You are on page 1of 20


The Holography Times
Vol. 8, Issue 24
The Holography Times
Endeavour to protect people and products
May 2014 | Volume 8 | Issue 24
Counterfeit threat for
Industry on RISE
PLUG IT HoMAI quarterly newsletter
The Holography Times
Vol. 8, Issue 24
News Bytes
The Holography Times
Vol. 8, Issue 24
Dear Reader,
Welcome to the 24
editon of The Holography Times.
As you know our previous editon focused on Auto
Counterfeitng and we received overwhelming response
from majority of you. We would like to thanks you all for
your valuable inputs and tme.
Our current editon will focus on The making of
counterfeit electronic parts which has become a very big
business across the globe. In fact, counterfeit electrical
and electronic products now occupy second place afer
pharmaceutcals. Worldwide counterfeitng of electrical
products is estmated to range anywhere between US $
11 billion to US $20 billion annually. In North America
alone, the electrical product counterfeitng is estmated
to be in the US $300 million to US $ 400 million range and
rapidly growing. Research from the Mobile Manufacturers
Forum (MMF) says around 148 million counterfeit or
substandard mobile phones were sold worldwide in 2013,
mostly in developing countries.
Although not much has been done in India to assess
the impact of counterfeit electrical components, there
is a study by FICCI CASCADE that focused on computer
hardware and mobile phones. According to this study
counterfeit computer hardware consttute 26.4 percent, or
` 47 billion by value, of the total market size estmated at
` 179 billion for 2012. Similarly, the Grey market for Mobile
Phone consttute 20.8 percent, or ` 90 billion by value, out
of total market size estmated at ` 434 billion in 2012.
Our current issue highlights the Issue of Electrical and
Electronic products Counterfeitng and needs of an
efectve ant-counterfeitng strategy to combat this
problem. Apart from this the issue also covers industry
updates including news, patents and events.
Do send us your feedback/critcs at
C S Jeena
In this issue
Industry updates
Counterfeiting News Update 17
Global patents 18
Upcoming events 19
News bytes
Counterfeit threat for
electronic industry
on rise: plug it
Coded holograms:
keeping the supply
chain secure
Very interesting issue, especially the part regarding
automotive industry problems. It seems that big step
in protecting vehicles and major vehicle parts are
METAL micro-holograms - all with a unique code.
Jiri (George) Perkous
Owner of Segment Security, LLC and Holoptica, LLC
Thank you for The Holography Times. I look forward
to staying in touch and reading your articles.
Paul Westwood OAM
Director of Forensic Document Services Pty Ltd,
Sydney Area, Australia
A really interesting and complete article.
Beatriz Cerrolaza
Chief Financial Ofcer & Chief Marketing Ofcer,
ALISE DEVICES, S.L., Madrid Area, Spain
4 1
The Holography Times
Vol. 7, Issue 23
The Holography Times
Endeavour to protect people and products
Dec 2013-Jan 2014 | Volume 8 | Issue 23 HoMAI quarterly newsletter
Grey market
Direct tax loss to
93 Million ($)
Sales loss to industry
2 Billion ($)
Indirect tax Loss to
512 Million ($)
Tax loss to the
605 Million ($)
The Holography Times
Vol. 8, Issue 24
Fake labels taking a toll on liquor firms:

angalore, India: Counterfeit
label has become increasingly
lucrative in some States because
of a sharp rise in taxes, according
to news published by Mint.
United Spirits Ltd (USL), Pernod
Ricard and Allied Blenders and
Distillers Pvt. Ltd (ABD) and
other top liquor companies
are losing out on liquor sales
in fast-growing eastern states
such as West Bengal, Assam and
Bihar because of a significant
increase in sales of fake labels
poor quality blends that are
packaged as popular alcohol
brands. Over the years, apart
from the states in eastern India,
bottles of counterfeit alcohol
have been sold in some other
states including Andhra Pradesh,
Rajasthan and Haryana, where
regulation is relatively weaker.
States in eastern India account
for roughly 10-12 percent of
liquor sales in the country and
are among the fastest growing
regions in India at a time when
overall growth in Indias liquor
industry has dropped to its
lowest in a decade. Last week,
Indias fourth largest distiller
Tilaknagar Industries Ltd bought
the branded alcohol business
of Kolkata-based IFB Agro to
increase its presence in states
such as West Bengal and Assam.
Incidentally, all these States
(West Bengal, Bihar and
Assam) are not using any
kind of authentication/ anti-
counterfeiting solutions to
curb this menace. According
to Hologram Manufacturers
Association of India (HOMAI),
the problem can be curbed to
a large extent with the usage
(Holographic Excise
Adhesive Label). In India more
than 18 States & UT are already
using security hologram as
excise adhesive label on liquor
bottles. This provides them an
effective anti-counterfeiting
tool in identification of spurious
liquor and curbing the problem
of illicit liquor and consequently
helping in increasing state
excise revenue. A state that uses
hologram tax stamps on liquor
bottles collects higher revenue
per person as compared to those
states who do not use a hologram
tax label (See table below).
Table: Comparison of State using HEAL vs not using any anti-counterfeiting solutions
State excise department using anti-counterfeiting solution
Name of Department 2001-02 2011-12 Increase in Population of Revenue Per
(`Crore#) (`Crore) last 10 State in Crore Person in
Years Census 2011 `*
Delhi 606.41 2533.72 1927.31 1.67 1517.19
Tamilnadu 2058.21 9975.21 7917.00 7.21 1383.52
Uttarakhand 232.04 755.98 523.94 1.01 754.97
Madhya Pradesh 704.68 4316.49 3611.81 7.25 595.37
State excise department not using any anti-counterfeiting solution
Name of Department 2001-02 2011-12 Increase in Population of Revenue Per
(`Crore#) (`Crore) last 10 State in Crore Person in
Years Census 2011 `*
West Bengal 512.43 2117.04 1604.61 9.13 231.87
Bihar 238.90 1980.98 1742.08 10.38 192.32
Jharkhand 100.21 457.10 356.89 3.29 138.93
Assam 150.91 503.35 352.44 3.11 161.84
*Revenue per person = Revenue in 2011-12/Population of State
# 1 Crore = 10 million
Leading News
The Holography Times
Vol. 8, Issue 24
Uses and applications
KENYA eyeing more revenue from bottled
water with new tamper proof stamps
airobi, Kenya: The Kenya
Revenue Authority (KRA)
will use the modern stamp duty
on bottled water to seal loopholes
of possible tax evasion. The new
stamps are tamper proof, having
enhanced security features.
