Paul Vitale from VerifyMe, discusses how to counteract counterfeit and protect your brand.
Carl Lewis: Welcome to The Connected Enterprise podcast. I’m Carl Lewis, your host from Vision33, and I have an announcement: This podcast will be posted on visual channels in addition to the usual podcast places, so please check us out on YouTube. My guest is Paul Vitale from VerifyMe, and he has amazing technology to share. Paul, welcome to the podcast. Please tell us about yourself and VerifyMe.
Paul Vitale: Thanks for having me, Carl. My name's Paul Vitale. I'm based in Zug, a small town in Switzerland near Zurich. I've worked with VerifyMe for just over a year as their VP of business development for EMEA and the Asia-Pacific region. VerifyMe is based out of Rochester, New York, and, although it’s been around for a while, has just recently seen the technology develop with the RainbowSecure invisible ink they manufactured. And by partnering with organizations like HP Indigo, we can put these invisible IR pigments and inks on digital presses. We also partner with ink manufacturers such as INX International, the third-largest ink manufacturer on the planet, which enables us to create solutions for other types of security printing for brand protection and customer engagement.
Carl Lewis: That’s the key – brand protection. By the way, I looked up where you live. You’re lucky; Zug is a beautiful place.
Paul Vitale: It is. We're fortunate.
Carl Lewis: Paul, brand protection came about because many people steal brands and pass them off as their own. How big of a global problem is that?
Paul Vitale: The latest statistics indicate that it's the sixth-largest economy on the planet. Over $2.8 trillion worth of goods will be sold in the counterfeit market in 2021. The counterfeiters are getting better because they’re more sophisticated and better equipped. And the onset of digital allowed them to create new methodologies, whether that's printing products or sealing containers again. It's harder to detect and combat, so many of us are trying to develop new ideas and approaches to prevent it.
One interesting statistic is that a brand’s biggest competitor is its own counterfeit. And if that's running at 20% to 30%, it will affect your business. For the bigger brands, it’s lots of money and huge volumes at stake. Smaller brands could be ruined by counterfeiters producing faulty products and creating a bad name on social media. It's a real problem.
Carl Lewis: And a problem for consumers, too. How do you know what you're purchasing is the actual thing you want to purchase?
Paul Vitale: Absolutely. Especially if you're putting it on or in your body, you must make sure it’s a genuine product. Cosmetics, creams, and makeup have had horrendous results with counterfeit products. Over a million people die every year from counterfeit pharmaceutical products. And counterfeiting is rampant in the food and beverage industry.
Carl Lewis: Yes. And the thieves are very opportunistic. We even have people doing it with the vaccines now. Desperate people will do lots of things when they think they have a shortcut.
Paul Vitale: We're working with a PPE company. The product is gloves, so it’s essential that they’re genuine. We did a proof of concept with two million packs of the gloves. The company wants to make sure the package is delivered to the right person, the right organization, and the right area at the right time. Still sealed. We can create a tamper-evident label that will void if it's removed or if counterfeiters take the product art and use it to sell a fake product.
It's just you're not capable of doing it. If you're using a variable unique QR code on that tamper-evident label, you’ll land flag up quickly if the code is scanned too often. Or if the code is copied and in the wrong region or country, it will scan quickly and trigger the platform that there's something wrong. We can change the messaging received and shut it down, but it’s a problem.
Carl Lewis: What's the technology VerifyMe has created to help people track their products better?
Paul Vitale: We're a one-stop shop with a four-tiered approach. The first thing is our online monitoring capability. We know where certain products are meant to be sold and which websites are authorized to sell them on which marketplaces, and we can do a survey to analyze and monitor websites and domains selling a brand's product. Any anomalies would trigger alerts, and we would work with the brand to close those sites down quickly. That gives us a landscape analysis of a brand or range of products, and then we can say, "Let's start doing something physical with the product. We've gone from the digital side; let's move into the physical side."
First, we’d look at the serialization on that product. If they have nothing or aren’t using something consumers can engage with, we’d recommend a variable, unique QR code or dot matrix code for that product. It would either go onto the label or be printed directly onto the product with continuous inkjet presses. If they're using a label, we can use digital presses like the HP Indigo to print a digital label in a single pass that would have an overt, visible, unique QR code. That’s the second stage.
