Chapter 4 Articles
4.1 Anti-Counterfeiting and how to deal with it in an IoT
SToP Project
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should help brand owners to find the approach that best suits their needs for protecting their products.
Usually, anti-counterfeiting measures include cost-intensive field investigations, case-by-case analyses, technical authentication, and legal actions. In general, their success of containing the problem and preventing the production of counterfeit products is limited. They are not suffi-cient to protect consumers from mass-produced faked products in a globalized market. For example, unless a high-enough percentage of counterfeit goods are seized, producing counter-feits still remains a profitable business. Thus, in a world where massive amounts of goods are shipped world-wide each day, information technology should be employed to automate the required tasks as much as possible, in order to extend their reach and to cover a larger amount of goods that can be checked.
The SToP project has analyzed the markets for counterfeit products in order to get a better understanding of the enemy. In order to select the most effective tools, the technical possibili-ties for brand owners to protect their brands and products, have been investigated, and sys-tems have been drafted that help brand owners to plan their implementation of an approach for product authentication. This chapter gives an overview of the most important aspects of this work.
2 Markets for Counterfeit Products
A detailed understanding of the problem of counterfeiting is needed to derive sound require-ments for solutions based on ubiquitous computing and ambient networks, which are part of the technological portfolio of the Internet of Things. An analysis of the main drivers and mechanisms of illicit trade, the roles of the different licit and illicit actors, as well as the supply and demand side of product counterfeiting is the foundation of a deep understanding.
2.1 Counterfeit Production
An analysis of producers of counterfeit goods reveals that they can be separated in different categories with different strategies. Depending on the presumed structure of a counterfeit market, appropriate counter-measures can be designed.
The first group produces counterfeit goods with the lowest average visual quality. The average functional quality has been rated as medium, in most cases allowing the owner to use the product but requiring an abdication of durability, stability, performance, or contingency re-serves. The typical product complexity is low to medium, and a further analysis showed that many producers within this category target branded articles with high interpersonal values.
The expected conflict with law enforcement in the country of production is the lowest among all groups. Since members within this group primarily utilize the disaggregation between brand and product, they can be labelled Disaggregators. Typical products in this group include clothing and accessories.
The second group produces counterfeit articles with the highest visual and functional quality.
Product complexity is highest among all groups, often allowing for an actual consumption or usage of the counterfeit articles. Counterfeit actors within this category seem to face only lim-ited pressure by local enforcement agencies. Since the product-related characteristics of the members within this group resemble those of the genuine articles the closest, this group can be referred to as Imitators. Typical products in this group include clothing and accessories but also fast moving consumer goods and computer hardware.
The third group is made up by producers of articles with a high visual but low functional qual-ity. Products are typically of medium complexity and are likely to pass as genuine articles if not carefully examined. They may result in a substantial financial loss for the buyer or even endanger the user's health and safety. Consequently, their producers often face considerable punishment if their activities become known. Since the deceptive behaviour towards the buyer of the corresponding article constitutes the main characteristic of the producer, this group of counterfeiters can be labelled Fraudsters. Typical products in this group include perfumes and cosmetics.
The fourth group contains producers of goods of medium to high visual quality, but with the lowest functional quality and product complexity. Products within this category are likely to severely endanger their user or consumer. Consequently, their producers potentially face ex-tensive conflicts with enforcement agencies. Actors within this group are termed Desperados, pointing out their unscrupulous behaviour. Typical products in this category include pharma-ceutical products and mechanical parts.
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The fifth group is made up of producers of articles with an average high visual and functional quality and a medium complexity. In this respect, they resemble imitators. However, the ex-pected conflict with law enforcement agencies is significantly higher since most actors within this group target branded products upon which the state imposes high taxes. They can be re-ferred to as Counterfeit Smugglers since they primarily profit from circumventing taxes rather than from realizing brand name related earnings. Typical products in this group include ciga-rettes and alcoholic drinks.
2.2 Counterfeit Consumption
The role of consumers is critical with regard to their awareness and buying behaviour, as well as their reasoning for and against purchasing counterfeit goods. Buying behaviour with re-spect to genuine branded goods appears to be highly similar among counterfeit consumers and others, indicating that many customers of genuine articles also purchase counterfeit goods. This demonstrates that consumers are often indifferent regarding the originality of products as long as their perceived value is appropriate.
Counterfeits are often available in good quality, which provides a strong motivation to go for a cheaper counterfeit product instead of a high-priced original one. Quality is often judged by superficial features, which are easy to verify but not necessarily give an indication about the functional quality of a product, for example a pharmaceutical product. But sometimes coun-terfeit products hold up to the quality of original ones even in such sensitive cases as pharma-ceutical products, making the difference between an original and a counterfeit item marginal.
It is much harder to argue for the original product in such a case. Of course there are good reasons to go for an original product, such as the continuity in quality. However, the casual consumer will likely be more attracted to the lower price associated with the counterfeit.