However, the move is likely to
put a halt to the fast growing
bottled water industry estimated
to rake in more than Sh16 billion
annually. This follows a successive
application of the modern stamp
duty technology on tobacco,
wines and spirits. Commissioner-
General John Njiraini said the
achievements made in the two
sectors will encourage them to
roll out the same system for the
beer and soft drinks to improve
tax efficiency on excisable goods.
Bottled water sector is our next
emerging selling tax compliance
area and we have to put our feet
on it, he said. Njiraini noted that
the new security features will
improve the tax administration
in the country. He noted that the
new features make it difficult to
counterfeit the stamp duty to
be used in excisable goods. The
old stamp duty could easily be
counterfeited, denying it some
significant revenue. The system
provides us with the capability
to authenticate genuine excise
stamps on a real time basis
during field visits, he said.
Previously, the authentication
was done manually, creating a
loophole on possible tax evasion.
Since its roll out in December last
year, the taxman has impounded
over 10,000 pieces of wines and
spirit products from over 400
outlets. The culprits have paid
various fines with some running
as high as Sh1.5 million. We shall
also have the goods in question
forfeited, Njiraini warned. The
new system is able to monitor
the entire chain process of an
excisable good earmarked for the
Amarnath Shrine Board enhanced
security features of Yatra form
ammu and Kashmir, India: To
curb duplication of registration
forms of Amarnath yatra, the Shri
Amarnathji Shrine Board (SASB)
will issue new forms this year
onwards, with security features
of currency notes. The forms will
be printed by Security Printing
and Minting Corporation of India
Limited (SPMCIL) and will cost
nearly ` 7.5 million.
The revised form will have many
security features, including the
Ashoka pillar watermark and text
Shri Amarnathji Shrine Board
and the boards logo printed in
the background, which can be
seen only through a powerful
magnifying glass. The logo, which
will be printed in fluorescent
blue ink, can be viewed under
ultraviolet light, and the printing
would be done with chemically-
sensitive security ink.
The Holography Times
Vol. 8, Issue 24
Canadian Government introduces
extensive amendments to Trade-marks
Act in Economic Action Plan, 2014
n March 28, 2014, the
Canadian government
introduced the Economic Action
Plan 2014 Act, No. 1 as part of an
omnibus budget implementation
bill. The bill includes significant
amendments to the Trade-marks
Act that are designed to put
Canada in a position to adhere to
major international trade-mark
treaties, including the Madrid
Protocol, the Nice Agreement and
the Singapore Treaty. Continuing
the trend set by Bill C-8, the
pending Combating Counterfeit
Products Act, the new bill repeats
some amendments included in
the previous bill and includes
additional provisions, repealing
or replacing some of the unusual
or even unique aspects of the
Canadian Act. For example, a
trade-mark will become a
trademark, wares will become
goods and both associations
of similar trade-marks and
the distinguishing guise will
disappear from Canadian practice.
With significant changes the
definition of a trade-mark will
be greatly expanded to cover a
sign or a combination of signs
including a word, a personal
name, a design, a letter, a numeral,
a colour, a figurative element,
a three-dimensional shape, a
hologram, a moving image, a
mode of packaging goods, a sound,
a scent, a taste, a texture and the
positioning of a sign.
French Customs signs
agreement with IACC
Kazakhstan to host anti-
counterfeiting global forum
ARIS: French Customs (DNRED) and
the IACC, a Washington, D.C.-based non-
profit organization committed to combating
trademark counterfeiting and piracy, signed
a Memorandum of Understanding (MOU)
that enhances cooperation between the two
organizations regarding the enforcement
of trademarks and copyrights. This
unprecedented agreement will improve
the ability of French authorities and the
IACC to communicate, cooperate, and share
information and resources, as well as further
efforts in combating online counterfeit
merchants via the IACCs RogueBlock program.
With retail e-commerce sales rising steadily
over the past decade, the Internet provides an
enticing platform for criminal merchants to
sell counterfeit goods. The IACCs RogueBlock
program uses a follow-the-money approach
and provides a system for brand owners
to report online sales of illegal counterfeit
goods. By collaborating with the worlds
largest international payment brands, the
RogueBlock program works to choke off
funding to counterfeit merchants.
azakhstans Ministry of Justice will be organising an
anti-counterfeiting international forum on May 21 at the
Palace of Independence in national capital Astana.
According to a Ministry of Justice the following issues will
be discussed:
(1) Problems of counteraction against counterfeiting,
falsified and defected products
(2) Food and pharmaceutical safety
(3) Dissemination of pirated music. audio and video
products on the Internet and
(4) Issues on harmonization of legislation in the sphere of
intellectual property within the Customs Union.
The ministry is expecting speakers and participants
from Governments of Kazakhstan, Russia and Belarus;
representatives of World Intellectual Property Organization
(WIPO), Eurasian Economic Commission for Europe, World
Customs Organization (WCO), World Health Organization,
Interpol, International Trademark Association (INTA);
International Federation of the Phonographic Industry (IFPI);
African Intellectual Property Organization, Governments of
the countries of the Commonwealth of Independent States
and far abroad, NGOs, rights holders, universities and other
interested parties.
The Holography Times
Vol. 8, Issue 24
Project awarded
GHANA approve tax stamp contract worth
US $ 50 million to Authentix
hana: The Parliament of
GHANA has approved a
contract between the government
of Ghana and Authentix, USA for
the procurement of tax stamp
systems. The purpose of the
agreement is to actualise the
implementation of the provisions
in the Excise Tax Stamp Act 2013
which was passed by the House in
December 2013. It seeks to engage
the services of and expertise
of Authentix International in
the implementation of the tax
stamp system in the country.
Under the agreement, Authentix
would be responsible for the
installation of a system Web
Based Portal, an appropriate
stamp affixing machinery where
necessary on production lines of
manufacturers, an operational
and production testing, a testing
validation and acceptance of
machinery and systems and the
training of officers in the use of
monitoring and detection devices.
