Vision and Challenges for Realising the Internet of Things

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 sufficient
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 counterfeits
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 possibilities
for brand owners to protect their brands and products, have been investigated, and systems
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 requirements
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 reserves.
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 limited
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 quality.
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 extensive
conflicts with enforcement agencies. Actors within this group are termed Desperados,
pointing out their unscrupulous behaviour. Typical products in this category include pharmaceutical
products and mechanical parts.
CERP-IoT – Cluster of European Research Projects on the Internet of Things
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