Authentication and anti-counterfeiting technologies deployed for FIFA World Cup

(05/03/2010)

The FIFA World Cup Finals in South Africa are less than 100 days away. While the battle on the pitch begins on June 11, the off-the-pitch brand and product protection battle is already underway. It pits FIFA, sponsors, merchandising partners and teams of IP lawyers on one hand against those who will seek to cash in illegally on the 19th FIFA World Cup.

Randall Burgess from the International Authentication Association (IAA) explores the problems faced by major sporting events, from counterfeit and sub-standard merchandise through to illegal ticket sales. He looks at the growing role authentication and anti-counterfeiting technologies are playing in fighting back and advises how other brand managers can learn valuable lessons.

Sporting events are big business and the spin-off sales from merchandise are worth millions. The FIFA World Cup – the world’s biggest sporting event – typically attracts a global viewing audience of more than 30 billion and is expected to rake in more than £300 million for the organising committee alone.

The first corporate sponsorship programme for the World Cup (Spain, 1982) generated $19 million from nine sponsors. This is nothing compared to the sums paid by 15 partners and six official suppliers of the last finals in Germany. International brands like Adidas, Emirates and Budweiser paid up to $50 million each to supply products and associate their brands with the event.

With such riches on offer, it’s little surprise that the World Cup, Olympics and other popular sports (FA Premier League, NFL, NHL to name but a few) are prime targets for brand pirates. Among the multitude of complex problems encountered across these sports are counterfeit, sub-standard and unauthorised merchandise; illegal and black market tickets; improper use of logos and trademarks and ambush marketing. Each of these will be exercising lawyers and customs officials before the finals begin.

Licensed merchandise are among the biggest targets. More than 3million counterfeit products were seized worldwide before and during the 2002 World Cup tournament.

The situation encountered by the organisers of the 2010 Vancouver Winter Olympics highlights the growing challenge for both organisers and licensees who pay millions for their contracts. Brand police recently uncovered counterfeit shirts emblazoned with the Games’ inukshuk logo being sold across the country by a major retail chain. The shirts, which were counterfeit versions of a product made by an official partner, were supplied to the retail chain by a regular supplier.

Counterfeit and unlicensed products are a global phenomenon, affecting small villages and back streets right up to big retail stores in major cities. The dual impact of globalisation and growth of the internet has made the problem considerably more acute.

The rise of the internet has been a particular problem affecting the distribution of tickets for major sporting events. The growth in sites selling tickets has made policing more difficult and posed new and serious security problems on the ground.

There is also a burgeoning grey market economy where legitimate goods are produced in unauthorised quantities or diverted to a market in which a retailer has no right to sell them. This was certainly true ahead of the Beijing Olympics when sub-contractors working for the company making official mascots supplied goods in unauthorised quantities.

Taken together (counterfeits, unauthorised and diverted goods, piracy, IP infringements and ambush marketing) threaten revenue streams, erode margins, damage corporate reputations, add extra stress to distributor and retailer relationships and generally open up the opportunity for service and warranty fraud on a grand scale.

FIFA and its partners are fighting back. Millions have been spent enforcing trademarks; tackling IP infringements; anti-counterfeiting drives and working in close alliances with governments and customs and excise departments around the world.

FIFA itself was forced to wise up to the IP law after the 1998 World Cup in France when ambush marketing by a non-sponsor obscured coverage given to Adidas. There has been a far more aggressive pursuit of those falling foul of the law since then. FIFA logged 2,000 violations of IP during the 2006 World Cup – including going head-to-head with Korean electronics giant LG, which sponsored a World Cup supplement in a magazine without permission.

It’s a lesson that others have been quick to follow. In 2002, Arsenal took a sole trader to court for selling unofficial goods and passing off the club’s trademark outside its Highbury ground.

But it’s in the area of authentication, anti-counterfeiting and security features where FIFA and its partners have flexed their muscles most. They now have in their armoury a growing array of security devices to authenticate and ID products, improve inventory control and track and trace goods through the supply chain

A multitude of technologies have been incorporated on products and packaging from holograms and security labels to tags, inks, serial numbers and RFID (radio-frequency identification) features. These can be used for on-the-spot identification of replica shirts and linked to online databases capable of tracking and tracing their whereabouts anytime.

At the 2006 World Cup, branded labels and swing tags with a holographic label were produced for every single piece of FIFA branded licensed merchandise. Personalised tags were produced for individual licensees making for easy, intuitive first level recognition. The complexity of this operation is underlined by the fact the 2006 tournament involved 170 licences and the delivery of labels to 400 different locations worldwide.

Formula One teams protect their identities and official merchandise in this way, while all of America’s major leagues are using labels and tags to varying degrees to protect reputation, brand image and revenue streams.

Since sports merchandising spiralled in the 1980s so have these technologies. They are critical in helping licensors protect their brands – stopping counterfeiting and grey market diversion – and also protecting their revenues by helping them to collect royalties from licensees. For the licensee, there is the benefit of product security and the guarantee that the premium price paid for official merchandise is not undercut.

Devices increasingly incorporate more than one security feature. As well as the obvious depth, colour and switching effects of labels and tags, there are secondary features which are less likely to be noticed visually by the consumer to add extra security. Some require a magnifying glass for inspection and are used by in-the-field enforcement teams. Third level features, verifiable only with the aid of sophisticated equipment, are also present.

Ticketing is another concern. Tickets at the 2006 World Cup (3.5 million) and the Beijing Olympics (15 million) included RFID chips (Radio-frequency identification) that allowed the name of the purchaser to be written onto the ticket and then read by scanners at the stadium. While no personal information was contained on the ticket, a ticket’s serial number was linked to a database detailing information about the ticket holder.

This could help to tackle the global secondary ticket market, estimated to be worth between $2 and $25 billion annually. Long-term, contactless smart cards could replace paper tickets.

In addition to all the authentication and anti-counterfeiting technologies available, educating consumers about the problems of fakes remains paramount.

Related topics:  Crime and Fraud Prevention   Detection systems   Knowledgebase   Smart card   Tagging vandalism and theft prevention 

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