The Government of Ghana will
pay the supplier the sum of US$
11,790,000 per year for a period
of five years for its services as
well as a monthly installation of
US$982,500 for four years after
an initial payment on delivery,
installation and final acceptance.
De La Rue is
awarded latest
Bahrain passport
contract, securing
a partnership of
almost 50 years
IRSIS awarded
Philippines tax
stamp project
anama, Bahrain; De La Rue has been awarded a 5 year supply
contract by the Kingdom of Bahrain for the nations machine
readable passport and high security film laminate bio-data page
protection solution. This award secures a partnership that first started
in 1971 and includes a book redesign within the contract terms.
Bahrains Passport contract award, made earlier this year, covers the
supply of 100 thousand machine readable passports per year for the
next five years. De La Rue has also been commissioned to design a
new book for the government, which will include the latest security
features and technologies, countering specific threats and ensuring
the documents integrity against potential attack and counterfeit. In
addition to the book, De La Rue will be supplying half a million specially
designed MLIS patches, a proprietary high security thin film laminate,
to protect the holders details on the books bio-data page.
Philippines: IRSIS Corp.., a
joint venture of four IT Firms
including (CAI-STA Philippines,
Inc., Philcox Philippines, Inc.,
Latent Image Technology Ltd.,
and Comclark Network and
Technology Corp) has been
awarded the Bureau of Internal
Revenues (BIR) security tax
stamp project worth P521.64
million., which is expected to
be rolled out by the middle of
this year. BIR Commissioner
Kim S. Jacinto-Henares said the
contract for the Internal Revenue
Stamps Integrated System
(IRSIS) project, which will aid in
monitoring the supply and sale
of tobacco products, was signed
last November.
The Holography Times
Vol. 8, Issue 24
Standard and development
NASPO SA 2013 security audit now
combines ISO 14298 requirements
(Washington, DC): The North
American Security Products
Organization (NASPO)announced
today a new audit that combines
two highly recognized security
standards for producers of
documents of value employing
added security features designed
to protect against counterfeiting.
The new NASPO audit now covers
security requirements from
ISO (International Organization
of Standardization) and from
NASPO (North American
Security Products Organization),
providing both convenience
and cost savings to those firms
seeking security assurance
certification on a national and/or
international level.

Producers of security
documents, cards and foils can
now achieve both the NASPO
Security Assurance standard
(NASPO SA 2013) and the
ISO 14298 standard (Graphic
Technology -Management of
Security Printing Processes)
through a single NASPO audit.
This allows organizations to
meet the requirements of a key
international security standard
from ISO as well as national
security standards of ANSI/
NASPO (American National
Standards Institute). NASPO will
also offer individual audits to
14298 to those organization not
requiring combined audits.

NASPO SA 2013 is an accepted
security standard by ANSI
used today by private industry
as well as state and federal
agencies. It was developed for
security printers, security foil
producers, technology suppliers
or any organization seeking to
implement or enhance their
security practices. The conformity
assessment process of NASPO SA
2013 has been proven to meet
the security requirements of a
broad base of users.
The ISO 14298 standard is
similar to NASPO SA 2013,
but does not include security
technology suppliers or other
security organizations. Thanks
to NASPOs participated in the
development of ISO 14298,
the NASPO and ISO standards
share common auditing
and conformity assessment
procedures, making it easier
now to meet the requirements of
both standards through a single
auditing process.

NASPO has developed our audit
processes over the last 10 years
to meet the high requirements of
security contractors and users,
said Richard Ward, Chairman of
NASPO. A NASPO Certification
represents trust and credibility
in the audit process and a level
of assurance that the standards
requirements are being met and
implemented as intended.
MIT develops smartphone-readable
particles to prevent counterfeiting
Chemical engineers from
Massachusetts Institute of
Technology (MIT) have invented
a new type of tiny, smartphone-
readable particle that is invisible
to the naked eye, containing
coloured stripes of nanocrystals
that glow brightly when lit
up with near-infrared light.
These particles can easily be
manufactured and integrated into
a variety of materials and can
withstand extreme temperatures,
sun exposure and heavy wear,
explained Patrick Doyle, a chemical
engineering professor at MIT.
They could also be equipped with
sensors that can record their
environments. To manufacture
the particles, the researchers
used stop-flow lithography, a
technique developed previously
by Doyle. Many strategies have
been developed to try to label
legitimate products and prevent
illegal trade - but these tags
are often too easy to fake, the
researchers found. Using this
procedure, the researchers
can generate vast quantities of
unique tags. With particles that
contain six stripes, there are one
million different possible colour
This capacity can be exponentially
enhanced by tagging products
with more than one particle. For
example, if researchers create a
set of 1,000 unique particles and
then tag products with any 10 of
those particles, there would be
1,030 possible combinations - far
more than enough to tag every
grain of sand on earth.
Source: www.
The Holography Times
Vol. 8, Issue 24
Cover Story
Counterfeit threat for
electronic industry on
rise: plug it
Imagine incidents such as
an aircraft crashing due to
malfunctioning counterfeit
parts, a medical equipment
blurs off in the middle of the
surgery, a missile misses the
target and hits the own camp
and a heavily invested satellite
fails reaching its destiny or a
fake mobile battery exploding
even as one is using the phone.
The counterfeit electronic parts
are available everywhere from
sophisticated semi-conductors
and chips used in commercial
and military electronics as well
as the normal day to day used
electronics items, and they
represent a serious hazard if
used in critical systems such as
aircraft navigation, life support,
military equipment, or space
After the crash of the C-130J
Super Hercules near Gwalior
there were controversial news
reported in the media about
counterfeit electronics being
the reason for this unfortunate
incident. Actually, certain
avionics displays fitted in this
aircraft as original equipment
were manufactured by L3
Display Systems Corporation, a
US Company
. In November 2010,
the company become aware
that its in house failure rate
for a chip installed on display
units used in C-130J and C-27J
had more than tripled from 8.5
percent to 27 percent. When
sent for testing, the parts were
found as suspected counterfeit.