We have the overt QR code we can scan along the production cycle, from manufacturing to distribution to retail. It's a full track and trace capability with a digital code consumers can scan to find out about the product. If that code is scanned in the wrong area, or too often, it triggers an alert. Brands get control and protection with that code.
Carl Lewis: If I see that label in a country where that product isn’t supposed to be, it will trigger an alert?
Paul Vitale: Yes. The message you’ll receive is that the product cannot be verified. And because it's geolocated, it will be on a regional basis – a case of because it’s in the wrong region, it's been diverted or counterfeited and cannot be verified. You’d be asked to please refer to your retail store or wherever you purchased the product. If a code were scanned too often, we'd lock it down completely. This is a counterfeit product, do not use this product, etc. We can change the messaging. If products get stolen, we change the messaging on that batch of codes. If the brand knows a range of codes has been diverted, we can take preemptive action before they get to retail stores.
Carl Lewis: That's protection for the consumer but also the manufacturer because they find out someone is doing something nefarious with their product.
Paul Vitale: Yes. And besides the anti-counterfeit measure, you also have a customer engagement measure that if it’s in the right place and the scanner is correct, you can communicate with the consumer in a new way. When they scan the product, they can get a product history. You have a full traceability record. Then you could offer where to buy the next product. Or other products within the range, certificates of analysis for cannabis products, the ingredients of a cosmetic product, or allergic reactions.
You could also ask for feedback. "Do you like the product? Would you like to try our other products within the range?" You can get a two-way communication going with the customer. Right now, after a consumer buys your product, they're out the door, and you don't know who they are, their relationship with the product, or their experience. Our method offers more than a layer of protection – it also offers customer engagement that works well for brands.
Carl Lewis: That's a visible code, like the QR codes you see everywhere. But you also have an invisible code you can print on a label. What's its purpose?
Paul Vitale: This is where it gets exciting. Suppose you have an authentication problem and you want a higher level of security. We can put invisible marks on the product or the label so inspectors or people at the distribution level can check if the products they're receiving are genuine. We have our own specialist pigment called RainbowSecure. It's an IR pigment, so it's on the infrared spectrum. With our partners, like HP Indigo for digital presses, we create an invisible ink that sits seamlessly into the HP Indigo presses. We also work with INX International and develop colored inks for other types of traditional presses where you could lay the invisible marks on aluminum substrate or plastics. We have a range of services. The important thing is that IR and our products are hard to copy. The IR spectrum is unique, and we develop the pigment to fluoresce at a certain wavelength and frequency that’s only detectable with our VerifyMe VeriPAS detectors. Also, the supply chain is highly controlled. It’s just a standard label in the top corner of this yellow block. It’s invisible to the naked eye. And if we scan with one of our beepers, nothing happens.
Those watching this podcast can see that as we move over the yellow corner, it detects rapidly and nowhere else on the label. That would be the same on a product. We're indicating a static mark. We've laid invisible ink there. It could be a spot color where we put the color within, for example, a logo, or it could be this yellow spot color at the top of the label. Then we get the chemistry of that ink and create the same ink, except with our IR RainbowSecure pigment. Then it will fluoresce at a certain frequency that’s detectable by our beeper.
It's a quick test for pure authentication where you have a mark and need a rapid response. What we like about this beeper is its Bluetooth capability. It will link with the app and geolocate, so if brands have inspectors out in the field, they’ll know where those inspectors are inspecting products. They'll select which product they’re testing from a drop-down menu, and it will geolocate, date, and timestamp that inspection. It's easy to open a case, quickly scan, and detect if it's a genuine product.
Carl Lewis: So, you need some inside information to know where the invisible marker is.
Paul Vitale: Yes. And we work with the brands to make sure that's predetermined. It's an easy way to put a static mark down. And then the crème de la crème of laying down this invisible ink and pigment is that rather than just a static mark, we can put a hidden QR code in the corner. We can hide all that track and trace intelligence within a code – whether it’s a serial number, a barcode, dot matrix, or a QR code – then use one of our authenticators to scan the code and interpret the data. That’s one of our unique solutions.
