Their goal Knocking out the nation’s knockoffs

Jessica Perry//May 23, 2016

Their goal Knocking out the nation’s knockoffs

Jessica Perry//May 23, 2016

It might be easy to think of counterfeit goods as largely benign — a cheaper item that, at least superficially, looks like a Rolex, for instance. But they can also be dangerous, such as counterfeit toys or medicines that hit the streets without any regulation.

It’s also expensive, costing the makers of genuine products more than $1.5 trillion last year.

But Lepton-id says it has the technology to address this situation.

The Hillsborough-based company, whose founders have spent years making anti-counterfeiting products for the government, is now taking the step of commercializing. That means pushing out its technology, such as hidden security barcodes and other physical markers, to help attack the market for knockoff goods, the sale of which totaled more than $1.5 trillion last year.

Lepton-id is spinning off from the former venture of Jim Magos and Victor Zazzu, known as ZBA, which was started in 1994 as a barcode and data collection company.

“Almost from its inception, the ZBA has become involved in developing unique ‘barcode’ applications as they pertain to security issues,” said Magos, chief operations officer. “For example, the first item developed by ZBA has been the ability to scan barcodes hidden within hologram labels. These hidden barcode can only be scanned under very specific lighting conditions.”

In addition to just scanning these hidden codes, the company typically layers several different security features into a single item. To do this, the company uses “taggants,” or physical markers that provide an invisible fluorescent response that is more specific than an ultraviolet one.

Biz in brief
Company: Lepton-id
Headquarters: Hillsborough
Founded: 2016
Employees: 22
One last thing: Aside from the key targets of counterfeiters, Lepton-id’s commercialized technology is aimed at the access control, military, homeland security, chemical, industrial and automotive industries among others.

“Everybody can buy UV taggants on Amazon for a very low cost. You just get a UV light and you can scan and duplicate that,” Magos said. “With ours, we make a very precise wavelength of light and tune our readers directly to that specific wavelength in real time.”

The company can then combine a number of different taggants, in a mixture of hologram, paint or ink, on a single product as a part of a multipoint verification system unique to each customer. The company can make its taggants to a specific size, shape, color and make it unique for that customer, and it can even mix two taggants together.

Aside from the physical features, the system can include cloud-based tracking of products.

“The companies will quickly know if one of their distributors is playing games and shipping their products outside of their arena or territory,” Magos.

The market for counterfeit
According to the Federal Customs Authority, the revenue for counterfeit goods reached $1.7 trillion in 2015.

The products most affected by this figure were:
Handbags and wallets; watches and jewelry; consumer and electronic products; wearing apparel and accessories; pharmaceuticals and personal care; footwear; computers and accessories; labels, tags and logos; optical media; and toys.

Magos and Zazzu started in this space two decades ago by doing custom work for the military and offices of emergency management. Magos said those entities “wanted something unique and different that offered some way of protecting their product (and) what we’ve done is migrated that technology to the next evolution.”

Even making a dent in the roughly $1.7 trillion counterfeit market, a number provided by the Federal Customs Authority, will be validation for the company.

“Any percent of that is a big number,” Zazzu said.

Mago, meantime, noted that U.S. Customs and Border Protection services published an article in 2015, saying it’s only able to capture $1.2 billion of counterfeit goods coming into the country. That means 99 percent of such goods are getting through.

“That’s really scary,” he said.

Aside from the potential market, Maggos and Zazzu say the value the technology offers only adds to their business model. Particularly when their taggants are added to layers of holograms and inks in identification cards.

“A lot of the features that we use are already on the card anyway,” Zazzu said. “We just have a specially designed hologram and we process it a little different but, in the scheme of things, they’re going to do that anyway to make the card look secure.”

E-mail to: [email protected]
On Twitter: @sheldonandrewj