Although, the company did not
give any recall notice, But when
this matter became known to
the public, the US Senate Armed
Services Committee decided
to investigate the matter and
released its report on May 21,
2012. The report admitted that
counterfeit electronics parts
were breaking into the defense
supply chain and could endanger
the lives of troops and allies.
While the report focuses on the
risks posed to military systems,
there is no reason to believe that
the risks are any different for
non-military systems
Author: Author is Secretary of Hologram Manufacturers
Association of India (HoMAI) since 2006 and also serves as
Editor of The Holography Times.
C S Jeena
Brief Abstract:
Counterfeiting is not a new term for
electronic industry as counterfeit
electrical and electronic products
now occupy second place after
pharmaceuticals estimated to
range anywhere between US$11
billion to $20 billion worldwide
every year. However, counterfeit
electronic parts have been much
in the public eye in recent weeks.
On March 28, 2014 one of Indian
Air Force Aircraft (C-130J Super
Hercules) crashed near Gwalior city
killing ve crew members. There
were controversial news reported
in media about the counterfeit
electronics being the reason for
C-130J air crash. Over the past
several years the electronics industry
has seen a marked increase in the
availability of counterfeit electronic
components. Counterfeiters
have attacked every commodity
of electronics, from simple
components such as capacitors,
to complex integrated circuits such
as microprocessors. In expensive
commercial devices, as well as high
cost military components, have seen
counterfeiting on the rise. This article
highlights the serious risk, its impact
and the possible proactive steps that
can be taken to curb this menace.
1. Did IAFs US-made C-130J Super Hercules that crashed have fake Chinese parts?, Chidanand Rajghatta,TNN | Mar 30, 2014 available at
2. Inquiry into Countefeit Electronic Parts in the Department of Defense Supply Chain: Report of the Committee on Armed Services United
States Senate hereinafter the SAAC report, available at http:// www.armed-services. Counterfeitpercent20
The Holography Times
Vol. 8, Issue 24
Cover Story
Size of counterfeit
electronic components
The making of counterfeit
electronic parts has become
a very big business. In fact,
counterfeit electrical and
electronic products now
occupy second place after
pharmaceuticals. Worldwide
counterfeiting of electrical
products is estimated to range
anywhere between US$11
billion to $20 billion annually.
In North America alone, the
electrical product counterfeiting
is estimated to be in the $300
million to $400 million range
and rapidly growing
. Research
from the Mobile Manufacturers
Forum (MMF) says around
148 million counterfeit or
substandard mobile phones
were sold worldwide in 2013,
mostly in developing countries
Although not much has been
done in India to assess the
impact of counterfeit electrical
components, there is a study
by FICCI CASCADE that focused
on computer hardware and
mobile phones. According to
this study counterfeit computer
hardware constitutes 26.4%,
or ` 47.25 billion by value, of
the total market size estimated
at ` 179.01 billion for 2012.
Similarly, the Grey market for
Mobile Phone constitute 20.8%,
or ` 90.42 billion by value, out
of total market size estimated
at ` 434.09 billion in 2012
. (See
Table 1).
Most commonly
electronics items
From components such as fuses,
cables and circuit breakers
to household equipment,
professional work tools and
automotive and aviation spare
parts, nothing is safe from
counterfeiting. While the
appearance and packaging can
be very convincing, the products
themselves are often sub-
standard and may represent a
severe safety hazard, causing
accidents and costing lives. (See
table 2 and Table 3)
Reason / factor
for increase in
electronic components
The problem is, increasing
because of various factors,
including global as well as local
such as;
Table 1: Counterfeit Computer Hardware and Mobile Phone in India
Particulars Computer Hardware Mobile Phones
Estimated sales to Industry Grey Market (percentage) 26.4 20.8
Sales loss INR 47.25 billion INR 90.42 billion
Estimated tax loss to the Government Direct tax loss 470 million 4.96 billion
Indirect tax loss 11.87 billion 26.78 billion
Tax loss to the exchequer 12.34 billion 31.74 billion
*The loss has been calculated for the year 2012
3. Sharks in the Water, By John Estey, National Electrical Manufacturers Association, T&D World Magazine (May 2007) available at http://
4. Counterfeit/Substandard Mobile Phones, A resource guide for Government, White paper published by Mobile manufactures Forum available
5. Socio-Economic Impact of Counterfeiting, Smuggling and Tax Evasion in Seven Key Indian Industry Sector, published by FICCI Committee
Against Smuggling and Counterfeiting Destroying Economy (CASCADE) available at
The Holography Times
Vol. 8, Issue 24
Cover Story
1. Global number of illegal
manufacturing due to
shortcoming of existing
legislation: According
to Electronic Industries
Association of India ELCINA,
the component industry
has suffered because duty-
free imports of about 217
categories of electronic
components like capacitors,
resistors and transformers
were allowed from 2005
under an information
technology agreement with
the World Trade Organization
(WTO-ITA1). Many of Indias
more than 1,000 small
companies manufacturing
electronic components
have shut operations
. In
an investigation spanning
six months, the Directorate
of Revenue Intelligence
has found that for over
3,673 items brought from
China, the importers usually
declared 1-9 percent of the
actual value of the goods
2. Easy availability of
material due to global
E-Waste handling: China
may be a principal source
of counterfeit parts, but
the United States and other
countries in the developed
world generate the
electronic waste (e-waste)
from which semi-conductors
and other micro-electronic
parts are extracted by
counterfeiters. The parts
recovered from the
salvaged electronics waste
which are non-functional
are processed by the
counterfeiters to give a look
of an original component
3. Inadequate surveillance
efforts by brand owner
to identify counterfeit
4. Tampering/Repackaging:
Counterfeit electronic
component enter the
supply chain through local
manufacturing, importing
from China in the form of
fake packaging or in original
packaging sourced from
mechanics or service stations;
5. Higher margins: In
comparison to genuine
electronic component
makers, a counterfeiter earns
anywhere from 35 percent
to 75 percent on selling
counterfeit electronic parts.