Consumers refrain from buying counterfeits if they are of poor quality, or if their availability is limited. A product of poor quality cannot provide the same value as an original product and is much less attractive to consumers even if it has a low price. Consumer goods are mostly judged based on their visible features, while for many products their functional quality is most important. However, functional quality is much harder to verify and thus often the buyer re-lies on proper looks or documentation. In many business areas, insufficient documentation leads to the rejection of products out of formal reasons, e.g. in the aviation industry.
Limiting the availability of counterfeits in the market can be a powerful tool to prevent con-sumers from buying them. Strong penalties prevent counterfeits from being offered openly in many countries, but whenever law enforcement is weak, counterfeits are more widely avail-able. Distribution over the Internet has reached great importance, since law enforcement is often very difficult. However, popular distribution channels like auctioning or classified adver-tisement web sites are often cooperative and remove dubious offerings.
The indifference of consumers might be overcome through education, which conveys the val-ues of continuous availability of high-quality products, cross-funding for research, or warran-ties. But these have to go hand in hand with trust in the distribution channels since otherwise consumers will have no means to ensure that a claimed original product is indeed one. Tech-nologies for identification and authentication can help to establish that trust.
3 Automatic Identification and Authentication
The genuineness of an item can only be established by verifying its source. Even if it is physi-cally equivalent to an original item, it may still be an imitation, and thus its use may raise, for example, legal or tax issues. In order to establish the source, an elaborate material analysis may be performed, or accompanying documentation may certify that the item in fact origi-nates from a legitimate source. Authentication features provide a strong connection between the documentation and the item itself. This is done by physically attaching encoded informa-tion, which refers to a document, to the item such that the carrier of this information cannot be copied and thus transferred to imitated items.
In order to provide for an effective and efficient means for verification throughout the supply chain, an authentication feature must be easily accessible and automatic verification must be possible. Technologies for automatic identification provide a good starting point to meet these requirements. They can be seamlessly integrated in logistic processes and may not even re-quire additional dedicated equipment. A background infrastructure provides the services that are necessary to access authentication information across organizations.
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3.1 Authentication Features
For each type of product, such as pharmaceuticals, plane spare parts, or luxury goods, appro-priate tags that comply with the manufacturing processes have to be identified or developed.
Different aspects of the product packaging and product materials need to be considered. A wide range of products from several vendors are available. A key challenge is the integration of the tags into real life products. Factors to consider include cost, durability, reading speed, information capacity, and of course security.
As an example, consider an RFID tag that was developed within the SToP project to fit into the metal casing of a watch (Figure 4.1-1). The main challenge was to be able to reliably scan the tag through the metal casing while meeting the watch maker’s requirements. In particular, there was a strong need to increase the reading distance of the RFID tag in a metallic envi-ronments.
Figure 4.1-1: RFID tag embedded in the casing of a watch
Necessary adjustments of manufacturing processes to enable production of tagged products were investigated together with industry partners. The results of this task have been found to be an important factor for the real-world applicability of the concepts. Here, new require-ments imposed by the utilized smart tags, such as maximum pressure or temperature, have been taken into consideration.
RFID is a wireless technology designed for automatic identification – and potentially a very effective one. Each RFID tag carries a unique identifier that can be captured with a reading device without requiring a line of sight, which makes it an appealing technology that can re-place barcodes in many areas. However, standard RFID tags cannot be considered secure as it is technically feasible to clone RFID tags. Therefore, the uniqueness of an identifier cannot be guaranteed. Thus in the strict sense, standard RFID tags are not suitable as a tool for authen-tication. This weakness can be overcome by linking an RFID identifier with an online data-base, where the current status of an identifier is kept. Only if this status is valid in the current context, the item carrying the respective tag should be considered authentic.
There are developments under way that extend the standard functionality of RFID tags by secure authentication mechanisms that rely on a challenge/response protocol between the reader and the tag. The basic idea is that the tag is accepted as being genuine if and only if it responds correctly to a challenge given by the reader. The response depends on a secret key which is stored in the tag, and on a cryptographic algorithm. This however, requires more elaborate capabilities from such tags, such as securely storing the key and performing a cryp-tographic calculation, which increases their cost.
Due to their low cost, printed features are highly attractive as security features. One example is the “copy detection pattern” (CDP), which is a random-looking pattern of small dots that can be printed with any printing technology. Within the pattern, information such as a serial number can be encoded. The trick however is the fact that it is impossible to create a copy of this pattern that would be accepted as the original pattern. Since each scan/print cycle creates small deviations within the pattern, a statistical analysis of the pattern reveals the fact that it is a duplicate. However, the use of CDPs requires an extensive knowledge of printing technolo-gies and they are not a “plug and play” solution.
