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Because they fit easily into most existing production processes, security inks are among the most popular brand protection techniques available. But what are the latest innovations to keep counterfeiters guessing, and why do traditional ink suppliers want a piece of the market?

The ink pot

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hen Flint Ink and Sun Chemical decide to reach beyond their traditional established printing ink businesses and enter the small but highly specialised world of security inks, you find yourself asking why? After all, brand owners are a reticent bunch when it comes to accepting the counterfeiting issue and doing something about it.

Tagging is a covert technology that can be used to underpin any brand protection strategy. Particle tag systems can be included in ink, as well as paper, laminates and labels. Another type of technology known as infrared (IR) up-converting taggants uses a small amount of up-conversion inorganic phosphors that can be added to most inks and materials. Although DNA taggants have been around for a while, interest in them has really grown in the last couple of years and so has the number of companies supplying DNA taggants. The main practice is to mix or attach specially processed DNA to specific media, such as paint, ink, polymer or adhesive and use the unique and hard to replicate characteristics of DNA to tell real products from counterfeits.

A cheap solution
Within the security device and brand protection industry, security inks are one of the oldest and most widely used anticounterfeiting techniques. They are easy to apply and comparatively cheap to buy. But care must be taken to ensure their ease of use does not mean that they are easy for a counterfeiter to copy or appropriate. For example, UV inks will assist in defeating efforts to copy packaging or documentation by scanning. These inks are easy to detect but can be bought from numerous ink suppliers, not just makers of security inks. Fluorescent inks on their own offer little security in the face of determined counterfeiters but can form part of a package of brand protection and security features.

Specialist security ink suppliers Calyx

Calyx in the US supplies overt and covert inks for protecting brands, from optically variable pigments to infrared up-converting and fluorescing inks. The inks are combined to provide multi-layered anti-counterfeiting solutions to pharmaceutical companies, Calyxs main client base. In July 2003 Isotag a brand protection company in Dallas that has developed a unique molecular marker technology that can be tracked online announced it had acquired Calyx. Scientists at the newly united business venture are creating a hybrid ink that incorporates Isotags forensic technology into

The benefit of versatility

As well as acting as overt brand protection measures, inks also provide a good base that hidden or covert security technologies such as DNA markers and taggants can be integrated into. These can usually then in turn be printed onto packaging in existing production processes.

... inks are one of the oldest and most widely used anti-counterfeiting techniques. They are easy to apply and comparatively cheap to buy ...

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Calyxs dyes. As well as offering overt and covert authentication features the new ink will allow a item to be traced along the supply chain. The information gathered from the ability to track and trace a product could prove invaluable for drugs companies because they can isolate where copies of their products are entering the supply chain and where diversion is taking place. Calyxs existing range of security inks add a few extra cents to the cost of production per pack, which can increase depending on the complexity of the solution. The new ink containing Isotags technology should not add to the cost because the amount of molecular marker solution used is tiny. However like other DNA techniques they are totally invisible to the naked eye and cannot even be picked up by a reader in the field. They do not provide immediate yes or no authentication, but have to be forensically tested in Isotags laboratory. Depending on the type of covert technology used, readers in the brand protection industry in general can range from a few hundred to a few thousand dollars. Isotag scientist Dave Wallace is confident the new ink with the molecular markers will be virtually impossible to copy. By adding covert feature after covert feature to the ink you are making it very hard for counterfeiters to replicate. But Wallace concedes that for brand protection technologies to work best they must be applied at item level, or close enough to that level. Isotags ultimate goal is to deliver an ink or dye that can be printed onto the product or suspended in a liquid. If the pack of medication leads directly to the consumer then a brand protection device applied to the package is fine says Wallace. But, in the US especially, a lot of medication is produced, packed and distributed in bulk to pharmacists. In these instances item-level brand protection is desirable. However this is still years off for the company, which is only in the early stages of research and development for such a solution. Why does Wallace think security inks are so appealing? Inks can be used in almost any existing manufacturing process. The
Table 1 Forecast growth of security ink market, 200205, % Region Western Europe Eastern Europe Asia Africa North America South America Total worldwide growth Source: Pira International Ltd 200203 7.1 6.9 10.2 9.3 7.4 8.6 8.1 200205 10.9 10.6 15.5 11.6 11.9 9.4 11.4