6. Consumer Education: Lack
of consumer education to
identify authentic electronic
Table 3. Top 5 Most Counterfeited
Semiconductors in 2011
(Percentage of Counterfeit
Part Reports)
Rank Commodity % of reported
Type Incidents
1 Analog IC 25.20%
2 Microprocessor 13.40%
3 Memory IC 13.10%
4 Programmable 8.30%
Logic IC
5 Transistor 7.60%
Source: IHS Parts Management 2012
6. Dragon on the Rampage: A flood of cheaper Chinese goods, sometimes better than their Indian counterparts, is forcing small manufacturers
to shut shop and turn into traders, by Taslima Khan, Edition: Mar 2, 2014 published by Business Today available at http://businesstoday.
7. MP3 player for Rs 2, LED torch for Rs 8: Undervalue Chinese imports, make a killing, C Unnikrishnan, TNN.
8. U.S. e-waste drives counterfeit components problem, by Victoria Fraza Kickham, published by Global Purchasing available at http://
Table 2: Percentage of Market Revenue for Most Commonly Counterfeited Product Types by Application Market in 2011
(Percentage Share of Revenue in Millions of U.S. Dollars)
Part Type Industrial Automotive Consumer Wireless Wired Computer Other
Analog IC 14% 17% 21% 29% 6% 14% 0%
Microprocessor IC 4% 1% 4% 2% 3% 85% 0%
Memory IC 3% 2% 13% 26% 2% 53% 1%
Programmable Logic IC 30% 3% 14% 18% 25% 11% 0%
Transistor 22% 12% 25% 8% 10% 22% 0%
Source: IHS iSuppli March 2012
The Holography Times
Vol. 8, Issue 24
Cover Story
parts and about the ill effects
of counterfeit parts.
Impact of counterfeit
electronic component =
huge social and financial
When counterfeit electrical
devices, components and spare
parts enter manufacturing supply
chains, they can add fire, shock
and explosion risks that may cost
workers their lives, cause serious
property damage and involve
unpredictable financial liability.
One fake component can void
guarantees for entire systems and
installations, resulting in severe
financial losses and liabilities.
Manufacturers, installers,
specifiers and employers can be
held responsible for incidents and
accidents linked to counterfeit
components. Counterfeit
electrical products do not comply
with performance and safety
specifications; they are not tested
or approved. Counterfeit aviation
parts, for example pose a serious
risk to the safety of military,
civil and commercial aviation
Steps in combating
electronic counterfeiting
Several studies have been done
to measure the impact of the
problem, but suggested solution
has invariably focused primarily
on enhanced effectiveness of law
enforcement. It is important that
a holistic solution is developed
in this fight. The solution to this
ever-growing menace lies at the
very core of the product, i.e. a
dire need to create an end-to-
end holistic brand protection
As a first step, every CEO or
Brand owner should take head
on the threat of brand attack
and prepare a Brand Risk
Management (BRM) plan as
an intrinsic part of the overall
business plan, review and report.
The team may comprise the CEO/
Brand owner, Brand Managers,
Head of Marketing, Product
Development, Sales, Logistic,
Packaging, Manufacturing or an
outside consultant accountable
for the brand. The idea is to curb
the penetration of counterfeits,
across levels.
The anti-counterfeiting strategy
can be broken into various stages
such as:
i. Anti-counterfeiting
policy and brand
protection program
By establishing and pursuing
an anti - counterfeiting
policy and brand protection
program a company is able to
provide proof that all due care
was taken to limit or reduce
counterfeiting and protect
trademarks and brands.
Together they provide a
shield for liability, and also
a protection against loss of
reputation and adverse public
opinion. The brand protection
program and a n t i -
counterfeiting policy should
list pro-active measures that
are put in place toidentify and
report fake products. They
help limit the negative effects
of counterfeiting and reduce
reaction time should such an
event occur.
Elements to consider include:
supply chain processes,
inspection, audits and
quality control
Identification and evaluation
of risks and threats
Detection and reporting
processes, including handling
of counterfeit products
Overall risk-management
and adequate response
The policy also needs to address
product labelling (including anti-
counterfeiting technologies)
and training of staff on how to
recognize counterfeit products.
Furthermore, it should provide
assistance and training
programs to officials tasked with
enforcing seizures of counterfeit
products. The latter because
only the manufacturer of the
genuine product knows whether
an item is fake or genuine. Part
of this may include the setting
up of a product database, online
reporting mechanisms, and
simple protocols that provide
investigators with tips on how to
spot fakes.
Table 4: Impact of counterfeit component components
Consumers Legitimate Manufacturers Government / Social
Loss of Life Loss of revenue Loss of revenue
Loss of Job Increases warranty costs and so the maintenance cost Funding of criminal enterprises
Financial Liability due to law suites
Loss of brand integrity and goodwill
Expected life of the product decreases
9. Brand Protection: Challenges and Solutions, Pradip Shroff, Published at The Holography Times, Volume 4, issue 13 available at http://www.
10. ISO Standards 12931 Performance criteria for authentication solutions used to combat counterfeiting of material goods, http://www.iso.
The Holography Times
Vol. 8, Issue 24
ii. Register trademarks and
Register trademarks in
all countries you sell,
manufacture, and license
or distribute products in.
This is essential to protect
trademarks and brands.
Also, apply for
patents and register designs.
For details and registration
procedures, consult a
trademark attorney.
iii. Adopt ISO standards and
Join trade associations
ISO has developed
new Standards 1293
Performance criteria
for authentication tools
used in anti-counterfeiting
or material goods: The
new ISO 12931 is already
published and would be
a very useful document
for any-one who wants to
follow globally accepted
standards and approach to
fighting against the
counterfeit. The ISO document
can be seen on http://www.
i s o. org/i s o/cat al ogue_
It is strongly recommended
that all brands who want to
have a safety net of a global
standard, should plan to
comply with this standard.
Similarly, SAE International,
a global association of more
than 138,000 engineers and
related technical experts in
the aerospace, automotive,
and commercial-vehicle
industries has come up
with the first revision
to its c o u n t e r f e i t
parts avoidance technical
standard AS5553
Electronic Parts;Avoidance,
Detection, Mitigation, and
This new
revision in particular provides
terminology references and
reporting mechanisms to
facilitate the flow-down of
the standard globally. Further,
try to join anti-counterfeiting
association or your local
chamber of commerce, such
as FICCI CASCADE, as these
national and international
trade bodies can guide and
provide best practices against
combating counterfeiting.