And the technology shows the inspector where the code is on the product so they can make the scan, record the information, and learn exactly where that product came from, where it was being shipped, where it should be, and any other parameters you want to hide within the intelligence on that code. But it can only be detected, interpreted, and given back to the brand using our authenticator. It’s mostly for larger brands with a diversion problem – products ending up in the wrong region or country, and they have no idea where they’re coming from. This is a way of interpreting the data and preventing the diversions.
Carl Lewis: It's fascinating. And it appeals to me as a consumer that I would have a way of verifying something is the genuine article. Especially, as you said, if it's something I’m putting on or in my body, or that I paid a lot for. I don't want a knock-off! But for the companies investing in manufacturing these products, controlling their inventory to that degree, knowing when someone is trying to take advantage of them, and reducing theft, it’s priceless. That lost revenue number is an amazing figure.
Paul Vitale: It’s alarming. We're working with several large drink manufacturers – hundreds of millions of dollars of revenue each year – and they have between an 8%-10% issue with counterfeits on a whiskey bottle. We’re working with them to prevent that.
Carl Lewis: Do companies report this to law enforcement?
Paul Vitale: Absolutely. And with the online brand protection elements, we provide information they can give the authorities to close sites down. We're working with the Anti-Counterfeit Group (ACG) in the UK, which also covers Europe. The information we gather with the ACG helps brands take the counterfeiters to court and get businesses closed. Trade agencies can do raids on-premises if counterfeits are discovered.
Carl Lewis: That sounds amazing. Do your customers see results with this technology?
Paul Vitale: Yes. And we're building partnerships. Although we're based in Rochester, NY, we’re expanding across Europe, the Middle East, and Africa. We have partners in Pakistan, India, Malaysia, China, and the UK. We’re creating an impact across the globe. The new partnerships and technology we consistently develop let us address this global problem on a wider scale. We're financially strong, which helps. We work with brands to do proofs of concept and pilots where we can share the burden. There's no significant capital expense from the brands to try the product and develop a solution.
This tiered approach means we don't just pull it off the shelf and say, "You're going from 0 to 100mph in a few weeks." It's a gradual process. We determine where the problems are, how best to attack them, and take it stage by stage. That enables us to build long-term relationships with brands to reduce the counterfeit and brand protection issues.
Carl Lewis: A few weeks ago, you showed me that when someone scans a product, it's instantly geolocated and plotted on a map, so as the product creator, you can see the product distribution. And that was one of the fastest ways to determine, "I don't know why that's there. We don't have distributors in India; how did it get there?" Things like that make it easy for product creators to know if their products are under control.
Paul Vitale: I can show that to your visual folks.
Carl Lewis: That would be great. And we'll talk it through for listeners.
Paul Vitale: Great. First, I’ll show you the customer engagement piece. Here’s the code on the screen. It would be a label on a product, and I would scan it. It's a genuine product, but it's a demo code.
Carl Lewis: You can do it with your phone's camera?
Paul Vitale: Any standard QR reader. Now, I'm into the product. When I confirm, it checks through the cloud that the code is genuine, in the right place, and not being scanned too often. It confirmed the product is genuine, so we're good to go. Then, I go on a journey on the phone and look at the range of products and certificates of analysis. I could link to videos. I can take the customer out. I could ask the customer questions. And there’s a full inventory of the range of products I’m selling, its ingredients, history, and provenance. It's a powerful tool for brands to use the code for customer engagement.
Carl Lewis: I can see that. And easy, right?
Paul Vitale: Yes. And what I would do now, Carl, is show you the results on the screen from the laptop, but I can’t. I can show you the invisible code scanning, though. I'll go back to the app and launch the VeriPAS app. Then I'll place this onto the authenticator.
Carl Lewis: I can see it connecting.
Paul Vitale: Let’s say I’m an inspector in the field. I’ll test the product. The first thing I do with the label I showed you earlier is select which product it is by scanning the overt code. It checks through the cloud that the code is good, in the right place, and not being scanned too often. It's now asking me to scan the invisible code, and the software tells me where the invisible code is hidden on the label or product.
Carl Lewis: It comes right up for you and shows you where the invisible code is on the label.