Both technologies, RFID and printed features, have distinctive advantages and drawbacks. In general, RFID tags need not be visible and therefore they neither require dedicated space on a packaging nor do they disturb the visual appearance of an item. They can be covered by a layer of material and are thus protected against environmental forces. However, achieving high reading rates of RFID tags is still a subject to engineering challenges regarding tag integration and reader installation. In contrast, printed features are very cheap to produce and provide a high level of protection against cloning. The devices that can read tags, either RFID or printed, are widely available, for example in mobile phones. Some models include RFID readers, and
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almost every model includes a digital camera. Overall, this demonstrates the versatility of technologies that are building blocks of a pervasive Internet of Things.
3.2 Authentication Infrastructure
For every item that is being checked, somebody or something has to take a decision whether the item under study is genuine or not, based on the captured tag data (and possibly addi-tional data). This means that anybody who is using a device to verify items must be connected to a background infrastructure that routes the captured data to a suitable authentication ser-vice and relays back the result of the verification.
The infrastructure must be flexible with regard to the type of checks being performed, since authentication features are evolving over time and might be replaced with others. This leads to a mix of features even on the same type of products. Depending on the outcome of a verifica-tion process, the infrastructure should also be able to trigger certain acverifica-tions. For example, in case of an unsuccessful verification an automated notification could be sent to an incident response unit. As a final requirement, the infrastructure should be easy to integrate in existing business systems, since verification can be regarded as a sub-process of other business proc-esses.
Figure 4.1-2 shows the overview architecture of a verification infrastructure, including internal components and dependencies on external entities. It is important to note that the infrastruc-ture covers the processes relevant throughout the lifecycle of a product, including the initiali-zation of the verification process, the execution of the verification itself, and reporting the results.
The architecture of this system is rather generic, but it has proven valid for a number of sce-narios that have been tested during the SToP project. These scesce-narios included packing in a warehouse, verification of incoming goods in a pharmacy, verification of returned goods in after-sales service, and maintenance work on an airplane. For each scenario, specific adapta-tions have been made, since for each scenario, different authentication modules have been used.
EPCIS Repository
P
Product Verification Infrastructure
External Verification
Services
U
User Interface
Event Data Analyzer
Enterprise Resource Planning (ERP)
Device Clients
Feature Data Capturer
Feature Data Generator
Feature Verifier Verification Process Manager
Workflow Manager
Event Repository
Manager Consumer
Participation Module
Security and Trust Manager Pedigree Manager
Reporting and Statistics Module Visualizer
Moduie After Incident Manager
Device Manager
Pre-Authentication Modules Authentication Modules Post-Authentication Modules Operational Modules
Figure 4.1-2: Architecture of a product verification infrastructure
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4 Business Process Integration
Seamless integration of product authentication is important since it minimizes the costs asso-ciated with extending the involved systems and performing the authentication during usual business operations. The field trials within the SToP project have demonstrated how this can be achieved in various settings. As a first example, consider the processing of orders in a warehouse (Figure 3), where multiple packages are bundled together for outbound shipping.
During bundling, items are checked using RFID tags (including background checks on the item’s status). The worker gets immediate visual and acoustic feedback about the result of the check such that the workflow is only interrupted in case a non-authenticable item occurs.
Finishing order Packing order
Prepared order Bulk checking
Outbound Inbound
Figure 4.1-3: Outbound and inbound checking at a warehouse
Using an RFID gate, a complete bundle of items can be checked. This, however, is not com-pletely reliable with the RFID technology (HF) being used. There are also other issues related to the use of RFID. For example, during bundling false reads can occur due to the long range of RFID readers. This can be mitigated by designing the workplace appropriately. The checks ensure that only authenticated goods are handled within the warehouse. Inbound checking is necessary if a number of external suppliers are shipping goods to the warehouse. Outbound checking is important for quality assurance and the foundation for further tracking down the supply chain.
Prepared order Scan order slip Register products Finish order Inbound
Figure 4.1-4: Inbound process in a pharmacy
The second example is a similar process in a pharmacy (Figure 4.1-4). Due to space restric-tions, a small-range RFID reader is being used, which excludes false reads but requires more precise handling. The check provides immediate feedback on the authenticity of the goods and additional data, such as expiry dates. Inbound checking is preferable in this environment, since the pharmacist is interested in securing the internal processes at the pharmacy. An addi-tional check at the point of sales is therefore not required. It is feared that such a check would erode the trust of customers in the pharmacy.
5 Summary
Technologies for automatic identification are the basis for a seamless interaction of goods handling processes with IT systems. The reading of an identifier from an object can trigger a process in the “virtual world”, which in turn provides feedback to the physical world. This simple mechanism can be enriched with further attributes of a physical object and information about the status of the virtual representation of such an object. For example, an attribute can be provided by cryptographic authentication of an item, which establishes the presence of a secret key. Another example is the presence of a certain pattern on the item, which is estab-lished by a visual reading. Complementary to this information gathered from the physical world is the associated status information that is represented in the virtual world. By matching cryptographic data or the captured pattern data with its internal database, an IT-based service establishes the authenticity of an item.
Technically, seamless integration of the physical world and the virtual world is challenging, for example, due to limitations of wireless communications, or since implementing a secure au-thentication mechanism with computationally limited devices is hard. Moreover, there are