The technology, developed at the Department of Energy's (DOE) Oak Ridge National Laboratory (ORNL), is based on a non-chemical tagging agent that is difficult to duplicate but easy to scan -- and authenticate -- using a simple optical scanner. It labels products with a unique marking using special tiny fibers of fluorescent nylon.
Tracer Detection Technology President Jay Fraser is confident the new system will have a major impact on piracy, which costs the U.S. recording industry alone $300 million per year, according to industry sources. The losses to U.S. companies are estimated at $200 billion a year, but that figure doesn't tell the whole story.
"Piracy doesn't hurt just the businesses," Fraser said. "It hurts the consumer, who ends up buying a product of inferior quality. And it costs many of our nation's jobs."
Tracer, based on Long Island, N.Y., recently signed an agreement giving it sole commercial rights to ORNL's Fluorescent Dichroic Fiber tagging technique for counterfeit-resistant materials and for authenticating materials. The technology was developed by the laboratory's Mike Ramsey and Leon Klatt, whose initial work in the area was done for the U.S. Bureau of Engraving and Printing.
By using dichroic fibers made of polymers such as nylon-66, a manufacturer can tag individual products or cartons containing the products. The dichroic feature means the fibers have different absorption properties for light of the same color but polarized in different directions. The ORNL-developed fibers, which can be colored or colorless, exhibit fluorescence only if illuminated by light of the proper polarization.
Fraser expects the music industry to be an ideal candidate for the new technology, which differs from existing techniques to tag merchandise mainly in that it is exceedingly difficult to duplicate. The naturally random process of incorporating the dichroic fibers into the product also allows for a virtually infinite number of markings, or tags.
The Recording Industry Association of America, a private, not-for-profit organization and advocate for the recording industry, estimates that piracy costs the industry as much as $2 billion annually worldwide. Retailers estimate their losses at up to 30 percent of their business.
In other sectors, estimated losses range from $16 billion per year by the computer software industry to $12 billion per year by U.S. automakers and parts suppliers who lose revenue because of the sale of counterfeit parts.
Nationwide, a U.S. Customs Service study estimated the job losses caused by counterfeit goods was 750,000.
"When you take into account the vast losses vs. the relatively low cost of this technology, we're confident businesses will quickly see the benefits," said Fraser, whose company would provide each manufacturer with a customized label virtually impossible to duplicate.
ORNL, one of DOE's multiprogram research facilities, is managed by Lockheed Martin Energy Research Corporation.
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