companys optically variable pigments are compatible with flexographic, gravure and offset printers. Its UV-curable pigments can be applied by rotary screen. The inks can also be incorporated into tamper-evident labels and the covert dyes can be mixed into existing colours used by Isotag and Calyxs clients. They or their printer dont have to redesign their packs in order to include our technology, says Wallace.

Flex Products
Flex Products in California makes optically variable pigments that are added to paints, inks and coatings. Objects coated or painted with these pigments change colour according to the angle from which they are viewed. This colour variation cannot be replicated via any scanner nor by any printing technique other than by the use of optically variable inks or pigments but they provide instant visual authentication. The pigments are sold to authorised ink, coatings and paint manufacturers and are used on many products, from mobile phones to cars. Isotag has a partnership with Flex Products. The two companies are working with a global pharmaceutical company to stop the counterfeiting of one of its drugs products. Heres the background to the case and their solution: The prescription drug business for this pharmaceutical manufacturer exceeds $17 billion (14.2 billion) annually. Around $10 billion of those revenues are made in the US alone. The companys top selling drug generates more than $3 billion every year and each of the other 23 drugs it produces rake in more than $100 million each.

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Counterfeit versions of the companys best selling drug were discovered in the US. FDA guidelines threatened to recall the drug, valued at over $1 billion, throughout the distribution pipeline unless consumers could in future tell it apart from fakes. The company had to repackage its drug with layered security or face loss of revenue and potential negative effects on consumers due to shortage of the product. The drugs company was also concerned that any potential damage to its top seller would put all its other brands at risk. The manufacturer did not have a product security system in place and needed an FDAapproved solution immediately. For an overt security layer Flex Products provided its colour-shifting pigment to be used with inks printed on the packaging. Machine-readable inks were also printed on the packaging as a covert measure. These could be read in the field to authenticate packages. Isotags proprietary molecular marker technology was also applied to the packs as a third covert measure. The markers cant be verified in the field, only back at Isotags laboratories. The whole brand protection package took the FDA less than four weeks to approve. The drugs in the pipeline were then released for sale and a product recall was avoided. Isotags and Flex Products solution is now being applied to other high-value drugs within pharmaceutical companys portfolio.

Bsecure
Israeli brand protection company Bsecure has developed a new ink and system for authenticating and tracking branded goods. The SecuVision technology consists of invisible ink that gives a product, or its label and packaging, a unique identity. The ink can only be read with a special reader developed by Bsecure. The dye itself costs a fraction of a cent to apply to each item. Brand owners can store each unique ID created by the ink onto a database to track items in the supply chain. Authorised operators can enter onto the database the exact location, time and date at which they verified a products authenticity

Table 2 Profile of latest security inks available Inks types Optically variable inks Overt or covert Overt Current features Colour changes when viewed at different angles Colour changes above a set temperature Absorb IR energy but not visible to eye Trace additions of invisible tags. Very versatile Contain components that are only detectable by equipment Allow electrically conductive tracks to be printed Produce very thick films that can be felt Change colour in UV or strong sunlight Key drivers Readily seen by public Inhibiting factors Can be very expensive. No litho ink yet Limited in some climates Requires detection equipment Wider range of taggants introduced More costly than is often acceptable Development work has yet to be completed Limited choice of suppliers More dedicated ink/detector combinations Greater conductivity UV litho & flexo Future developments Improved printability. Litho grades introduced

Thermochromic inks

Overt/covert

Infrared up-converting inks

Covert

Tagged inks

Covert

Machine-readable inks

Covert

Cannot be detected by graphic scanners Undetectable without correct equipment Permit automatic identification

Conductive inks

Covert

Intaglio inks

Overt

Potentially allow less costly circuits to be produced Few producers of intaglio print improves security

