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New NFC Solution Prevents Counterfeit Liquor in Taiwan

UserStar has developed an NFC tag that transmits a unique 'encrypted verification code' only once, via an NFC-enabled phone running a special app, and is then encoded with a new encrypted verification code, thereby preventing tag cloning.
By Claire Swedberg
Sep 01, 2014

To protect its highest-value liquors, Taiwanese wine and liquor company Fortune Brewery International Co. is launching an anti-counterfeit program that depends on a passive 13.56 MHz RFID tag (compliant with the ISO 15693 standard) that changes its own unique identifier with each read. The solution, provided by UserStar Information System Co., enables retailers and consumers to employ a Near Field Communication (NFC)-enabled smartphone and the UserStar's PhoneKey app to confirm that a product is not counterfeit.

The UserStar solution is an alternative to existing NFC anti-counterfeiting technology that offers limited security, since the tags themselves can be counterfeited, says Tseng Yin-Hung, UserStar's general manager. With standard NFC technology, he says, "the data can be encrypted when written on a passive tag, but the data encryption does not prevent a passive tag from being cloned." Passive EPC ultrahigh-frequency (UHF) RFID tags, Tseng says, could be cloned using systems such as an RFID development tool known Proxmark3 that can read and reproduce RFID signals in a cloned tag that would be identical to a legitimate tag.

When an NFC-enabled smartphone is used to read a UserStar NFC RFID tag attached to a bottle, the PhoneKey app will indicate whether that tag (and, thus, the bottle's contents) is genuine or counterfeit.
To prevent this, UserStar developed something it calls "active variable verification," a cloud-based software suite that prompts the PhoneKey app (running on an NFC reader device) to encode a tag with a new encrypted verification code that changes every time the tag is interrogated. If someone were to read that tag ID and use it to create a cloned tag, that ID would be invalid the next time the cloned tag was read. Thus, the cloud-based software would determine that the tag was counterfeit and the PhoneKey app would display an alert on the user's NFC-enabled phone.

Fortune Brewery's Liu Shu-Duan
With "expired identification technology," the company explains, the verification code remains valid for only a few seconds after the tag is read.

Sales of Fortune Brewery's high-value liquor have been growing in Taiwan, as well as in mainland China. This growth comes at the same time that counterfeiting is becoming an increasing problem in China, says Liu Shu-Duan, Fortune Brewery's chairwoman and president. According to Liu, the company researched anti-counterfeiting solution providers during the past year, which included bar-code labels, laser printing, specially designed bottle caps and standard RFID tags, but she adds that "those solutions are easy to be copied and cracked, and do not solve the real counterfeit problem at all."

Eventually, Liu says, the China Productivity Center, a Taiwanese economic agency, recommended the UserStar system. The company is initially tagging approximately 2,000 bottles of its Yunshang Fulushou Kaoliang liquor, which it plans to begin shipping to customers in November. "We will integrate the tag on the bottle-neck packaging manually," Liu states, and we will advise our consumers that they can download the PhoneKey app to verify the authenticity." The company will also provide a QR code poster that consumers can scan in order to download the app at an in-store Fortune Brewery kiosk. The app can also be downloaded from Google Play, China Mobile Market, 91.com or AppChina.

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