wilamowski-b-m-irwin-j-d-industrial-communication-systems-2011

9-10 Industrial Communication Systems
9.5 anticounterfeiting
Counterfeiting is the process of fraudulently manufacturing, altering, or distributing a product that
is of lesser value than the genuine product. Counterfeiters now have the ability to replicate brand
logos and product quality criteria nearly perfectly—making any attempt to disprove their authenticity
both expensive and time-consuming. And the fight against gray-market trade has been made
even more difficult because counterfeiters now frequently use genuine parts in their fake products.
Counterfeiting is now a global problem. Seven percent (7%) [BGK07] of all world trade is in counterfeit
goods and that over the past 10 years counterfeiting has destroyed 120,000 jobs each year in the
United States, and 100,000 in Europe [ICCC06]. With the counterfeit industry growing at a rate of
6%–8% annually, it is estimated to be a US$30 billion industry in the United States and US$50 billion
worldwide. The German advocacy group APM, which fights product and brand piracy, calculates
annual losses for the German economy due to counterfeiting at €25 billion. Counterfeit goods do
not only target famous brand names but anything that can buy. Virtually every country in the world
suffers from counterfeiting which results in—lost tax revenue, job losses, health and safety problems,
and business losses.
RFID technology has been proposed to address the above concerns since RFID tags can be attached
to individual items encoded with product specific information which can prove its authenticity and
originality. A number of RFID anticounterfeiting mechanisms have recently been proposed. These
systems are aimed at relatively high-end consumer products, and helps protect genuine products
by maintaining the product pedigree and the supply chain integrity. The main application areas for
RFID anticounterfeit technology include electronic drug pedigree, tracking genuine automobile
parts, document authentication, and detecting fake currency and passports. We now discuss each of
these applications.
9.5.1 Electronic Drug Pedigree
One of the most important applications of RFID anticounterfeit technology is detecting genuine
drugs from counterfeit drugs. It is estimated that between 5% and 8% of the 500 billion USD in
medicines sold worldwide are counterfeit [STF05, BASC04] and for developing countries the percentage
of counterfeit drugs account for up to 60% of all drugs [IP05,KSCB03] and can lead to
injury and, in some cases, fatality. It is projected that 95% of counterfeit pharmaceuticals provide
little or no therapeutic value. According to the World Health Organization, 43% of them contain no
active ingredient, and another 21% are subpotent, often caused by counterfeiters expanding volume
through dilution. As many as 25,000 cancer patients may have received subpotent medicine that was
1/20th the strength prescribed by their physicians when Procrit • was relabeled by U.S. counterfeiters
in 2002. Of 110,000 vials labeled as the highest-dose 40,000-unit product, but actually containing
the lowest-dose 2,000-unit product, only 8,000 were recovered; the counterfeiters gained approximately
$46 million [GFL03]. With the global nature of modern supply chains, it has never been easy
to cope with counterfeiters. Seeking solutions to counterfeiting, the Food and Drug Administration
(FDA) recommended, in February 2004, that each drug have an electronic pedigree, which is a
“secure record documenting the drug was manufactured and distributed under safe and secure
conditions” [CCD04]. The FDA’s approach to cost-effectively tracking individual drug products in
the supply chain is to serialize each drug product, adopt electronic pedigrees, and automate the
tracking process using RFID. The Authenticated RFID model [SA05] enhances item-level product
security in real-time, independent of a connection to a host network, by creating strong authentication
between the tag and an authenticated RFID reader. By initially deploying the model at the point
of manufacturing and the point of dispensing, the pharmaceutical industry immediately provides a
higher level of item-level authentication against counterfeit products [POT06,EDP09]. After initial
introduction of RFID and Public Key Infrastructure (PKI) end-to-end item-level authentication,
© 2011 by Taylor and Francis Group, LLC