For example, The National
Electrical Manufacturers
Association is so concerned
about this influx of counterfeit
products that its board of
governors has made it one
of its top-three priorities
to focus the attention of
government, the suppl y
channel and the public on the
harm caused by counterfeit
electrical products
. In India,
is doing
similar work.
iv. When fake products are
After contacting the relevant
law enforcement authorities,
consider reaching out to a
member of the IEC Conformity
Assessment System
India it is BIS). They can direct
you to one of the national
certification agencies and
laboratories who might be
able to help you set up a testing
and inspection program to
avoid future problems, as
well as product training for
manufacturing staff and law
enforcement agencies.
v. Anti-counterfeiting
There are a number of anti-
counterfeiting technologies
that can help better
protect and authenticate
products. And while they
cant completely eliminate
counterfeiting, they can
make it less attractive
and less profitable,
increasing the level of risk
for the counterfeiters. Use a
secure, anti-counterfeiting
device comprising overt,
covert & forensic security
features like security
hologram seals and labels,
tamper evident security
films and light-sensitive
ink designs. While there
a number of technologies
available in the market, it is
advisable to choose smart
and at the right time while
keeping track of some basic
guidelines like:
Instead of focusing on
features, find a vendor who
can provide you overt as well
as covert technologies as it is
important to select a solution
using multiple technologies.
Seek help from an
established trade association
to select ethical vendor, best
practices and resources to
fight counterfeiting.
Select the technology in terms
of the difficulty in replicating
and tamper evidence
offered, uniqueness,
availability of suppliers, ease
of identification and user
Solutions should also have
feasibility of being integrated
with the automated
production/ packaging
line if required, especially
wherever the volumes are
very large
Try to combine low and
high security elements
to enhance protections,
for example, by integrating
sequential or unique
numbers in the solution.
vi. Market surveillance,
quality control, inspection
Establish classical market
surveillance, including at
customs barriers and ports
Obtain and test samples from
open markets, websites and
auction sites. Make it known
that you run such tests
Keep a database of companies
and manufacturers that
Cover Story
The Holography Times
Vol. 8, Issue 24
have been suspected to
counterfeit your products
Send Cease and
desist letters for every
infringement to establish
brand and trademark
protection measures
Tighten supply chain,
production and delivery
path of genuine products
Establish factory, pre-
shipping and port of entry
inspections (as counterfeit
products sometimes hide in
genuine shipments) consider
involving an IEC Conformity
Assessment System member
for inspection and testing
pre-shipping and at market
entry point.
vii. Interception and
cooperation with law
Registered for customs watch
programs. Organizations
including Interpol, World
Trade Organisation, World
Customs Organization,
World Intellectual
Property Organization and
International Chamber of
Commerce are working
closely together to improve
international cooperation
and border enforcement
through increased customs
co-ordination and exchange
of information and best
practices. The IEC and its
Conformity Assessment
System members concretely
support these efforts on the
ground through inspection
and testing.
While the trade of counterfeit
electronic parts has dramatically
increased, tackling counterfeits
is not impossible. Counterfeiting
is a problem that needs to be
addressed quickly and decisively.
Ideally, as a first move, more
effective partnerships should be
built between law enforcement
agencies and the private sector
with focus on intelligence
sharing, awareness and product
identification training.
Manufacturers should create
a team that focuses on anti-
counterfeiting strategy
Selection of right anti-
counterfeiting strategy
should be employedUse
first level of authentication
features to empower your
customers to identify your
genuine products
Track supply chain at
distributor end
Information to customer
In our view a company that
implements the suggestions
outlined in this article will
definitely see a marked
improvement in their fight
against counterfeiting. In case
you need more information,
please e-mail to us at info@ and we will be happy
to work with you to eliminate the
menace of counterfeiting.
1. Counterfeit Electronic Parts: What
to do Before The Regulations
(and Regulators) Come?,
Federal Contracts Report, 97
FCR???,6/21/2012, The Bureau
of National Affairs, Inc. (800-372-
2. Counterfeit Chips on the Rise,
IEEE Spectrum (June 2012),
available at http://spectrum.
3. KPMG Study: Managing the Risks
of Counterfeits in the IT Industry
(on file with the authors) available
at : ht t p: //www. agmagl obal .
(No anticounterfeiting effort is
entirely foolproof, but the better ones
can make a significant differences.
4., Trade
Regulations, Customs and
Standards, at http://
chi nawt o. com/wt o/i ndex- e.
5. Counterfeit threats for electronic
parts, by Nicole Faubert
(December 30, 2013) available at
6. The Counterfeit Repair Parts
Tsunami, by Robert M.
Williamson available at http://
7. Counterfeit components: Methods
to protect against fake parts,
avilable at http://www.eeherald.
8. HOMAI Hologram Manufacturers
Association of India, www.homai.
9. How to Select a Security Feature
- a Structured Guide for the
Selection of a Security Technology
for Documents and Items of Value,
Published in June 2009 by the
Document Security Alliance (DSA)
and North American Security
Products Organization (NASPO)
10. The Serious Risks From Counterfeit
Electronic Parts, Forbes
11. SAE Internationals counterfeit electronic parts risk mitigation standards, at
12. NEMA, Public Policy, Anti-Counterfeiting,
13. FICCI Committee Against Smuggling and Counterfeiting Destroying Economy (CASCADE),
14. Piracy in Electrical and electronic products: Anti-counterfeiting best practice and strategies, International Electrotechnical Commission
available at
15. Steps to Identify Authentication Solutions to Curb Counterfeiting, C S Jeena, published at The Holography Times, Volume 7, Issue 20 available
Cover Story
The Holography Times
Vol. 8, Issue 24
Guest Column
Coded holograms:
keeping the supply chain secure
Companies have to contend with
challenges stemming from supply
chain security lapses (which can
result in theft, diversions and
product recalls), counterfeiting
and regulations. In addition these
factors can impair the health
and reputation of companies by
adversely impacting on profits,
brand credibility and research
initiatives. With industry,
regulatory authorities, security
agencies and governments
around the world realising the
significance of implementing
product tracking and tracing
systems which build on product
serialisation, it becomes
mandatory for those in the
supply chain to comply with
legislation pertaining to the
locations in which they operate.
