Product counterfeiting is a $16 billion plague. Jeans to jewelry, cassettes to watches, helicopter parts, brake linings, and pacemakers -- all have been copied so effectively that few consumers could see any difference from the original.
But today, with a new process developed at Light Signatures Inc. in Los Angeles and being tested by Levi Strauss, Chrysalis Records, and Nike, consumer rip-offs from poorly made imitations of branded products may become thing of the past.
Previous anticounterfeit devices have all been based on "sameness," with some uniform identifying mark, usually a sticker or a stamp, attached to each product unit. But the problem with that approaeh, Ronald A. Katz, chairman of Light Signatures, points out, is that counterfeiters were often able to duplicate the anticounterfeiting sticker before marketing their ersatz product.
The Light Signatures technique, developed by Katz and Robert Goldman, is based on the fact that everything in nature has a unique internal pattern, unable to be duplicated. A computer-generated light beam is passed through the product label, taking a set of pictures five one-thousandths of an inch large; each picture is as singular as a human fingerprint. The picture is then translated into code and printed on the label. The system can encode some 5,000 items per hour at a price of about 1 1/2 cents per unit. Nothing need be added to the product, no sticker or stamp attached. "Our system is the only one that is noncounterfeitable," Katz insists. If a manufacturer wants to check the authenticity of a specific item he need only pass the computer-generated light through the label again and compare the images.
This past summer Levi Strauss & Co. -- the world's largest manufacturer of branded apparel and a frequent target of counterfeiters -- became the first company to test the Light Signatures system, "signaturizing" up to 12 million pairs of its denim jeans. And this fall Chrysalis Records Inc. -- whose president once complained that there was a 30% chance that the record or cassette you buy in the store would be bogus -- became the first entertainment company to test the Light Signatures.
Beyond ensuring product authenticity, Katz points to enormous marketing advantages for products "signaturized" with his system. "In effect we're giving a manufacturer a birth certificate for each product," says Katz. "As a result, terrific opportunity opens up. A manufacturer can now not only identify where and when he made a product, but he can also identify where he sold it and how long it sat on the shelf." Market research, Chrysalis executives agree, is one of the prime benefits of the system; the record company plans to use the returned authenticity verification cards to refine the demographic Picture of their audience and to target rising and falling regional markets more closely.
Although Light Signatures is privately held and refuses to release any financial data, Katz says that this year's sales will be less than $1 million and that he sees unlimited potential. He is negotiating contracts in the fields of fashion, fragrance, cosmetics, and entertainment, and he expects tlne technique to be used eventually to verify such documents as Social Security cards, ID cards, legal papers, and securities.