Feb 01, 2005In 2004, counterfeit products accounted for some 7 percent of world trade—a market volume of $500 billion. Many companies use holograms, watermarks and other technology to try to thwart counterfeiters, but these techniques are either unsuitable for automated tests of product authenticity or do not provide the required level of security. The EPCglobal Network, conceived as a means of sharing EPC data among supply chain partners, could help solve the counterfeiting problem by enabling companies to quickly and automatically authenticate unique items.
Today, bar codes identify only the type of product, not the individual item. So if a clever counterfeiter creates a good replica of a Prada handbag or Rolex watch, complete with a bar code, no one could easily determine whether the product is real or fake. And if a third-party
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manufacturer hired to make jeans for Levi’s runs off an extra 10,000 and sells them without the brand owner ever knowing, these goods are impossible to distinguish from legitimate items.
With EPC tags, however, the brand owners could assign a specific serial number to each item they make or is made for them. These unique identification numbers could be stored in a database on the EPCglobal Network, and when the goods are shipped to a retailer, the retailer could scan the tags and look up whether the numbers are among those assigned by the brand owner, indicating the products are legitimate. All parties in the supply chain could also share track-and-trace information to check whether a product entered the supply chain through legitimate means.
But there’s a major drawback to this solution: EPC tags can be cloned and attached to illicit products. Unscrupulous retailers could cheat the system by not recording the sale of legitimate items and then repeatedly using the serial numbers from those items’ tags on bogus goods.
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Simple track and trace might work for fast-moving consumer goods, where the overall number of illicit products has to be reduced but a small number of counterfeits can be tolerated. But this solution is not sufficient for high-value goods or in cases where illicit products impose a high risk to health and safety. The Auto-ID Lab at St. Gallen near Zurich, Switzerland, has set up a special interest group (SIG) to work with companies to develop more sophisticated anticounterfeiting systems using EPC tags and the EPCglobal Network.
One way to avert cloning attacks is to develop secure authentication mechanisms, such as the challenge-response techniques that are common in today’s contactless smart cards. To implement this in the EPCglobal Network, two changes are required: First, a Product Authentication Service must be defined at the server side; it generates a random challenge, sends it to a tag and verifies the response. Second, EPC tags have to be augmented with a small crypto-engine to generate the response. These secure authentication EPC (SA-EPC) tags will be more expensive than standard transponders but can be cost-effective on high-value goods that are often counterfeited.
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The goal of the anticounterfeiting SIG is to define an open standard for the authentication procedures. Member companies, which could be any organization grappling with product counterfeiting, support the development process by specifying their requirements, ensuring that the resulting concepts help to solve real-world problems. For this purpose, the SIG will examine both technical and business-related issues. In close cooperation with the Auto-ID Lab staff, companies will define and evaluate economically promising scenarios for the use of RFID to combat counterfeiting, develop appropriate solutions and identify potential combinations with other technologies. The SIG will propose a standard and demonstrate its technical feasibility to EPCglobal’s board members. The SIG will also compile adoption roadmaps and business cases for various application scenarios, in order to enable knowledge transfer to the participating organizations.
Counterfeiting will never be eliminated, but we believe the EPCglobal Network can help to greatly reduce the problem.
Elgar Fleisch, a professor at the University of St. Gallen and the ETH Zurich, co-chairs the St. Gallen Auto-ID Lab. Thorsten Staake, a senior researcher at the St. Gallen Auto-ID Lab, organizes the Anticounterfeiting special interest group. To comment on this article, click on the link below.