Photochromic inks

Overt/covert

Source: Pira International Ltd

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Table 3 Security inks: progression of the market for brand protection in pharmaceuticals, 20022005 (%) 20022003 8.6 10.0 20022005 10.2 11.0 Overall market Security inks Source: Pira International Ltd

so that they can isolate where the product is being diverted, counterfeited or stolen. Bsecure is in talks with multinationals in the pharmaceutical, tobacco and cosmetics industries that are interested in using the technology. The company hopes to release more details about these negotiations in the near future. A label or substrate printed with the special ink looks normal. When it is viewed through the reader a pattern becomes visible that can be used to verify the product. According to Bsecures chief executive officer Ron Peer, integrating the ink into a product logo would produce the best results because counterfeiters would literally have to remove the logo in order to get rid of the ink.

manganese violet pigments, used in inks across substrates and products, including plastics, rubber, cosmetics, paints, artists colours and printing inks. An integral feature of some of Hollidays pigments is that they cannot be copied, so when mixed into ink and printed they give a low level of visible brand protection. The company is marketing this aspect of the pigments to two groups in the supply chain: ink suppliers and packaging designers. A kilogram of the pigment costs around $14. Of course the pigment could get into the hands of counterfeiters but Hollidays ink technologist Aaron Marshall says, as a precaution, the company will only discuss its products with the major manufacturers of both traditional and security inks such as Sicpa, Flint Ink, Dainippon and BASF. Our pigments will put off the opportunist, the man on the street, says Marshall. Marshall and his colleagues have already discussed the possibility of combining their unique pigments with covert technologies to produce inks that can fluoresce when exposed to ultraviolet light. However, Holliday will wait and see how much interest the market will show in this idea. There is a company in mind it would like to work with but Marshall is reluctant to reveal details until they have actually approached it. He agrees with Wallace at Isotag that the reason why inks are such a widely used security measure, compared with other devices, is because they fit into existing printing processes. Inks can give a pretty good idea almost straight away as to whether a product is genuine or not and they can be combined with other technologies to provide a covert level of detection and a history of where the product has travelled along the supply chain.

Mainstream providers of ink

Traditional ink and pigment suppliers like Flint Ink, Sun Chemical and Holliday have all cottoned on to the appeal of security inks. In the past 18 months they have bought into security ink businesses, or are setting up alliances with providers of brand protection techniques or have launched their own security products. And it makes sense. The general printing ink market is highly competitive and has a surplus of production capacity. The result is that prices are kept very low by the competitive pricing of ink makers and general profitability is lower than most other industries would accept. There are potentially greater profit margins in the security ink sector because it adds more value and is less commoditised. These traditional printing inks companies have distribution channels in place and long established relationships with clients in the printing, converting and publishing industries.

Holliday Pigments
Holliday Pigments in the UK is the worlds largest producer of ultramarine blue and

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Figure 1 Pharmaceutical industry views on the adoption rates of security products by type, 20022005 (%) Source: Pira International
Tamper-evident seals Digital watermarks Security graphics In-product marking Magnetic technologies EAS Bar codes Taggants Security films Security threads Security papers Security inks Holograms RFID tags Security labels Security packaging overall 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Speed up a lot

Speed up a little

No change

Sun Chemical
In June this year Sun Chemical, the worlds largest ink supplier, announced a marketing alliance with InkSure, a specialist in encoded inks that can only be read by specially developed machines. Sun Chemical wants to use its extensive client base as leverage for the security inks developed by InkSure. Other security inks, coatings and brand protection technology suppliers are also in Sun Chemicals radar, though it is still early days for the company to give away any names yet. The ink suppliers strategy is to build up a battery of security and brand protection techniques through license agreements with security specialists and acquisitions. Flint Inks plan is pretty much the same, but the company wants to provide the whole service, not just an exhaustive list of security inks and devices. Sun Chemicals security and brand protection director Pat Polazzo predicts that in the coming years there will be consolidation between the traditional ink suppliers and boutiques and specialists offering security and brand protection technologies. Brand owners and their packaging converters arent up to speed with the numerous