Paul Vitale: Yes. Now I hover over where the code is. You can see that as I block out the ambient light, the infrared code appears. And when we scan it, we see that it’s a verified product.
Carl Lewis: And it's a QR code, but with that special invisible ink.
Paul Vitale: Ink that’s laid down with the invisible IR ink, yes.
Carl Lewis: It's two layers of security. That’s cool.
Paul Vitale: That's right. That double layer of security and using an authenticator to scan the visible and invisible code is unique. We have the global patent on that at VerifyMe.
Carl Lewis: That's powerful.
Paul Vitale: Now I’m opening the dashboard.
Carl Lewis: If you're listening on audio, we're opening the application on Paul's side. We’ll do our best to describe it to you like we did with the phone solution. Now, everyone has a cell phone, and there was no big magic there – we just used the camera to read both the QR codes.
Paul Vitale: I’m logging in to the back end, and I see real-time activity. There’s my scan in Switzerland, set on US time at 12:30. Can you see it on the map?
Carl Lewis: Yes. There’s a world map, and it locates the scan you just did.
Paul Vitale: I'm based south of Zurich, and we can hone into my road. That's my house where I created the scan. If I go to the other dashboard, it flicks to the new dashboard. I’ll log into that to see the invisible code’s activity.
Carl Lewis: So, you have separate dashboards for the visible and the invisible code?
Paul Vitale: Well, a brand would use one dashboard, but this is a demo dashboard.
Carl Lewis: Okay.
Paul Vitale: You'll see we were doing scans on the invisible code earlier in Karachi with our partners and over in China. You can see that on the map, along with the codes I've scanned a second ago. When I go down to the information, I see the two codes were scanned at 12:32:00, 12:32:04, and 12:32:39. Now we can take that code and inspect the data that's hidden in it.
We allocated parameters: where it was produced, where it was manufactured, where it was distributed, and where it should be. You can have up to a dozen parameters, all held as intelligent data in that QR code, but all read invisibly and using our authenticator to interpret the data. If a product is in the wrong area and counterfeiters and diversion companies are abusing the technology, this counteracts that by reading those codes using the authenticator. It stops that diversion in its tracks.
Carl Lewis: Yeah, they might be able to copy the label and what's visible, but they couldn’t copy the invisible code.
Paul Vitale: That's right.
Carl Lewis: If the inspector can't find the invisible code, you know you have a problem.
Paul Vitale: Yes. There are UV and blacklight inks that people know of in the brand protection field, but they fade. Our IR ink doesn't fade. It has an archival quality of over 15 years, and we're still scanning codes much older than that. We can also put the ink down on material, cloth, and nylon. And we're doing more testing – like a 60 wash and dry cycle on materials where the ink is still detected. It's called light fastness, and the high degree of light fastness means it doesn't degrade over time. When UV invisible inks are exposed to sunlight and ambient light, they eventually become invisible. That won’t happen with the RainbowSecure IR ink.
Carl Lewis: It’s incredible that it's durable on textiles. Paul, thank you. That was great. If you’re a listener, you had to use your imagination, so please watch the video version to get a better idea of what we discussed.
Carl Lewis: Paul, what’s the future of this product? Will more companies use things like VerifyMe to protect their brands?
Paul Vitale: Yes. Brand protection is a growing industry. We’ll experience exponential growth over the next two or three years, considering how brands are engaging with us and other brand protection companies. Many do it differently from VerifyMe. They might use shifting inks, fine print, or hide information within logos. Those all work, but we feel our solution can compete with them. We're focused on the future and helping as many brands as we can, but it’s a global problem. We’re all trying to correct it because we're concerned about the products we use, ingest, etc.
We must stop counterfeiters, especially when they're using inferior products that can be harmful. It's a serious issue and a constantly changing battle. We hope VerifyMe can come up with new ideas regularly and develop technology to keep brands ahead of the game.
Carl Lewis: Absolutely. Well, this podcast is called The Connected Enterprise, so it's a great way for companies to stay connected to their customers and products and give everyone more security about what they're buying and using every day. Paul, thank you.
Paul Vitale: It's been a pleasure, Carl.
Carl Lewis: Until next time, I hope everyone out there stays connected.