Even where this is not mandated
by law, tracking and tracing
systems improve defences
against counterfeiting and
other infringements as well
as improving distribution and
inventory control.
Typically, distribution systems
run the gamut of manufacturers,
wholesalers, distributors, stockists
and retail outlets before products
reach the end user or customer.
Ensuring product protection,
including authentication
capabilities, across various touch
points throughout the supply
chain through track and trace
implementation, is important to
address the challenges industry
faces. Apart from providing
visibility and full traceability
from manufacturer to consumer,
successful serialisation programs
can prove to be a key differentiator
and a clear competitive advantage
for companies.
Today, Quick Response (QR) codes,
which use four standardised
encoding modes (numeric,
alphanumeric, byte/binary and
kanji) to efficiently store data, are
being linked with holograms to
provide integrated track & trace
and authentication solutions
which, among other benefits, can
help governments improve excise
duty collection and minimize
product counterfeit, contraband
and illegal parallel trading by
enabling tracking of each saleable
item from its point of origin to the
point of sale. Incorporating these
codes in to a hologram delivers
authentication of the product and
the code in one feature, making
this an efficient and effective
method of product protection.
Systems like Andrews &
Wykehams THESEUS can also
be applied as an anti-counterfeit
solution not related to taxation
for such market segments as
pharmaceutical. Not only do
systems like this one assist in
maximising tax collection and
reducing counterfeits, they are
also tools the government can
use to leverage public confidence.
THESEUS for example includes
an open Internet interface, which
enables any member of the public
Everyone involved in the goods
supply chain - manufacturers,
distributors, consumers, taxation and
government authorities- has learnt
the value of security holograms and
will be reassured by their presence
on products and/or the packaging,
recognising the benets they
provide. However, as coding and
serialisation becomes mandated in
various countries for products such
as medicines and tobacco products,
the ability to incorporate QR, data
matrix and other types of code in to
holograms further enhances the role
they can play in supply chain control.
Ian Lancaster, general secretary
of the International Hologram
Manufacturers Association, highlights
the latest developments.
Ian Lancaster
The Holography Times
Vol. 8, Issue 24
to verify products are genuine
and duty-paid, and uses high-
security labels with holographic
and security print features,
carrying two-dimensional QR-
format barcodes with item-
specific information. These codes
are protected from unauthorised
access and reproduction by
state-of-the-art electronic digital
signature (EDS) technology.
Another technology finding its
way to increased integration
with holography is coding
foil, which is used to stamp
various markings onto product
packaging by means of a coding
device. These markings provide
the consumer with important
information such as a products
expiration date, production date,
the weight, or the price, and
are especially beneficial when
it comes to the need to mark a
products quality or add high
performance labelling. And in
todays health and eco-conscious
world, manufacturers ensure
that these foils comply with all
necessary regulations, including
the strict limits in EN 71/Part
3, the EU packaging guidelines
94/62/EC, and the American
CONEG specification for heavy
metals and lead chromate. The
Kurz Group, for example, is a
market leader whose eco-friendly
coding foils are enabling product
manufacturers and others in the
supply chain to choose from a
diverse product line that includes
a wide range of grades and
colours to meet the demanding
requirements of modern product
packaging, labelling and retailing.
Coding foils are just one product
that can be integrated with
holograms to boost the role played
in supply chain control. Kurzs
TRUSTSEAL range of difficult to
copy holographic authenticity
features visually enhance the
brand, build consumer confidence,
and provide a high level of
counterfeit protection. These
optical security features can be
combined with the web-based

system. The TRUSTCODE

connects the real world to the
virtual one: detailed product
information can be accessed by
buyers, retailers, customs officials
and brand owners using different
smart phone scanning processes.
The company has also developed
diffractive 2 D barcodes with an
appealing aesthetic that enhances
the value of the product. Rather
than being printed, the barcode is
applied as a silver colored stamping
foil into which the actual code has
been incorporated as a diffractive,
holographic-like structure.
Elsewhere, companies like MTM
Technologies Inc are pioneering
other coded holography solutions
such as the HoloTag to protect
against brand piracy and product
theft in the supply chain within
the framework of its integrated
security concept. Integrated with
other technologies the MTM
hologram linked with a taggant
combines visible proof of any
tampering with an individual
security code for authentication.
The HoloTag 2D barcode system
has applications in many areas:
from government revenue
collection to publishers and
manufacturers of products.
Checks can be carried out within
the supply chain with a HoloTag
track and trace mobile application
that can be downloaded onto
most smart phones, or accessed
from a browser, allowing the
user to gather a lot of information
in the field and track this in real
time. The technology plays an
important part in combating
counterfeiting and piracy of
taxable items, helping brand
owners control their inventories
and prevent them from producing
excess items which can be targets
for smuggling.
Unquestionably, one of the keys
to the success of holograms since
being adopted for authentication
purposes in the early 1980s has
been the ability to adapt and
constantly find new roles. We
will undoubtedly see more and
more interesting developments
for the technology that will offer
far reaching benefits that develop
and expand further the role of
track and trace. So, with the
seemingly remorseless march
of technology and the resolve of
governments, anti-counterfeiting
agencies and companies around
the world to stand firm in the face
of international organised crime,
as well as the casual opportunist,
theres no reason why the
hologram will not continue
to evolve, becoming further
enmeshed in global supply chains
and continuing to add real value.
The International Hologram
Manufacturers Association
(IHMA) - - is made
up of nearly 90 of the worlds
leading hologram companies.
IHMA members are the leading
producers and converters
of holograms for banknote
security, anti-counterfeiting,
brand protection, packaging,
graphics and other commercial
applications around the world.
IHMA member companies
actively cooperate to maintain
the highest professional, security
and quality standards.
Issued on behalf of the IHMA by
Mitchell Halton Watson Ltd.
