A Durango-based technology consulting company that helps firms boost their efficiency in everything from inventory tracking and product development to human resources is looking to provide a new service to firms like Nike that have trouble combating counterfeit knock-offs.
M10TEK, which moved to Durango from Atlanta in December 2016, holds three patents and is working on a fourth patent, used as the backbone in a product it calls Verephied that provides users with a 98% assurance that their products are authentic and have not been compromised by counterfeiting.
“Counterfeiting costs companies $900 billion a year worldwide,” said Jim Rosenberger, M10TEK managing partner.
According to the Organization for Economic Co-operation and Development’s report, “Trends in Trade in Counterfeit and Pirated Goods,” based on 2016 data, trade in counterfeit and pirated goods stood at 3.3% of all global trade.
The U.S. Army is using Verephied to provide assurance that products it receives are not cheaper, inferior and possibly unsafe imitations. It is an especially important security requirement for the Army in its dealing with electronic components that must meet rigorous standards for robust performance in adverse weather conditions.
Consumer electronics are a category of products that frequently contend with imitations, and Rosenberger sees this area, along with pharmaceuticals and food products, as industries in need of the authenticating services offered through Verephied.
The application for authenticating technology, he said, is huge. Auto repair shops and automakers have been sued for installing counterfeit airbags that do not function safely, he said.
OECD reported that fakes of items such as medical supplies, car parts, toys, food and cosmetics brands and electrical goods carry a range of health and safety risks. Examples include ineffective prescription drugs, unsafe dental filling materials, fire hazards from poorly wired electronic goods and sub-standard chemicals in lipsticks and baby formula.
A major pharmaceutical company headquartered in New Jersey, which Rosnberger said he could not name, is conducting a pilot program with M10TEK’s Verephied authenticating product and services.
Rosenberger said pharmaceuticals are particularly concerned about authenticating their drugs because the Drug Quality Security Act of 2013 gradually ramps up requirements that drug companies must meet to ensure their products are authentic and have not been tampered with.
Title II of the Drug Quality Security Act, the Drug Supply Chain Security Act, outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs distributed in the United States.
The requirement, Rosenberger said, creates an immediate market for authenticating software and services offered through M10TEK’s Verephied.
In addition, he said similar legislation is being contemplated to offer assurances that the food supply chain for an array of products sold at grocery stores are similarly protected.
“Verephied can be used to track assets throughout the supply chain, and we think it can especially help with food recalls,” Rosenberger said.
The authenticating data offered by Verephied, he said, can track a product from production to warehouse to distribution down to the individual retail outlet.
Authenticating a product through Verephied relies on what Rosenberger calls “a plurality of data.”
Tracking through Verephied relies not only on the company-provided protections, which can include bar codes, holograms, and embedded radio frequency ID tags, but it also uses what Rosenberger calls “tagnostics.”
By tagnostics, he said, Verephied’s authenticating process analyzes such things as paint colors used on packaging, weight of a product, GPS locations and supply chain schedules to ensure products are authentic and have not been tampered with.
“We rely on the plurality of data to determine a product is authentic and hasn’t been tampered with,” Rosenberger said. “There is no one silver bullet.”