand Protection technology to collect, store, and analyze data to help our clients make informed decisions based on changing needs. AXIS® is a secure, comprehensive, cloud-based end-to-end data platform designed to deliver a complete picture of your authentication efforts and results. It also provides actionable insights and helps identify counterfeit hotspots as evidence for responsive enforcement action.


Authentix has a simple ideology about the data process that all leads to the best possible outcome for clients: Collect it. Store it. Organize it. Report it.

COLLECT IT

STORE IT

ORGANIZE IT

REPORT IT

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The Program Process: Brand Protection Is Ongoing10Criminals will always try and find the best scenarios to disrupt the supply chain, pad their pockets and take money away from its rightful owners without regard to consumers health or wellbeing. That’s why brand protection must remain an ongoing process within every organization.

Authentix Understands Brand Protection Business Needs Authentix is always thinking, refining, studying, and working on the latest technologies to develop the best brand protection solutions to help keep illicit activity manageable and minimize the damage. It’s also why Authentix doesn’t adhere to the status quo: Good enough will never be good enough for us.

Providing award winning solutions to our clients for more than 25 years, we have secured billions of products across the globe. With hundreds of implementations executed, we have become very proficient in assessing brand protection needs and delivering multi-layered brand protection solutions, leveraging security inks, certified printing technologies, tamper-evident seals and labels, digital authentication and hand-held detectors.

Authentix brand protection solutions can be seamlessly integrated into existing manufacturing lines with pharmaceuticals, spirits and premium drinks, tobacco, agrochemical, health and beauty, and many fast-moving consumer goods.

Authentix is the authority in authentication solutions. Working with governments, central banks and commercial businesses, we ensure local economies grow, banknote security remains intact and commercial products have robust market opportunities. Learn more about our authentication solutions authentix.com.


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10 Things You Need to Know About Brand ProtectionBrand protection is a safeguard against anything — physical, financial or otherwise — that could damage a brand or product’s

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