For further details contact
Andy Bruce on +44 (0) 191 233 1300
or email
Guest Column
The Holography Times
Vol. 8, Issue 24
Industry Updates
Food & Beverage
Fake Oranges seizures becomes Hong Kongs
first counterfeit fruit scandal
Illicit liquor seized worth ` 1.6 million, Mumbai,
Maharashtra, India
Police seize illicit liquor worth ` 2.14 cr
Delhi Police seized 5000 bottles of illicit liquor
Fake VODKA worth 1 million found
Fake pesticides a threat to Kashmir apples
Cosmetics and Personal Care

Dubai smells a fake: Dh2 million counterfeit
perfumes seized, UAE
Dh 4.1 million fake cosmetics seized in Dubai
A $ 2million health counterfeiting ring
Haryana drug wholesalers booked for
smuggling cough syrup
Security and Fiduciary Documents
Men caught with $4.1 trillion worth of fake
bonds at Vatican Bank, Italy
ISI fake notes may flood Indian polls, India
Automotive Components
Mumbai Police seized fake high security
number plates
Counterfeiting news update
The Holography Times
Vol. 8, Issue 24
Industry Updates
Publication Title Int. Application Applicant / Inventor
DD.MM.YYYY Class Number
06.03.2014 Wo/2014/032238 -Optically D21h 21/42 PCT/CN2012/080718 Sicpa Holding Sa /
Variable Security Threads and Ritter, Gebhard

Brief Abstract: A more sophisticated optically variable security thread or stripe was provided. It could be used
in the field of anti-counterfeiting, and comprised: a substrate and i ) a first optically variable layer (1) imparting
a first different color impression at different viewing angles, ii )a second optically variable layer (2) imparting
a second different color impression at different viewing angles, iii)a first color constant layer (4) having a color
matching the color impression of the first or second optically variable layer at a first viewing angle, iv) a second
color constant layer (5) having a color matching the color impression of the first or second optically variable layer
at a second viewing angle, and v ) one or more material-free regions (0), wherein the first optically variable layer
(l), the second optically variable layer (2), the first color constant layer (4), the second color constant layer (5) and
the one or more material-free regions (0) are jointly visible from one side of the security thread or stripe. A process
for making said security thread or stripe was also disclosed.
19.02.2014 2698404 -Microparticles, C09C 1/00 12771357 Dainippon Printing
Anti-Counterfeiting Ink, Co Ltd / Yamauchi
Particle Sets, Tsuyoshi
Anti-Counterfeiting Toner,
Anti-Counterfeiting Sheet and
Anti-Counterfeiting Medium
Brief Abstract: A main object of the present invention is to provide fine particles, a particle group, an anti-
counterfeiting ink, an anti-counterfeiting toner, an anti-counterfeiting sheet, and an anti-counterfeiting medium
enabling to achieve a high level of authentication. The object of the present invention is achieved by providing the
fine particle comprising an identification information group including multiple types of identification information
identifiable by magnification, characterized in that the identification information group includes first identification
information and second identification information which cannot be identified at any magnifying power capable of
identifying the first identification information.
13.02.2014 WO/2014/023523 - G06K 19/06 PCT/EP2013/064927 3S Simons Security
Microparticle, In Particular Systems Gmbh/
Microparticle For The Simons, Rolf
Anti-Counterfeiting Marking
Of Products
Brief Abstract: The invention relates to a microparticle (10), in particular a microparticle (10) for the anti-
counterfeiting marking of products. The microparticle (10) has at least one first layer (20) and at least one second
layer (30). The first layer (20) forms an outer face (22) of the microparticle (10), and at least the outer face (22) is
equipped with at least one mark (15), which is pre-applied onto the outer face (22). None of the dimensions of the
microparticle (10) exceed approximately 100 m. The invention further relates to a method for producing at least
one microparticle (10), to a label, to a spread, and to a corresponding use.
Global patents
The Holography Times
Vol. 8, Issue 24
Upcoming events
Date Event Name / Place / Website
21-23 May, 2014 Pharma Pro Pack Expo 2014
Mumbai, India,
16-18 June, 2014 Security Document World
London, United Kingdom,
23-25 June, 2014 High Security printing 2014, Latin America
Hotel Sheraton, Santiago, Chile,
23-25 June, 2014 Anti-counterfeiting for Pharmaceuticals and Medical Devices
Philadelphia, Pennsylvania,
8-11 Sep, 2014 The 3rd International banknote Designer Conference
Montreal, Canada,
15-17 Sep, 2014 Tax Stamp Forum
Dubai, UAE,
29 Oct 1 Nov, Label Expo India
2014* PragatiMaidan, New Delhi,
3-6 Nov, 2014 Automotive Aftermarket Products Expo
Sands Expo, Las Vegas, USA,
19-20 Nov, 2014 Brand Protection and Anti-Counterfeiting
Munich, Germany,
3-5 Dec, 2014* The Holography Conference
Istanbul, Turkey,
19-21 Jan, 2015 High Security Printing 2015, Asia, Middle East & Africa
Hotel Makati-Shangrila, Manila, The Philippines,
3-4 March, 2015 IP Protect Expo 2015
Business Design Centre, London,
23-25 March, 2015 High Security Printing 2015, Europe
Hotel Corinthia, Budapest, Hungary,
22-24 April, 2015 Security Printers 2015
Copenhagen, Denmark,
10-13 May, 2015 The currency conference
Vancouver, Canada,
Hologram Manufacturer Association of India
Issue Editor : C S Jeena
Advisor : Mr. Pradip H Shroff
Mr. Manoj Kochar

Designed & : EYEDEA Advertising
Printed by 1250/13, Govindpuri,
Kalkaji, New Delhi-19
The Holography Times is a quarterly
newsletter published by HOMAI with an aim
to provide latest developments, research,
articles, patents and industry news to a
wide audience related to Holography in
Indian and World.
The editorial team welcomes your news,
contributions and comments. Please send
your product updates, press releases,
conference announcements or other
contributions to HoMAI:
21-Ground Floor, Devika Tower 6
Nehru Place, New Delhi 110019, India
Telfax: +91 (11) 41617369
The data used here are from various
published and electronically available
primary and secondary sources. Despite
due diligence the source data may contain
occasional errors. In such instances, HoMAI
would not be responsible for such errors.
About HoMAI
The Hologram Manufacturers
Association of India (HoMAI)
is the worlds 2nd and Asia
only association representing
hologram industry.
Counterfeit cartoon
* HoMAI participatin events. Meet us at these events to know more about us.
Industry Updates
The Holography Times
Vol. 8, Issue 24