RFID: Radio tags set to combat the counterfeiters
Bootleggers could be left out in the cold as authentic goods and cash are tagged with tiny radio frequency identity (RFID) chips. Unless, that is, the criminals find a way to fake the tags as well.
Christian von Grone recently made a brave and expensive decision, and it will be hard for him to hide it if fails to pay off.
He is chief information officer (CIO) at clothing company Gerry Weber, and last year he approached the company's conservative Westphalian founder, Gerhard Weber himself, to request money to invest in a new technology.
That technology was RFID, and since last month RFID tags have been implanted into the care labels of every single one of Gerry Weber's garments.
Each tag costs around 9 cents, and the company manufactures 26m garments a year. Altogether that adds up to a heavy responsibility on von Grone's shoulders. But he seems confident.
"The business reason for doing this is very simple", says von Grone. "It will make us money."
Von Grone believes RFID will pay for itself in the short term by reducing the amount of labour-intensive stock counting and checking that Gerry Weber staff must perform.
This is because unlike old-fashioned bar codes, whole pallets and containers of RFID-tagged items can be counted instantly using wireless scanners.
But in the longer term, he has another ambition: to stop bootleggers from piggybacking on his company's success.
"We have 240 suppliers worldwide, and I think some of them - maybe five or ten - are being totally illegal.
"They produce more than what we order from them, and then they sell the excess on the open market."
Counterfeiting on a massive scale
- $600bn market in fake goods, according to the International Anti-Counterfeiting Association
- Tens of thousands of people die each year from fake alcohol and pharmaceuticals, according to Vandagraf International
- A single pallet of forged Viagra can fetch as much as $1.2m on the open market
Gerry Weber sends out RFID tags to its suppliers, so they can be sewn into the labels. But by sending only the required number of tags, the company ensures that any illegal excess the supplier makes will be untagged and hence identifiable.
"With RFID we can find out who the bad suppliers are, punish them and kick them out of our business."
Small, cheap, and everywhere
When scanned by a reader, an RFID chip emits unique signal, like a serial number, which can be cross-referenced against a database containing information about a tag's origin.
A counterfeit item will either be missing its tag, or have a tag which fails to correspond to the database, allowing it to be rejected.
Although the technology has been around for years, it is only recently that chips have become small and affordable enough to be used to tag millions - and potentially billions - of individual items for the purpose of anti-counterfeiting.
"We're talking the size of a grain of salt" says Steve Owen of NXP Semiconductors, which makes Gerry Weber's tags as well as those used by Pfizer to tag packets of Viagra.
"You can put our tags in paper labels, embedded in packaging, or encased in glass vials.
"We're even seeing if we can make tags thin enough to go into banknotes."
Tagging money is not as crazy as it might sound. Although no one has yet managed to make it work fully, scientists have come very close.
"The market for this would be huge", says Dr Hagen Klauk of the Max Planck Institute for Solid State Research, who along with his colleagues proved that circuits can be put onto banknotes without changing the way they feel.
The circuits are made from carbon, rather than silicon, allowing them to flex with the paper and to be thinner even than the ink on the surface of the banknote.
The first scientist to find an affordable and practical way of tagging banknotes will probably find themselves awash with money, because treasuries around the world are always looking for new weapons against forgers.
"There must be trillions of banknotes in the world, and every one of them would require circuitry to be put on its surface", says Dr Klauk.
If RFID becomes ubiquitous, then it might be time for counterfeiters to start thinking about a career change.
But on the other hand, a number of security researchers have voiced concerns about RFID, suggesting there could still be some life left in the bootlegging game.
"All the tools you need to hack RFID are already out there in the public domain," says Karten Nohl, of SR Labs in Berlin.
"If these tools are put together with a criminal mindset, there is a huge potential for abuse."
Mr Nohl believes that businesses are asking for trouble, by tagging ever more valuable items while at the same time using cheaper tags that are inevitably less secure.
This, he says, gives criminals both greater incentive and greater opportunity to break in.
And it's not just talk. In 2007, Mr Nohl succeeded in breaking the encryption on one of NXP's most popular RFID chips, which is still used in wide range of systems, from product tags to transport networks and security passes.
A group of researchers from Radboud University in the Netherlands then showed they could use the same cryptographic attack to hack into real-world systems, such as the Oyster Card used on London's transport network. Free travel, anybody?
NXP says it now promotes RFID chips with far better security for applications where they are needed, such as passports and payment cards.
But the company insists that advanced security is not needed for the average product tag, because businesses should also be using other layers of defence against counterfeiting, rather than relying solely on RFID.
"No chip is ever unhackable", says NXP's Steve Owen. "It's tamper resistant, but there's always a risk. You can't rely on one piece of technology to provide absolute security."