technology start-ups offering DNA markers, taggants and other ingenious ways to authenticate and track goods. If such a company licenses their technology or distributes it through an ink or coating supplied by a Sun Chemical or a Flint Ink they have a better chance of it reaching end-users. InkSures chief executive officer of US operations, James Assaf, thinks converting has become so competitive that packaging companies will print or integrate security devices on or in packaging as part of a onestop-shop service to brand owners. Alcan has started with holograms. The converter is licensing a machine that can apply, in-register onto flexible packaging, transparent holograms for applications such as CD packaging. Alcan intends to grow its range of secure packaging, which will include security inks. Sun Chemical is now in talks with a tobacco company that owns one of the largest cigarette brands in the US and its packaging converter about testing covert inks in the SunSure range on cigarette packs. Polazzo says the company will also target other markets including cosmetics, spirits, wines and pharmaceuticals.

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Whats so good about inks?
Technology suppliers have to convince brand owners that their products are value for money. In Piras research, minimum cost was cited as the most important factor behind the choice of a particular brand protection device. Although security inks and also papers are more expensive than their standard counterparts, they are not generally regarded as unacceptably high in cost. Security inks can be overt and covert, both equally important levels of security to have on packaging or products for different reasons. Overt security, such as colour-changing inks, watermarks and holograms offer consumers the opportunity to decide for themselves whether a product is genuine. This in turn is good for the brand owner. It enhances the brand and adds value to it. You or I will buy Microsoft software because we know its the genuine article. Its a two-way thing, brand name and brand protection measure reinforce each other. Overt protection also serves to put off have-a-go counterfeiters from copying the product. But the more serious counterfeiters will try and copy the overt device, so by incorporating one, two, three, even four types of covert technology a brand owner will completely scupper any chances of its product being copied. Many of these covert technologies such as Isotags molecular markers, the MagDot technology sold by Light Impressions in the UK and Bsecures invisible coding technology are incorporated into inks. Most of them can be applied on existing printing processes, so all the converter is paying for is the ink and readers, not say an entire new machine or piece of equipment for applying another security device. The biggest growth areas in the security inks market will be in optically variable inks, thermochromic inks, infrared up-converting inks, tagged inks and machine-readable inks. Security inks will continue to remain one of the biggest brand protection techniques, perhaps being eclipsed in the coming years by radio frequency identification (RFID) devices as their cost comes down. They will become extremely popular in Asia-Pacific, over the coming years

TAKE AWAY
Security inks are one of the oldest and most widely used anti-counterfeiting techniques, easy to apply and comparatively cheap to buy Ink, as well as serving as an overt brand protection measure, also provides a good base that hidden or covert security technologies, such as taggants, can be added to In the US, Calyx, a supplier of overt and covert security inks, has been bought by Isotag, the company behind a unique molecular marker technology. The new company is developing new ink solutions that combine Calyxs and Isotags technologies Isotag and Flex Products, a supplier of optically variable pigments, teamed up to supply a combined package of overt and covert security. This was to help a leading drugs company save its best-selling brand which was under attack from counterfeiters Bsecure in Israel recently launched a new invisible ink that marks each product with a unique identity that can only be detected with a special reader The worlds biggest suppliers of traditional inks, such as Sun Chemical, are getting into security inks partly because these specialised products offer better profit margins. The packaging printing and converting industry, therefore, becomes more competitive The security ink industry will continue to consolidate as the big traditional ink players acquire or absorb technology suppliers into their operations Security inks will remain a popular choice of brand protection because they are relatively cheap to apply, compared with other security measures and are very versatile By incorporating a number of different types of covert technology a brand owner will completely deny any possibility of its product being counterfeited Much of the growth in the security ink market will happen in Asia-Pacific over the next few years.

Sara Ver-Bruggen
Sara Ver-Bruggen is the editor of ActiveIntelligent News, Piras fortnightly newsletter. For subscription information, or a free trial, please contact: publications@pira.co.uk

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